INTERVIEW | Why this young green hydrogen developer secured a 5GW electrolyser supply before deciding on projects




First Ammonia is intentionally building its project portfolio backwards, CEO Joel Moser tells Rachel Parkes


When start-up First Ammonia burst onto the green hydrogen scene in September 2022, seemingly out of nowhere, it was via the announcement that it had made the world’s largest electrolyser order, as part of a deal to secure an unprecedented 5GW of solid-oxide electrolysers.


The 5GW “framework capacity reservation” with Danish electrolyser Topsoe, in which New York-based project developer First Ammonia paid to reserve capacity on Danish firm’s production lines, included an initial order for the first 500MW and underpinned Topsoe’s decision to take final investment decision (FID) on its first electrolyser factory in Herning, Denmark.


This amounted to a substantial financial commitment — but one that was based on a business plan with no offtakers and no guaranteed revenue streams.


In fact, First Ammonia, which was only incorporated in early 2022, was at the time in the earliest possible stages of developing its projects to make green ammonia (derived from renewable hydrogen) for export to international markets.


It had barely made a decision on where to site any of the projects that would enable the company to produce its target of five million tonnes of green ammonia by 2030 — let alone secure an offtaker.


“Our first job in our view was to secure the electrolysers,” Joel Moser, the company’s CEO tells Hydrogen Insight, adding that at the time it was in the early stages of developing green-ammonia export sites in Wilhelmshaven and Brunsbüttel in Germany.


“For many months after the early formation of our company, nobody was buying green ammonia. We did not have an offtake secured before we secured our electrolysers. That came first.”


The fact that the German sites were ultimately surpassed as priority projects in favour of an export site in Texas, is testament to how early the electrolyser-procurement process started.


According to First Ammonia’s team, this site flexibility is a deliberate feature of the company’s technology approach, where plants are designed in such a way that they can be dropped, placed, and plugged in at a new location without having to rework the engineering.


But the company does now have a provisional offtaker, having signed a non-binding agreement in October 2023 to sell an expected 300,000 tonnes a year of green ammonia to Germany’s Uniper — all the volumes from the first phase of the Texas project.


This suggests that Moser’s approach has paid off.


But with many electrolyser manufacturers in Europe and the US reporting stalling revenues and issuing profit warnings on the back of cautious green H2 developers that are not prepared to make firm orders before financing is in place, First Ammonia appears to be an outlier.


“[This is] contrary to the way developers operate,” Moser explains. “Your typical developer picks a site, does a FEED [front-end engineering and design study], designs a project, and then starts talking to offtakers. We did it backwards on purpose.”


The question is, why take such a risk?


“If you look at the scope of the growth of the hydrogen industry and the fact that there was not and still are not significant electrolyser production happening in the world, we just looked at the math and said there’s going to be a lot more demand than electrolysers,” explains Moser. “And that the development of electrolyser production has grown slowly.”


“The apparent demand for hydrogen production has changed from a tremendous amount of early enthusiasm to now a dip,” he acknowledges. “But I don’t think that we were wrong.”


This dip is evidenced by analysis from research house BNEF and investment bank Citigroup, which estimates that the global green hydrogen electrolyser industry is heading for an astronomic capacity oversupply of around 61GW by 2025, mostly on account of the delayed scale-up of green hydrogen projects in Europe and the US, as well as Chinese equipment manufacturers ramping up.


But Moser is unabashed, pointing out that not only is the US set for a green hydrogen boom but that his company will shortly be competing with demand from all over the world — a viewpoint that echoes comments made by Topsoe CEO Roeland Baan in a recent interview with Hydrogen Insight.


“The demand for green hydrogen is going to grow exponentially,” says Moser. “But you can only build electrolyser factories so fast. You can only make electrolysers so fast. So I continue to hold firm to the view that the gating issue for the green economy will be the production of electrolysers.


“And not just any electrolysers, quality, reliable electrolysers from producers who have the capacity to deliver them on time and of a quality.”


The other clear factor in First Ammonia’s decision-making on electrolysers is the relationship Moser has built with Topsoe since 2016.


In fact, the idea for First Ammonia was formed in 2020, in the midst of the pandemic, on the back of Moser’s work as founder and chief executive of Aquamarine Investment Partners, an early investor in the first iteration of a blue methanol project in Lake Charles, Louisiana.


This work brought him and his team at Aquamarine — which later reformed into First Ammonia n— into contact with Topsoe, already an ammonia technology company and with blueprints for SOEs that had been sitting on the shelf for more than two decades.


“I visited Topsoe [for Lake Charles] and saw the high level of pure science happening at this company and made a judgement that this was a company I want to build a relationship with,” he says. “And we shortly thereafter signed a global joint venture to develop projects.”


He will not be drawn on the specifics of the electrolyser deal First Ammonia has with Topsoe, only that the company has a binding order for 500MW from Herning and that the capacity reservation agreement it has for the remaining 4.5GW is also binding, pending “gating issues and thresholds and requirements on both sides”.


The first 300MW of the 500MW order — due for delivery in mid-2025, according to Topsoe — is destined for First Ammonia’s proposed green ammonia project in Port of Victoria in Texas.


