Welcome, everyone, to this first quarter presentation. Welcome to a slightly unusual format. Due to the COVID-19 situation, we're not doing this as a physical meeting, we're only broadcasting this live. Welcome, anyway, whether you're watching this live or in a rerun. We also asked Jorgo Chatzimarkakis from Hydrogen Europe to join us today in a separate section. That's going to be interesting. These are challenging times, no doubt about it, but it is also very encouraging to see that there are a lot of positive momentum in terms of trying to make hydrogen accelerate its development. That is basically what we are going to talk about when Jorgo is on. He will talk about the 2x40 GW Initiative, which is currently taking place, trying to make green hydrogen part of the European recovery plan. We look forward to that.
In terms of practicalities, the questions related to both my presentation and Jorgo's presentation will be taken at the end. Bjørn will facilitate that. He is already sitting ready to take questions, you can pose them as we go through the presentation. We will go through the financial highlights. We will talk about Nel in brief. We will talk about the developments of the quarter, we will pass the word over to Jorgo to talk about the Two Times 40 Gigawatt Initiative. We will have a summary and outlook, finish off with the Q&As as usual. COVID-19 actions, effects, and potential recovery. When the COVID-19 broke out, our first priority was naturally safety. Safety for our employees, safety for our customers, our partners, and also safety for other stakeholders surrounding Nel.
We implemented a long list of restrictions and guidelines to be able to maintain safety. In terms of transparency, we gave a number of updates in March and also in April. We also have given a lot of updates, I think it's about eight updates internally. As the situation developed, we tried to inform and help people how to act as this situation developed. Revenues and earnings has been negatively impacted due to the COVID-19 situation. I'll highlight four items in particular. We've had to implement so-called stay home, stay safe policies, as a direct consequence of the national guidelines. That has obviously reduced the speed of production in our facilities, even though they have maintained open. We've had delays in installation and commissioning.
Because of travel restrictions, we've not been able to move to some countries and to some regions.
A portion of the revenue recognition is tied to installation and commissioning, so that has had an effect on revenues. We also see that the general slowdown in momentum in business has customers been dragging their feet in terms of placing and booking orders. We have seen some less bookings than we would normally have seen. Obviously Nel is geared for growth. We've added indirect costs, we've added additional employees, and when we have a shortfall in revenue, that naturally also has a negative impact on our results. Not all is negative. We should remember that. We may actually see an acceleration of hydrogen-related developments as a direct consequence of this COVID-19 situation. Green recovery.
Green recovery is a key word here. That is reported and supported by various governments around the globe. That's also what Jorgo is going to talk about a bit later. We therefore reiterate our confidence in our long-term strategy, our long-term potential of the market, and maintain the Nel overall strategy. As mentioned, we have given a number of updates during this pandemic. Revenues only grew slightly. However, the pipeline is still all-time high. We see a strong momentum there. The backlog is close to NOK 600 million, almost up 50% from the same period last year. It's up more than 15% from the end of 2019. That is positive. We still had a lot of activity in the quarter, on top of dealing with this COVID-19 situation. It's been quite a lot of hard work on everyone.
In terms of running through those elements very quickly, we strengthened our organization. We added Filip to take over the electrolyzer division. We added Kjell Christian to take over our CFO. They are now well introduced and up and running in their respective roles. We received a PO for a 1 MW containerized PEM electrolyzer from Trillium. We entered into a strategic collaboration agreement with Kværner. We were awarded a DOE grant. We got a PO for Navy stacks from United Technologies. We entered into a framework agreement with Lhyfe for 60 MW electrolyzer. We successfully raised capital during the quarter. We'll talk more about all of these elements as we move through the presentation. Let's move over to the financial review. We have already talked about the COVID-19 effects. I'm not going to repeat all of those here.
We have so far kept the workforce largely intact to maintain some sort of momentum when the situation normalizes. That means that we've only reduced hired personnel and contracted personnel. The reason is that we hope to see a slightly faster recovery in the hydrogen business compared to some other industries that you may think of. We obviously need to continue to assess the situation and if there is a significant change in how this develops, we need to reassess and maybe think differently. As mentioned, we are geared for growth. We have added a significant number of employees. That means indirect cost. When we have a shortfall in revenue, that impacts our financial results. In addition to that, we do have still the negative impact from the non-recurring ramp-up related cost.
