A Cummins electrolyzer is pictured. The electrolyzer can refuel hydrogen-powered vehicles and is a key component of Cummins’ New Power segment breaking even by 2027. Photo courtesy Cummins.com

Two big projects coming out of Cummins Inc.’s launch of Accelera involve electrolyzers.

Capacity expansion for electrolyzers was a major focal point in 2022 as Cummins announced it will begin producing electrolyzers in Fridley, Minn., as well as Spain, announced electrolyzer manufacturing capacity expansion in Oevel, Belgium, and began construction on the electrolyzer facility in Guadalajara, Castilla-La Mancha, Spain. Wednesday’s launch of Accelera brought news of a contract with Varennes Carbon Recycling has selected Accelera to manufacture and supply a 90 megawatt proton exchange membrane electrolyzer system for Varennes Carbon Recycling’s plant in Quebec, Canada. The project, which will be the largest electrolyzer project Cummins has announced to date, will help turn non-recyclable waste into bio fuels and circular chemicals. Wednesday’s announcement also included mention of creating the world’s largest proton exchange membrane (PEM) electrolyzer in operation in the world in Becancour, Canada.

“We have a growing pipeline of electrolyzer orders, which we expect to convert to backlog and to be delivered over the course of the next 12 to 18 months,” said Jennifer Rumsey, Cummins president and CEO, during a presentation with investor analysts recently. “At the end of the first quarter of 2022, we shared that we had reached the milestone of a $100 million in electrolyzer backlog. This tripled to $300 million at the end of 2022, demonstrating the strong momentum in this market. With demand continuing to rise, we are focused on adding capacity for electrolyzer production. During 2022 we announced several capacity expansion investments and expect to have more than two gigawatts of scalable capacity in the 2024 to 2025 timeframe across Europe, North America and China. Additionally, we will continue to deliver battery, electric and fuel cell systemsalong with electric powertrain technologies as adoption continues in the transportation markets.”

Cummins’ 2.5-megawatt electrolyzer will enable local hydrogen production in Paris, France, to power Hysetco’s project to create the largest hydrogen taxi fleet worldwide, fueled by 12 large hydrogen refueling stations, by 2024. The initiative aims to accelerate the transition of on-demand transport and other professional mobility – such as commercial vehicles, buses, and heavy goods vehicles – to zero-emissions.

“Yes, the electrolyzer business is really going to drive the majority of our progress towards breakeven in 2027 for New Power and the growth aspirations that we shared for 2030,” Rumsey said. “And so, we expect during that time frame to scale up the product, the supply chain and manufacturing and continue to see growing backlog and conversion of orders into revenue. And so through that time period, you’ll see margins going positive and improving, the exact margin structure of that business is still unclear. There’s not a lot of suppliers in the market, and we expect demand to be quite strong through that time period.”

WHAT IS AN ELECTROLYZER

An electrolyzer is a device that uses electricity to split water or other components into their constituent elements through electrolysis. Electrolysis is a chemical reaction where an electric current passes through a substance, causing it to decompose into its basic components. In the case of water electrolysis, an electrolyzer uses an electric current to split water molecules into hydrogen and oxygen gases. The hydrogen gas can be stored as either compressed gas or liquefied. The oxygen created is released back into the air or captured and stored to supply to other industrial processes.

They are mostly used to produce hydrogen gas, which Cummins officials say is essential for industrial processes, including ammonia production for fertilizers and fuel for fuel cell applications such as buses, trucks and trains. They can be used for energy storage by converting excess electricity from renewable energy sources, such as wind, solar and hydropower, into hydrogen gas. The gas can then be compressed, stored and used as needed.

Electrolyzers are also a complementary technology to fuel cells. Operating much like a battery, fuel cells produce electricity and heat. Unlike a battery, a fuel cell can produce endless electricity if a fuel – like hydrogen – is continuously supplied. Fuel cells that use hydrogen generate electricity that is zero emissions at the point of use for its applications, meaning fossil fuels are not needed, and no harmful emissions are created.

There are three main types of water electrolysis technology: proton exchange membrane (PEM), alkaline and solid oxide. Each electrolyzer functions slightly differently depending on the electrolyte material involved.

¯ Proton exchange membrane (PEM) electrolyzers — PEM electrolyzers contain a proton exchange membrane that uses a solid polymer electrolyte. When an electrical current is applied to its cell stack during water electrolysis, the water splits into hydrogen and oxygen. The hydrogen protons pass through the membrane to form H2 on the cathode side.

¯ Alkaline electrolyzers — Alkaline electrolyzers contain water and a liquid electrolyte solution such as potassium hydroxide (KOH) or sodium hydroxide (NaOH). When current is applied to an alkaline cell tack, the hydroxide ions (OH-) move through the electrolyte solutions from the cathode to the anode of each cell. The hydrogen gas bubbles are generated at the cathode, and the oxygen gas is generated at the anode.

¯ Solid oxide electrolyzers — Solid oxide electrolyzers, or solid oxide electrolysis cells (SOECs), are solid oxide fuel cells that run in regenerative mode. A SOEC uses a solid oxide, or ceramic, electrolyte. When current is applied, and water is fed into its cathode, the water converts into hydrogen gas and oxide ions. While the hydrogen gas is captured for purification, the oxide ions move to the anode and release electrons to an external circuit to become oxygen gas.

“Yes, the electrolyzer business is really going to drive the majority of our progress towards breakeven in (20)27 for New Power and the growth aspirations that we shared for 2030,” Rumsey said during a February conference call with investor analysts. “And so, we expect during that time frame to scale up the product, the supply chain and manufacturing and continue to see growing backlog and conversion of orders into revenue. And so through that time period, you’ll see margins going positive and improving, the exact margin structure of that business is still unclear. There’s not a lot of suppliers in the market, and we expect demand to be quite strong through that time period. So, I’m optimistic on what margin structure for the business will look like. But,obviously, we’ll share more as we get towards that break-even point and go margin positive.”