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Sunfire builds up production in Saxony - with over one hundred million in funding

Federal Minister of Economics and Technology Robert Habeck hands over a grant of over 162 million euros to Sunfire GmbH in Dresden. Electrolysers are soon to be built here.

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Man sieht Robert Habeck in einer Produktionshalle.
Federal Minister of Economics Robert Habeck (l.) in conversation with Sunfire CEO Nils Aldag (r.) at the company's headquarters in Dresden. Photo: SZ/Veit Hengst © SZ/Veit Hengst

From Nora Miethke

The energy turnaround has not failed, as Saxony's Prime Minister Michael Kretschmer repeatedly claimed these days. On the contrary, it is being driven forward from Dresden. To show this, rushed Federal Minister of Economics Robert Habeck went directly to the capital of Saxony on Wednesday after the cabinet meeting in Meseberg. There, together with Saxony's Minister of Economics Martin Dulig a funding decision for around 162 million euros to Sunfire GmbH.

The company wants to establish industrial production of electrolyzers in Saxony, both for pressure alkali and high-temperature technology. Electrolysers are technical devices used to produce hydrogen from renewable electricity in large quantities. Large steel mills and chemical companies, for example, depend on green hydrogen if they want to make the transition to climate-neutral production by 2045.

"We must combine the expansion of renewable energies with industrial value creation. Sunfire is a shining example of this," Habeck emphasized. The company started as a small start-up 13 years ago and is now the leading medium-sized manufacturer of electrolysers, now investing over 255 million euros in a production landscape in Saxony.

30 percent of the funding is provided by the Free State of Saxony. A further production facility for alkaline electrolysers is to be built in North Rhine-Westphalia (NRW), funded with seven million euros. In total, Sunfire is investing around 400 million euros in Saxony and North Rhine-Westphalia, 169 million euros of which will come from subsidies.

Series production for the alkaline electrolysers will be set up at Vitesco Technologies in Limbach-Oberfrohna. "We want to show how competencies from an old technology like automotive engineering can be used to conquer a market with a new technology," emphasized Sunfire CEO Nils Aldag. Auto supplier Vitesco would not say Wednesday whether additional jobs are associated with the manufacturing.

At the company's headquarters in Dresden, the research and development center as well as the prototype production including test hall for both technologies are being built. The number of employees in Dresden, currently 400, is expected to almost double in the coming years.

Top position possible in tough competition

Sunfire is the only German producer of large-scale electrolysers to receive support under the European funding initiative "IPCEI Hydrogen". This supports large-scale projects of outstanding European interest. "Thanks to the grant, we can proceed faster and much more extensively than would be possible with our own funds. IPCEI is our catalyst on the way to gigawatt production," says Aldag, promising: "We will repay the trust that policymakers have placed in us with this extensive funding."

The enthusiastic hobby racing cyclist compares setting up production to a "sprint to the top. By 2030, the EU wants to have installed a green hydrogen capacity of 200 gigawatts in Europe. According to Aldag, that is equivalent to the output of 200 large nuclear power plants.

By way of comparison, Sunfire is now building factories to provide production capacities of 500 megawatts per year (high-temperature technology) and one gigawatt per year (alkali). In the tough competition with the U.S. and China for the international electrolysis market, Germany could make it to the top, the company CEO is convinced. "But in order to seize this opportunity of the century, we need a kick start" - IPCEI funding.

There are good and bad subsidies, Habeck said. Bad subsidies are those that are paid because others do the same. Good subsidies are those that support entrepreneurial daring, he said. "That's the case with Sunfire. They recognized early on that the production of green hydrogen was becoming a new market field," praised the Green politician, who clearly enjoyed the appointment. He also took time for photos with the employees. And Martin Dulig was also pleased: "The hydrogen age continues to pick up speed from Saxony."

The IPCEI process is lengthy and bureaucratic. The projects were already selected in May 2021. In order not to lose any time, the BMWK had already granted Sunfire the early start of measures last summer.

The Dresden-based company then made investments at its own risk - primarily in the field of pressurized alkali technology, which is already being installed at customers such as RWE and Uniper. While Sunfire celebrated the start of series production of this technology as early as March 2023, the next step will be to pick up the pace of industrial production of the innovative high-temperature electrolysers, which achieve particularly high efficiencies.

A pilot plant is located at Salzgitter AG. "80 percent efficiency. That's a world record," enthused CEO Gunnar Groebler a week ago at the TenneT grid summit in Lehrte. The power grid operator is connecting the steel mill in Salzgitter to a 380 KV extra-high voltage line so that the Sunfire electrolyzer can be supplied directly with green electricity.

"We don't want to join in the deindustrialization blues these days. Sunfire stands for German optimism, not German fear," Aldag emphasized. The Federal Minister of Economics smiled with relief and wished as a farewell: "Make something of it, win the mountain stage".

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