This quarter, it was calculated to roundabout NOK 23 million, and that we will also continue to see. That has to do with the general ramp-up of new facilities, et cetera. We have a very strong cash position. That is something that we are very happy about. Since January 21, we raised almost NOK 1 billion in gross proceeds. Both transactions were oversubscribed, and it is very important for us to have a strong financial situation position to execute on our strategic plans. With these funds, we intend to accelerate our developments in both the organization and the technology to be able to respond to the underlying development that we see in the industry and to be well-positioned for the longer term.
We therefore can say that we have very comfortable cash situation going forward to deal with the strategy of Nel.
I'll quickly go through Nel in brief for new listeners. What makes Nel different and unique is that we are integrated with electrolyzers and fueling station. No one else has the capability of delivering, in-house produced and in-house developed technology in that way. We are also becoming increasingly global as a company. We have obviously our facilities in Norway and Denmark and in the U.S., but we also have people and organizations in all the relevant places like California, Korea, Japan, and China. We are the world's largest manufacturer of electrolyzers. We have delivered more than 3,500 systems in more than 80 countries. We are also one of the leading players on fueling stations where we have produced and delivered more than 50 units in nine different countries. As mentioned, we have three main locations for our production.
We have our Wallingford, Connecticut facility in the U.S., where we have slightly more than 40 MW of capacity. We have our Notodden/Herøya facility, where we are in the process of expanding our facility up to 360 MW. We have our facility in Denmark, Herning, where we have the capability of producing up to 300 fueling stations per year. Something else which is quite unique about Nel is that we have a very long experience in each of these fields. In terms of PEM experience, we have 20, 30 years of experience in PEM in-house. We have more than 90 years experience in alkaline, and we have around about 15 years experience in fueling stations. We really are not a newcomer to this industry. We have a large portfolio of equipment sitting around the globe.
If you have a new customer that wants to see a facility that has been running for five years, 10 years, 15 years, even 20 years, we can point them to another customer that has successfully and happily been able to run that piece of equipment for a very long time. That is always good when you talk about large scale, big projects with new customers. In terms of developments for the quarter, let's quickly run through that. At the end of February, we signed an agreement for an MC250 containerized PEM electrolyzer with Trillium. This, if you remember back, was a product that we launched last year. We received a lot of interest for this product, and we hope to also see more order on this product platform going forward.
Trillium is located in Illinois and is planning to run a fleet of 12 fuel cell electric buses. This electrolyzer will produce then hydrogen for these buses. The project is DOE funded, and the contract has a value of $2.2 million US dollars. We also, in the beginning of March, signed a strategic collaboration agreement with Kværner to support larger and complex projects. Kværner can contribute with so-called EPC, engineering, procurement construction services, as well as project management. We are also able to utilize the vast supply chain of Kværner for things like vessels and pipes and steel frames, et cetera, where they have pre-qualified suppliers in different parts of the world. The first project is still to standardize certain building blocks, the 20 megawatt, 100 megawatt, and the 200 megawatt unit.
It's not only standardizing the design, but also standardizing the way that we install the equipment. You produce prefabricated pipings, which are shipped to the site in a 40-foot container. Everything goes quicker, and obviously when you standardize like that, it should have and will have a significant impact on the cost. That is a work that is ongoing at the moment, and we have also, we're also reviewing a number of different projects, in different parts of the world together with Kværner to develop this relationship further. We also got awarded a grant from DOE of $2 million, and that goes towards producing a new generation type PEM electrolyzer. If we're successful, it will reduce both the OpEx and the CapEx of the electrolyzer.
The OpEx will be reduced through efficiency increases and together with reduced CapEx, that will obviously deliver and generate lower cost renewable hydrogen. This is part of the DOE's H2@Scale program initiative. We received an order for the so-called Navy stacks, from United Technologies, that will produce critical life support oxygen to U.S. and U.K. Navy in various classes of nuclear submarines. That requires very high reliable products, high quality products. We are very honored to be able to deliver this under an exclusive agreement. The last PO was for $1.6 million. However, we received two smaller POs earlier in 2020, which we did not announce because they fell below the threshold. In total, to date, in 2020, the total amount of POs that is coming from United Technologies amounts to $3.1 million. That is very encouraging.
