HNO International, Element One Energy and Pneumatic and Hydraulic Company have agreed to build a green hydrogen plant in Houston together. It is small: one 1.25 MW electrolyzer making 500 kg of hydrogen a day. The plan is not. The partners describe a platform that can grow to ten times that output, and they set a completion date only a few months out.
Key takeaways
- HNO International, Element One Energy and Pneumatic and Hydraulic Company announced on 6 February 2024 a partnership to develop a 500 kg per day green hydrogen production facility in Houston, Texas.
- The Houston hydrogen facility will run a single 1.25 MW electrolyzer using HNO International's Scalable Hydrogen Energy Platform (SHEP), which the company says can expand to 5,000 kg of hydrogen per day with a 20-year lifespan.
- The partners anticipated completing the Houston facility in the second quarter of 2024, yet Leap's project record for the HNO SHEP project still lists it at the early stage with no operational date.
- No deal value was disclosed for the HNO International partnership, and the facility and any further installations come with an optional revenue sharing system.
- Enerdatics records 32 US hydrogen M&A and joint venture transactions across 2023 and 2024, and none of the 17 joint ventures among them carries a disclosed value.
How does a modular electrolyzer platform change the economics of a small plant?
It turns the first plant into a showroom rather than a destination. An electrolyzer splits water into hydrogen and oxygen using electricity, and most hydrogen projects are sized once, financed once and built once. HNO International's pitch is different. SHEP is a packaged system that produces, stores and dispenses hydrogen, and it is designed to have more electrolyzers bolted on as demand appears.
That is why the Houston plant can be modest. Its job is to prove the package works at 500 kg a day, so that the partners can sell the next installation and the one after it. The company says the platform can scale to 5,000 kg a day, a tenfold increase on the same design, and that the plant will be able to serve a range of industrial and commercial users once extra electrolyzers and components are added.
The footprint matters to that argument. SHEP needs less than 3,000 square feet. A system that fits on a small industrial lot can be placed close to the customer, which avoids the cost of moving hydrogen by truck or pipeline.
Power source is the other lever. The partners say the plant can draw on grid electricity or renewable power, including a fully off-grid option. Hydrogen is only "green" when the electricity behind it is renewable, so the colour of the output depends on choices not yet made public.
What does each partner bring to the Houston facility?
Each partner covers a different part of the hydrogen chain, which is the logic of the arrangement. HNO International supplies the platform itself, the integrated system that ties production, storage and dispensing together.
Element One Energy designs and manufactures electrolyzers and solid-state hydrogen storage systems. Its stated focus is what it calls Ultra Low-Cost Green Hydrogen, production and storage built to bring the cost of green hydrogen down. Solid-state storage holds hydrogen inside a material rather than as a compressed gas or a cryogenic liquid, which can reduce the pressure and safety burden on a small site.
Pneumatic and Hydraulic Company brings experience in fluid power and high-pressure systems. That covers the less glamorous steps of creating, compressing and distributing hydrogen once it leaves the electrolyzer. For a plant that also dispenses fuel, those steps are where much of the engineering risk sits.
Leap records the partnership as a joint venture with no buyer, no seller and no disclosed value. The optional revenue sharing system attached to this and future installations suggests the partners expect to earn from output over time, not from a single sale of equipment.
Why does the 2024 completion date matter now?
Because it has not been met on the record. At announcement, the partners anticipated completion in the second quarter of 2024. Leap's project record for the HNO SHEP project lists it as early stage, with no operational date and no disclosed investment.
That gap is the most useful fact in the story for anyone tracking small-scale hydrogen. A plant that needed only one 1.25 MW electrolyzer and a site of under 3,000 square feet was presented as months away. If a project of that size has not reached operation on the record, the bottleneck is unlikely to be the size of the build. It is more likely to sit in demand, permitting, power supply or financing, the parts of a hydrogen project that do not shrink when the electrolyzer does. Until the first plant operates, the 5,000 kg figure describes a design capacity, not a pipeline.
Enerdatics records 32 US hydrogen transactions across 2023 and 2024, of which 17 are joint ventures like this one. None of those joint ventures carries a disclosed value, and none of the 32 transactions carries a megawatt figure in Leap. Disclosed values appear only on corporate and asset deals, totalling $764.5 million, and they are dominated by company funding rounds such as Electric Hydrogen's $380 million raise. Activity also fell sharply: 26 of the 32 deals were announced in 2023 and only six in 2024. The HNO International partnership is one of just two US hydrogen joint ventures Leap records for 2024.
What does the deal signal for US hydrogen?
It signals a split between two very different kinds of hydrogen project. At one end sit the large Gulf Coast schemes backed by oil majors and foreign energy groups. Leap records ADNOC agreeing to take a 35 percent stake in ExxonMobil's Baytown blue hydrogen and ammonia project in September 2024, with Mitsubishi Corporation also agreeing to take a stake the same month. Earlier, ENEOS invested in MVCE Gulf Coast, a hydrogen and ammonia developer. These are export and industrial plays measured in large volumes.
At the other end sit modular plants like HNO International's, where the selling point is speed and placement rather than scale. The comparison is stark. Plug Power's agreement to take 25 percent of Fortescue's 80 MW Phoenix hydrogen plant describes a project 64 times the size of the Houston electrolyzer. Storage-led schemes such as Chevron's 78 percent stake in ACES Delta sit in a different category again.
The fall in deal count from 2023 to 2024 suggests the middle of the market is thinning. Large projects with anchor capital continue, and small partnerships continue because they are cheap to announce. What is harder to find is the step between them, where a modular platform proves it can sell repeat installations. The Houston plant was meant to be that proof. Its status on the record shows how long that step can take.
Frequently asked questions
What is the HNO SHEP project? It is a planned green hydrogen production facility in Houston, Texas, using HNO International's Scalable Hydrogen Energy Platform. It is designed to produce 500 kg of hydrogen a day from a single 1.25 MW electrolyzer.
Who are the partners in the Houston hydrogen facility? HNO International, Element One Energy and Pneumatic and Hydraulic Company. HNO supplies the platform, Element One brings electrolyzer and solid-state storage expertise, and Pneumatic and Hydraulic Company brings high-pressure and fluid power systems.
Has the HNO hydrogen facility started operating? The partners anticipated completion in the second quarter of 2024. Leap's project record still lists the HNO SHEP project as early stage with no operational date.
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