UK electrolyser manufacturer ITM Power has secured a contract to construct a 24MW electrolyser for fertiliser firm Yara in Norway.

The deal has taken the company’s contracted work from 62MW announced during its trading update in December last year to 86MW as of this month. A year ago, the firm had 21MW of contracted sales.

“This 24MW deal is an important project for ITM,” said CEO Graham Cooley on an analyst call. “It is our first large-scale industrial ammonia electrolyser.”

“All over the world we see opportunities” Cooley, ITM

Currently, around 70-75mn t/yr of hydrogen is sold to the industrial sector globally, of which around 50pc goes to ammonia manufacturers.

“Now we have a key reference plant in the ammonia industry,” says Cooley. “Because of the standardisation of this 24MW deployment, it means we can bid more rapidly and understand terms and conditions more rapidly.”

The 24MW electrolyser will be a replica of the one used in the Leuna chemical complex in Germany for industrial gases firm Linde—which will also be responsible for constructing the Yara plant.

Building capacity

Other projects the firm has contracted over the last year include the German Sinewave project, the Refhyne development, and the Whitelee windfarm.

At the end of last year the firm raised £250mn ($335mn) in equity financing to support the expansion of its manufacturing facilities to meet this growing demand.

The firm’s 1GW/yr facility at Bessemer Park in Sheffield was completed in January, and it recently acquired a site for a second factory in nearby Tinsley capable of producing 1.5GW/yr of electrolysers that it hopes to be fully operational by the end of 2023. Construction will start in the second half of this year.

86MW – Contracted pipeline of projects for ITM

A third international facility, expected to have 2.5GW/yr capacity, will bring the firm’s total electrolyser manufacturing capacity to 5GW/yr by the end of 2024. The company already has the cash reserves to finance the two new facilities.

It is evaluating a number of potential locations for the international facility, including Chile, the US, the Middle East and Europe.

Linde—with which ITM has a strategic partnership—already supplies the bulk of the hydrogen to Chile’s refining sector. And having a plant in the South American country would give the firm a base to expand sales into countries in the region. However, no decision has been made yet, according to Cooley.

“All over the world we see opportunities,” he says. “When we hone down on which we see is the best we will be doing a commercial deal.”

Once the 5GW/yr is constructed it will bring £850-900mn/yr of revenue, the firm projects.

Share price

Questioned by an analyst over the c.50pc fall in the firm’s share price over the last year, Cooley says it will not affect the firm’s commercial performance.

“The share price is not of particular interest to our customers. Our reputation in the industry is very strong and our industrial partners are interested in cost structure, performance, manufacturing and strength of balance sheet,” he says. “Nobody is interested in the share price apart from the City.”

Cooley says the outlook for the sector is bright, with green hydrogen systems already starting to compete with blue and even grey hydrogen on price in some parts of the world.

With power-purchase agreements, hydrogen offers the chance of low volatility in a world where fossil fuel prices are becoming increasingly volatile. And increasingly intense carbon pricing regimes are making the fuel even more attractive.

“All the arrows point in the right direction,” says Cooley.

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Author: Tom Young