We also, in April, entered into a framework agreement together with Lhyfe in France. Lhyfe is the owner-operator of electrolyzers and fueling station infrastructure in France, and their target is to produce green hydrogen for different applications in many different locations around in France. The agreement is for around about 20 additional electrolyzers. We received the first call-off for the first electrolyzer under this agreement, and that first call-off and that first electrolyzer will be installed early 2020. While I am on large projects and important projects, I also want to mention Nikola. I don't have a separate slide on it. We have some commentaries in the report on Nikola. We will probably get some questions on this. We are working well together on the techno-economical optimization of our stations.
That means, we are working on looking into the design of the station, the redundancy of the station, and measuring that up against CapEx and all the design elements. That is a complex work. It involves technical people with a lot of competence and with the stay home, stay safe and travel restrictions, that work has obviously taken more time than we would have liked. The parties, Nikola and Nel, hopes to conclude that work in the first half of 2020. We will move over to the 2x40 GW Initiative, and we've been so lucky to get Jorgo Chatzimarkakis, who is the number one in Hydrogen Europe, the Secretary-General, to join us in our presentation today.
I must say that the entire COVID-19 situation is quite frustrating because we all want to see a fast move towards the zero emission future.
Even though the COVID-19 situation has generated certain challenges, it also potentially could lead to something good. We may actually see that hydrogen-related activities will accelerate as a result of COVID-19. To be able to share some of that optimism with you and with us, we have invited Jorgo, Secretary-General of Hydrogen Europe, and he will give us an example of how Hydrogen Europe is working to turn the COVID-19 situation into something positive. I think that's nice to hear these days. I hope that Jorgo can hear me. Before that, we have agreed to introduce this segment. We have agreed to play a little video. This is Mr. Frans Timmermans. He's the Executive First Vice President in the European Commission. I hope that title was correct.
In other words, he's number 2 in the European Commission, he's responsible for the European Green Deal, and he's also a big fan of hydrogen. Let's hear what he has to say, and then Jorgo, you can take it from there.
That is my dream, that people understand that also using hydrogen, we can clean up our environment. We can rebalance our relationship with Mother Earth, who's complaining because we are hurting her too much. I think the important thing is that people know we need to make this transition. Because this technology is still in development, it's not going to be profitable in the immediate. You also need a lot of public support for this. Because it is going to be profitable in the mid-term, you also have an opportunity for private investors to invest into this because the revenues for them will be very interesting in the mid and long term. That's why I believe this is one of those sectors where public-private partnership is essential to make a success.
The most important thing is you have the future in the palm of your hands.
Work with us to make sure that Europe stays in the lead on hydrogen, and then we can show that hydrogen can be the energy source of the future.
Okay. That was the introduction from Frans Timmermans. Jorgo, can you hear me?
Yes, I can hear you, Jon.
Excellent. Thank you for joining us, Jorgo. Very encouraging. We need something inspiring in these days, huh? That's very good. Thank you for that. I will then flip for you, so you tell me when I should move to the next slide, and then we take questions at the end.
Excellent. Thanks very much, Jon, for accepting me and having me here. I'm representing Hydrogen Europe, you know it very well, Jon. Nel is a member, is one of the active members in Hydrogen Europe. Next slide, please. You see the membership. It's a lot of members, of course, from the energy side. We had last year 46 new members, this year, 30 new members. All in all, we are over 200 now. You can see that especially also oil industry joins and wants to decarbonize and needs hydrogen. We have also mobility, and also industry applications. We have national associations that's very important to implement law into national legislation, and we have research. Next slide shows you that the energy, the technology in hydrogen is maybe the most valuable in our field.
Of course, we have the electrolyzer companies, and you mentioned yourself already being part of it. We have also fuel cell producers, fuel cell producers for stationary and mobile applications, and some companies around. If we move to the next slide, we will understand why the European Union and many member states in the European Union, and around the globe, of course, but especially in Europe, are currently recognizing hydrogen. It's a multitalent. It has three elements. It is, first of all, an energy vector, not only a carrier, it can store energy. Second, it's a fuel, and third, it's a chemical feedstock. This is the missing link for the energy transition as many Europeans see, and that is why a legislation is being prepared. Next slide shows the impact of COVID-19 on the energy demand in the world.
