Cummins Inc. will manufacture hydrogen electrolyzers in Minnesota, the latest site in its effort to meet a 2025 revenue goal of $400 million a year from cleaning up long-haul trucking and other polluting industries.
Electrolyzer production will get 89,000 square feet of dedicated space at an existing Cummins facility in Fridley, Minnesota. Production will start at 500 megawatts of manufacturing capacity annually, which could grow to 1 gigawatt. Cummins did not disclose how much it is investing in the Twin Cities area or when production would begin.
Hydrogen electrolyzers opposite of fuel cells
An electrolyzer separates water into oxygen and hydrogen, effectively the opposite of a fuel cell, which uses water and electricity to separate hydrogen and oxygen, creating water vapor as the only emission. In an electrolyzer, water is pushed through a stack with electricity. That pulls the hydrogen molecules apart from the oxygen molecules.
When an electrolyzer system uses renewable electricity — such as from solar, wind or hydropower — it produces carbon-free green hydrogen, storable as a compressed gas or as a liquid. Energy-dense green hydrogen is critical to moving long-haul trucks off diesel fuel. It is also useful in reducing the carbon footprint of other industries.
“Expanding Cummins’ electrolyzer manufacturing footprint to the United States is a milestone
not only for our company but an important step in advancing global decarbonization efforts,”
Alexey Ustinov, Cummins’ vice president of electrolyzers, said in a news release Monday.
Incentives drive hydrogen electrolyzer investment
“This is a reflection of increasing government support through the Inflation Reduction Act, Hydrogen Hubs and a blossoming hydrogen economy in the states,” Ustinov said. “Cummins’ ability to leverage our manufacturing, engineering and sourcing knowledge to build capacity will help us meet increased customer demand and continue to accelerate the clean energy transition.”
The federal Inflation Reduction Act calls for a tax credit of up to $3 a kilogram of green hydrogen produced. Other incentives are part of the Infrastructure and Jobs Act act signed into law in November.
Those incentives help get the cost of green hydrogen production closer to hydrogen made through steam methane reforming. In SMR, methane from natural gas is heated to produce a mixture of carbon monoxide and hydrogen. It is called gray hydrogen because it still has carbon content.
Huge revenue upside projected from hydrogen
As Cummins moves more of its business away from diesel engines into low- and zero-emission technologies, it sets itself up for huge revenue growth. Conservatively that could be $3 billion a year by the end of the decade, executives of the Columbus, Indiana-based maker of diesel engines told analysts at an investor day in February.
It expects to post $400 million in revenue from hydrogen production globally by 2025.
In Minnesota, Cummins will manufacture its HyLYZER-500 and HyLYZER-5000 proton exchange membrane (PEM) electrolyzers.They can accommodate power needs from 1.25MW to more than 200MW for small- and large-scale hydrogen generation projects, including energy-hungry data centers.
Cummins recently announced expansion of PEM electrolyzer manufacturing capacity at its Belgium factory to 1GW and has added space to its Mississauga, Ontario, site in Canada. Cummins also plans electrolyzer factories in Spain and China, each starting at 500MW of manufacturing capacity and scalable to 1GW.
The company powers the world’s largest PEM electrolyzer in operation at 20MW at an Air Liquide facility in Bécancour, Quebec. It is working on a 25MW installation with NextEra Energy Resources in Florida that is expected to begin operation in 2023. In all, Cummins has done more than 600 electrolyzer demonstration projects.
“We are in the fuel cell business ourselves, too,” Alex Savelli, Cummins’ managing director of electrolyzers – Americas, told FreightWaves. “We are not only helping produce green hydrogen, but also have equipment that runs that green hydrogen.”