Hydrogen hope from Dresden: How electrolysis pioneer Sunfire wants to get started

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Since the Russian attack on Ukraine, the production of hydrogen has gone from being an expert topic to being a top priority project. The energy source, which tends to be low in pollutants, has always been intended as a building block for the energy transition and as a storage medium. But the pressure to reduce dependence on Russian gas as quickly as possible has greatly increased the demand for hydrogen. “Since the beginning of this year, there has been an additional dynamic”says Nils Aldag, CEO of Sunfire, “Hydrogen is becoming one of the most exciting energy markets of all.”

The Dresden-based company builds electrolysers – i.e. systems that generate hydrogen by electrolysis – and is banking on a booming market: Many sectors such as steel, chemical and cement producers are relying on hydrogen on the way to climate neutrality. Global hydrogen demand is estimated to grow from 71 to 88 megatons (Mt) between 2019 and 2030 and double to 137 Mt by 2040. In Germany alone, demand could increase to 3.3 Mt by 2030.

Aldag founded Sunfire in 2010 together with Carl Berninghausen and Christian von Olshausen, at a time when investors were hardly interested in hydrogen either: “At that time it was an absolute catastrophe to come up with the subject of hydrogen and with an investment-intensive business. At the time it was also unclear how the margins would develop”says Aldag.

Electrolysis plant for RWE

Twelve years later, it seems clear that Aldag and its co-founders were right. Few companies have the necessary know-how to manufacture electrolysers on an industrial scale. Sunfire is owned by Aldag “definitely among the top five electrolysis manufacturers in the world”. The company employs 370 people in Dresden and at two other locations in Germany and Switzerland. It was commissioned by the energy group RWE to supply an electrolysis plant for green hydrogen, i.e. hydrogen produced with renewable energies. In 2022, the company received EUR 195 million in a financing round from investors such as Copenhagen Infrastructure Partners and Lightrock. “In terms of the number of employees, incoming orders and financing, we can compare ourselves to the electrolysis department at Thyssenkrupp or Siemens”says the manager.

Nils Aldag finds the goals of German and European politics for progress with hydrogen “extremely demanding”: “If we could start tomorrow morning, the goal would actually be achievable”, he says. The manufacturers stand “in the starting blocks” and wanted to invest in production capacities and personnel. However, it is “just about goals and not yet about real demand”, says Aldag. In order to be able to leave the prototype phase, it needs it “competent people in large numbers”. “If the real demand does not come at some point and the political support does not increase even more, it will definitely be tight in time to achieve the goals”says the Sunfire CEO.

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