This slide here has been published last week by the IEA, the International Energy Agency. A lot of people look at what they say. Here you see that the energy drop has massively affected, of course, coal, gas, and oil. It has not affected renewables. Renewables are, if you wish, slight, but a winner. Now we need to take the momentum also, and the European Commission has understood this, and help renewable energies to even flourish more. The missing link, as I just said, is the electrolyzer technology, because power to gas, power to hydrogen is very important for this transition. Next slide, please. We know, Jon, you described that it's frustrating to see COVID-19. However, the European Commission has understood that it's a very dangerous moment also for the climate activities that were ongoing.
We might see some governments switching back to classical recovery. In order to prevent this, they want to do both. They wanted to combine a new Marshall Plan, if you wish, with a European Green Deal. Basically, the idea of a European Green Deal, and we just heard Commissioner Timmermans, is the green recovery plan. If you go to the next slide, you saw this guy already. The Executive Vice President is number 1B in Europe. It's more than number two. He's very influential, and to be honest, I'm very happy about that. He comes from the Netherlands. The Netherlands are a country that experience very much hydrogen applications at the moment because they switched out of gas also after coal and after nuclear. They switched out of gas, and they replaced this with hydrogen.
He knows from his home country very well how this can be implemented. Next slide shows the initiative that you referred to. In order to ramp up hydrogen as the missing link, as the enabler, we need to have more electrolyzers. That is why we came up with a 2x40 GW electrolyzer or green hydrogen initiative. Basically, this is to push the electrolyzer business, and this was picked up by the European Commission. This was personally picked up by the Executive Vice President, Mr. Timmermans himself. He wants to make this one of the central parts of his recovery plan. We are very happy about that. We had a beginning of last month, a video conference with him. Jon, you himself, you were one of the speakers.
Some selected CEOs spoke to him and other commissioners, that was very important because at the next slide, you see that it helps to do three things. On one hand, it helps, first of all, to win the renewable energy from the sun-rich regions in the south, also neighboring Europe, and wind-rich in the north. The two times 40 is one time Europe, including, of course, Norway, and the other time 40 is Northern Africa and Ukraine. We are about to build a backbone to transport this hydrogen, a pure 100% hydrogen backbone. The third element is that we have also to look at the salt caverns. We need to store, seasonably store renewable energy. This is only possible if you take gas grid and salt caverns, and go this way. Next slide shows that this happens already.
First of all, what we want to show is the amount of investment. The amount of investment you see here within Europe and outside Europe. You can see that within Europe, the electrolyzer is not the biggest part. The biggest part is definitely the renewable, the investments in renewable energy, which is also pushing them a lot. You have heard that the renewable business in some member states, take Germany, minus 90%, nine zero percent last year for wind onshore. We need to help them. They need to help us, but we are somehow together. You see here in the different investments that are in our plan that notably in Europe, it's offshore wind, notably in Northern Africa, it's Solar CSP. You see also the amount of jobs that we are about to create with this initiative.
If you go to the next slide, you will see that this is not theoretical. This really happens already. Our members, Shell and Gasunie, together with Groningen Seaports in the Netherlands, have announced a NOK 15 billion invest into a project called NortH2. NortH2 is a project that is very clearly going for green hydrogen offshore wind. It's four gigawatts in the next 10 years, then it scales up to 10 gigawatts. First, it's onshore electrolysis, then it's offshore. If you go to the next slide, you will see that this combination of offshore electrolysis will lead very soon to something which we call hydro renewables. Hydro renewables is something that is to be seen together, the electrolyzers are the enabler to bring more hydrogen via the pipeline system into the system.
You also see here a tweet of Fatih Birol.
Fatih Birol is the director of IEA, and he tweeted last Sunday, "This is the big time for batteries and electrolyzers as they are ready, and they are needed, and they should be part of the recovery plans." Thank you, Jon. This next slide shows just that this shift happens now, and it needs to happen now. Thank you, Jon.
Okay. Thank you very much, Jorgo, for those inspiring words. Please hold on so that we can keep you for the Q&As. In the meantime, we will try to wrap up with summary and outlook on our side. I've basically explained and talked about the impact of COVID-19, so I'll not repeat all the details. Tomorrow and over the weekend, we will actually restart some travel activity to different parts and to get commissioning and installation started again. That is important for revenue recognition. We see some improvement in that area. We are also slowly gaining more and more momentum in our production as things are opening up. As we communicated, we will still be impacted by the stay home, stay safe elements on policies.
