Water electrolysis technology company Verdagy is planning to open a new facility in Newark, California, which will be the first in the U.S. to manufacture advanced water electrolyzers in large volumes.
The facility will have more than 100,000 square feet of advanced manufacturing space, and the company plans to double its employees by next summer to manage the expansion and operation of the new plant. The facility is expected to come into operation in the first quarter of 2024.
Verdagy caters to customers in heavy industries, like chemicals, ammonia and fertilizer, and steel; sectors that green hydrogen can play a key role in decarbonizing. The company says it is focusing on advanced manufacturing, cost reductions and product innovation that puts it on the pathway to the U.S. Department of Energy’s goal of hitting $2/kg levelized cost of hydrogen by 2026.
The U.S. needs to accelerate domestic production of electrolyzers as most of the production is outsourced from overseas manufacturers, Verdagy CEO Marty Neese told pv magazine USA.
“If we enable domestic manufacturing of electrolyzers, it will also accelerate innovation that will have cascading effects on the overall cost and production capacity, enabling domestic manufacturing to become global leaders in the hydrogen industry,” Neese added.
The new Silicon Valley manufacturing facility will accelerate the production and cost reduction of its 20 MW electrolyzer module, which is the basic building block for delivering larger, gigawatt-scale plants, according to Neese.
Verdagy’s plans to expand its manufacturing capacity in California is set against the broader backdrop of the state’s hydrogen ambitions. California is focused on building an entire renewable hydrogen ecosystem to achieve its climate goasl, and that includes manufacturing electrolyzers, Dee Dee Myers, senior advisor to California Gov. Gavin Newsom, and director of the Governor’s Office of Business and Economic Development, said.
“Verdagy’s decision to expand their footprint here reflects California’s unique strength in creating new markets, enabling the creation of clean energy jobs while solving our most existential challenges with the technology of the future,” Myers said.
One of the key challenges to ramping up domestic electrolyzer manufacturing capacity is access to capital to build out the needed infrastructure, Neese said. Policy-makers are already looking at ways to address these challenges. The DOE, as part of the Bipartisan Infrastructure Law, is encouraging companies like Verdagy to expand the U.S. supply chain for green hydrogen electrolyzer manufacturing, Neese added.
In August, Governor Newsom instructed his Office of Business and Economic Development to develop a hydrogen market development strategy for California, which is expected to mirror the state’s zero-emission vehicle market development strategy. Clean hydrogen is likely to be a key component of achieving California’s climate goals, and the state is competing to be a federally-funded hydrogen hub under an $8 billion program that stems from the Bipartisan Infrastructure Law.
The new strategy will focus on using hydrogen to deploy clean energy and decarbonize the transportation and industrial sectors, and will be developed with input from agencies like the California Air Resources Board, the California Energy Commission, and the California Public Utilities Commission.
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