Phase one of the Port of Victoria scheme encompasses two “trains” of hydrogen-to-ammonia production, one with 100MW electrolyser capacity and the other with 200MW.


This would cost around $275m to build, Moser estimates, and is currently going through environmental permitting, which First Ammonia is hoping to secure this year, ahead of a final investment decision targeted for mid-2024.


Commercial operation of the first 100MW is then earmarked for 2026, although the firm has also laid out a proposal to eventually expand electrolyser capacity to 1GW, requiring a total investment of close to $1bn (including the first phase).


The reason for the early expansion reveal — before spades are even in the ground on phase one — is due to what Moser describes as US regulators’ “horror of incrementalism” in development.


“Regulators in Texas say, ‘if we're evaluating the environmental impact, we want to know the whole scope of the project’. They do not want information bit by bit about what you're intending to do,” he explains. “Well, we actually would like to do it bit by bit, but we have to stake out a whole project.”


The site in Texas is large enough for 1GW, he says. “We’ll keep on building and installing electrolysers and ammonia synthesis equipment on that site, as long as the IRA [Inflation Reduction Act, which grants green H2 producers up to $3/kg in tax credits] is there and we can procure the power.”


However, this does not necessarily mean that the final 200MW of its electrolyser order with Topsoe will be delivered to Texas for a GW-scale expansion. The machines could find their way to one of First Ammonia’s two aforementioned German sites, which the company is still developing on a slower track, Moser tells Hydrogen Insight, or even to one of the other ammonia production sites it is exploring elsewhere in the world.


The two German projects were at one point top of the list for development, he explains, but then in 2022 the spike in electricity prices following Russia’s invasion of Ukraine, as well as the passing of the IRA, upended the company’s siting priorities.


“Our site development director was evaluating up to 20 different sites in the US, and we had already pre-selected two as possible sites,” says Moser. “So when the IRA passed, we very quickly switched the destination of our first equipment and our first project site to the US.”


The official formation of First Ammonia so soon before the IRA’s announcement in 2022 begs the question of whether the company knew it was coming, especially given Moser’s other role on the advisory board of Columbia University’s Global Energy Policy Centre.


“No, we did not,” Moser says. “We had no idea. It was a shock to me. Some of the folks I know who are policy insiders later said they knew it was coming, But I had no idea. We had no idea.”


Both Port of Victoria and First Ammonia’s other US site are located in regions of the country where, according to Moser, a massive build-out of renewable energy is resulting in excess power production at various points of the day, which in turn leads to periods where electricity is negatively priced.


Those sites were selected to take advantage of that negative pricing, and for this reason First Ammonia intends to operate the green hydrogen plant intermittently, keeping the SOEs on hot standby in order to ramp up in a matter of minutes.


“It was our view that, philosophically, hydrogen must be produced intermittently in order to be fully green,” Moser says. “If we’re producing 24/7, we’re drawing electrons potentially at a time of the day when those electrons have a better use as electricity. So we’ve always planned to operate intermittently.


“In a way, some of the inefficiencies of the ERCOT [Texan] grid and the fact that the IRA is encouraging renewables build-out creates the very financial circumstances and sort of philosophically consistent circumstances to produce hydrogen on that grid.”


First Ammonia plans to procure its electricity from a newly built renewables project, and then operate its electrolysers on a fluctuating basis, matching the availability of renewable power, so as to meet the temporal matching requirements of the draft US IRA regulations, released by the Treasury in December.


Moser says, overall, he is satisfied with the proposed guidance, barring what he describes as a couple of “minor glitches”, which the company is addressing in collaboration with industry, think-tanks, and non-governmental organisations.


The company will not be drawn on the exact electrolyser utilisation rate it expects to achieve operating in this way, saying only that it will be “high”, and that it will plan maintenance for February, when the Texas grid typically faces the highest demand relative to actual renewables generation.


Moser says First Ammonia’s utilisation and power procurement modelling suggests that the business would be “comfortable” within a range of scenarios — and that it will be bankable enough to raise the necessary funds to build enough capacity for five million tonnes of ammonia by 2030.


The company is working on raising $10-15bn in capital on the international markets, including equity and project finance, to fund the build-out and expansion of Port of Victoria, as well as another US project in Clovis, New Mexico, and for nine other potential sites around the world.


To this end, it is currently in talks with a potential, as-yet-unnamed, equity partner for phase one of Port of Victoria, with the aim of securing the 30% equity financing it needs to complement its target of 70% project financing.


First Ammonia itself is financed by the principals of New York-based investment fund Christoffersson Robb, which was itself an early mover in offshore wind, financing projects in France and Germany, as well as the 300MW Thanet offshore wind project in the UK.


But despite its investment-fund backing, First Ammonia has opted to stick with green hydrogen and ammonia production and forgo ammonia trading — a task Moser is happy to delegate to offtaker Uniper.


“Early on we imagined we might take a position in the merchant market of the product and perhaps at some point in the future this is an option,” he explains. “But for now, our focus is entirely on making this stuff.”



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