We don't know exactly how long this situation is going to last, and we don't know exactly the effect that it will have at the end. We do hope, as we heard now, that this could actually lead to something positive and that you could see accelerations in different parts of the world. There, Jorgo's initiative was a great example of that. We do reiterate our strategy, our long-term view, and push forward on that. That means that despite the COVID-19 situation, our strategy has not changed. We still focus on being world-class on safety. We still focus on maintaining a cost leadership. We are pushing very hard to be a technology frontrunner both in terms of CapEx and OpEx.
We want to continue to be the preferred partner and to have unique solutions and services in different parts of the world and be the chosen partner for our customers. We continue to ensure that Nel is well-financed, and you saw two good examples of that in the first quarter with our equity raising. Obviously we would want to maintain to have a global presence in the relevant markets for our products and services. Let me then finish off with a more general outlook beyond COVID-19. That is that the hydrogen market is expected to grow substantially, and renewable hydrogen is on the trajectory to outcompete fossil hydrogen, both within industry and mobility applications. Within mobility, we do see accelerated movement in the heavy duty industry.
To maintain and strengthen our position, we will continue to invest in our technology, continue to invest in our organization. We will invest in our PEM platform, we will invest in our alkaline platform, and we will obviously invest in our fueling platform as building blocks for the future. That means that also EBITDA, as we mentioned many times, will continue to be negatively impacted by so-called ramp-up related costs. With that, we have completed the formal part of the presentation, and we are ready to take some questions. Bjørn have received some questions maybe, and it could be for Jorgo or it could be for me. I don't know where you will start, Bjørn.
We have most of the questions are for you, Jon. We have one here from Beric Schwartz Haupt. I mean, you have already mentioned Nikola in the presentation. Nikola also introduced the Badger, and he is wondering if there are any extra station mentioned, planned, as mentioned by Trevor Milton.
Well, we thought the Badger was really, really great when they came out with that. I think that's a really good example. It's a very, very nice product. There may be opportunities also for the Badger. Of course, when you build heavy duty infrastructure, fueling infrastructure, it is very easy to add a fueling dispenser for a light duty vehicle. All of the stations that Nikola will build for trucks will also have dispensers for cars, but obviously there could also be a potential beyond that for the Badger. That we haven't gone into yet. We are concentrating on getting the work we are doing completed and get that going. That will be something we will need to come back to.
There is a question from Lars Bjerga. Obviously now, Nikola is planning a listing on NASDAQ, and he's asking, "When will Nel be listed in the U.S.?
The dual listing is kind of a thing of the past because now you can buy shares anywhere from anywhere. We being listed in Norway, we still have a lot of shareholders in Central Europe, in Germany, in Austria, in other parts of Europe, in the U.S., in U.K. For the time being, we don't have any plans to list in the U.S. or have a dual listing. That could obviously change.
There is a question from Andrew Breiter-Wu. How do you see the next few quarters looking in regards to top line revenue due to COVID-19 for operations in the U.S. and across Europe?
We have given some updates. I gave some more updates now in the presentation. I think that's as far as we will go this time around. We typically do not guide in detail. When you build a company like Nel, you are working with large orders, you may see some quarters that moves quickly and then where you recognize more revenue and other quarters. We typically do not guide in detail. I'm not going to start doing that now either.
We have a question that I think goes to Jorgo. It's from Lars Andresen, and he's asking, "Do you see Norwegian Hydro and Wind Power as a potential player to deliver hydrogen into the EU backbone network you talked about in your presentation?
Absolutely. Europe cannot produce the hydrogen, the EU cannot produce the hydrogen that it needs for all the applications, especially in industry and mobility alone. We need a lot of support from the neighboring regions. Norway, I don't regard Norway as neighboring because I regard it as a part. Especially, the pipeline systems offshore in the North Sea will be a very important factor to produce wind and hydrogen offshore, and then to use these pipeline systems because they will be the basis of the backbone that we are creating. Norway is fully in.
That's good to hear.
