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(Sharecast News) - ITM Power said on Monday that its build, own, operate (BOO) subsidiary, Hydropulse, has signed heads of terms with a European oil refinery for a large-scale green hydrogen project.
The project in development comprises 150 MW of ITM Power's Alpha electrolyser platform to produce green hydrogen on site under a 10-year agreement.
The parties are already progressing a joint front end engineering design (FEED) study and are targeting final investment decision (FID) in 2027, with hydrogen production expected to commence in 2029. The project is planned to be built, owned and operated by Hydropulse, generating long-term contracted and recurring revenues for ITM Power.
"Our customer is planned to provide the site and utilities, including power, mitigating Hydropulse's exposure to electricity price volatility," the company said, adding that it's in "constructive" talks with banks on project-level financing to enable it to scale Hydropulse "in a capital-efficient way".
Chief executive Dennis Schulz said: "This is an important milestone for our company. At 150 MW and with a planned 10-year contract duration, this project demonstrates the scale and potential of our BOO model. If progressed to definitive agreements, it would represent our largest commercial commitment to date and establish a material long-term contracted revenue stream for the group."
At 1025 BST, the shares were up 5.3% at 98.80p.
Berenberg, which rates ITM at 'buy' with a 200p price target, said: "This substantial milestone represents potentially the largest commercial commitment in the company's history and is set to be a financial and operational game-changer.
"The Hydropulse model could materially reshape the financial structure of the business, establishing a highly visible, predictable foundation of recurring revenue that could also spearhead future growth."
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