Nel Hydrogen (dedicated hydrogen company) US, a subsidiary of Oslo-based Nel ASA, has secured a purchase order worth approximately $7 million for proton exchange membrane (PEM) electrolyzer equipment destined for a public utility in the Pacific Northwest, the company announced on April 23, 2026.

A First for Public Utility Green Hydrogen

The order comes from Douglas County Public Utility District, known as DCPUD, headquartered in East Wenatchee, Washington. The deal marks a notable milestone for Nel, representing the first green hydrogen plant the company has sold that will be owned and operated by a public utility.

Nel's Chief Commercial Officer, Todd Cartwright, described DCPUD as a visionary customer, citing the district's role in shaping the regulatory landscape that made the project possible.

DCPUD was instrumental in developing state legislation in Washington that allows utilities to produce and sell renewable hydrogen, positioning the district at the forefront of a still-emerging market segment for publicly regulated energy providers.

DCPUD General Manager Gary Ivory said the partnership with Nel Hydrogen would allow the district to bring renewable hydrogen directly to its community. He also noted that the project would benefit the district's Wells Hydroelectric Project and help advance hydrogen adoption across the region.

Grid Balancing at the Wells Hydroelectric Project

The primary operational rationale for the installation centers on grid balancing at DCPUD's hydroelectric project. Hydroelectric facilities face a common challenge: when electricity generation exceeds demand, operators must ramp generators up and down to manage the imbalance.

This mechanical cycling creates wear on turbine units and their associated equipment, increasing maintenance costs and shortening the operational life of the machinery.

By deploying PEM electrolyzers at the site, DCPUD will be able to redirect that excess power toward splitting water into hydrogen and oxygen rather than making constant mechanical adjustments to its generators.

The electrolyzer essentially acts as a flexible electrical load, absorbing surplus generation in real time. This approach reduces the frequency of mechanical adjustments to the turbines, lowering both wear and ongoing maintenance requirements.

Beyond the grid-balancing function, the hydrogen produced at the facility can be directed toward what Nel describes as other high-value applications, though the press release does not specify what those end uses would be in DCPUD's case.

Equipment Specifications and Manufacturing

The purchase order covers containerized PEM electrolyzer equipment, a format that packages the electrolysis technology into modular, self-contained units suited for deployment at existing infrastructure sites.

The electrolyzer stacks themselves will be manufactured at Nel's production facility in Wallingford, Connecticut, keeping the manufacturing footprint within the United States.

Nel confirmed the order is a firm purchase order, and the equipment is expected to be operational in the first half of 2027. That timeline gives the project roughly a year from the order announcement to full commissioning, a relatively compact schedule for utility-scale hydrogen infrastructure.

PEM Technology and Nel's Commercial Position

Proton exchange membrane electrolysis is one of two dominant technologies used in industrial hydrogen production through electrolysis, the other being alkaline electrolysis.

PEM systems are generally favored in applications requiring dynamic response to fluctuating power inputs, making them well-suited to renewable or hydroelectric generation sources where output can vary.

The ability of PEM electrolyzers to ramp up and down rapidly in response to changing grid conditions is precisely what makes them attractive for the kind of load-balancing role DCPUD is pursuing.

Cartwright highlighted this operational flexibility in his comments on the deal. He said the flexible operation of Nel's PEM electrolyzers is what enables the district to balance load with demand while simultaneously producing a high-value fuel.

That combination of grid services and hydrogen production represents a dual revenue or value proposition that utilities and project developers have increasingly pointed to as a way to improve the economics of electrolyzer deployments.

Legislative Groundwork in Washington State

The deal also reflects the significance of the policy environment in Washington State. DCPUD's active role in shaping state legislation to permit utilities to produce and sell renewable hydrogen was a prerequisite for a project of this nature moving forward within a regulated utility framework. Without that legislative foundation, a public utility would not have had the legal authority to enter the hydrogen production and sales market.

That regulatory work places DCPUD in a relatively unique position among American public utilities, most of which have not yet pursued the kind of statutory changes needed to enter the hydrogen business.

The East Wenatchee district's experience could serve as a reference point for other publicly regulated utilities considering similar moves as hydrogen policy continues to develop at the state level across the country.

Nel ASA is listed on the Oslo Stock Exchange under the ticker NEL. The company operates through its subsidiary Nel Hydrogen US for its American business activities.

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