We have a question from Mikkel Nyholt-Smedseng, and he's asking, "How much in % approximately are we anticipating to sell of PEM and alkaline in 2020 and 2021?
I really do understand that people are pushing for guidance here. It goes a bit back and forth. Some quarters we book more PEM, some quarters we book more alkaline. We think that both platforms are extremely important going forward. That's why we push both of them. We think that alkaline is key for very large scale at the moment. We are talking hundreds of megawatts projects. Here, alkaline is more efficient and cost less. PEM is going to be relevant also increasingly in larger projects, but obviously at the moment, more in smaller projects. We need to push both because some customers want one platform, some customers want another platform, and some customers may even want to combine the platforms. It's important for us to be able to offer both and have the most cost-effective solution on both platforms.
That's our target and that's what we're shooting for.
We have a question from Lars Bjerga. What's the status on the RotoLyzer?
The RotoLyzer. We have given some updates on that earlier. That has been tested and tried. We have a second-generation prototype that has been run all the way until the end of 2019. We have made good progress on that. We have reported that to the Forskningsrådet related to our progress. How we will take this forward in terms of launching a commercial product, obviously depends on how the market is moving and what the market is demanding. At the moment, we are not in a rush to make a decision on that. There are so many other big projects that we have to concentrate on and add resources to. Our focus has now been on large scale, and I think that's been the right decision.
We will make a move on that technology platform when the market at the time is ready.
There's another one to Jorgo from Gabe Jorgo. Jorgo, what is your expectation on the market development for electrolyzers following the 2x40 GW Initiative? Has that been a part of the analysis, how you believe the industry can develop as a result of that?
Absolutely. We have seen in the last years that the scale-up has to do, of course, with some signals from policy. Yes, indeed, the biggest investors at the moment, as you see, Shell, are industrial companies. However, if the course is set by the politicians, by the policymakers into a greener and a more renewable and low carbon future in the energy system, it's crystal clear that then the orders will come. I've talked to Jon a lot of times, and he said, "If the orders are there, we can produce." That is what we want. We want now that the orders come naturally. The political environment favoring hydrogen will clearly set the seals into the direction of more electrolyzers and also more electrolyzer factories, so manufacturing.
This is also what we discussed with some politicians, especially in Germany, where there is the energy transition from coal to another future. They have reserved some NOK 40 billion for that. We have directly spoken to governors from these regions, Brandenburg, North Rhine-Westphalia, and they want, for them it's an asset to have in their geography, in their region, the manufacturing of electrolyzers. You will see both manufacturing more and also purchasing of electrolyzers. I see a real future for that because the decision has been taken by the highest people in the European Commission, and I'm very optimistic.
There is another question on scaling up, which I think can be the one that we round off with. It's a question about expansion. It's Sam Smith. He says, "You currently have 40 MW capacity of PEM electrolyzer. He points out that ITM Power is ramping up, first to 350 MW, then to 1 GW, and he's wondering when we will ramp up our PEM manufacturing capacity.
First of all, we do ramp up our alkaline capacity at the moment. We have invested in the 360-megawatt line. It's a fully automated line, which I think is completely unique. I don't think anyone is doing it the way we are doing it. It's fully automated with robot cells and a fully automated chemical line. We're matching that with the standardization that we do together with Kværner. I think that's going to be an eye-opener for many players of what we can do on the cost of electrolyzer. I'm talking here about big projects. We have a pipeline of multiple gigawatts. We would like to do exactly the same on PEM, and we are preparing for that.
Anyone can tell you that the demand and the pipeline for PEM in terms of a large-scale project is not as big as an alkaline.
That is clear, and that is the reason why we ramp up there first. We are ready to invest also in the PEM side. We now need to make the building block, we need to make the concept for the large-scale PEM, that needs to be translated into production line. The good thing is that we can then reuse a lot of the logic and a lot of the learnings. There is a lot of synergies between alkaline and PEM. Even though they're different platforms, there is a lot of synergies between the balance of plant and the way you design and the way you run the production line. That competence we already have in-house, so we can use that again. With that, it's quarter to nine. Thank you very much, everyone, for participating. Thank you for your questions.
Thank you, Jorgo, for your contribution. Great to see you again, and hope that we will be able to meet physically also in the not too distant future. We will welcome everyone back in the second quarter presentation. Thank you very much.