ITM Power talks up deal pipeline in extensive trading update

Energy storage and clean fuel company ITM Power updated the market on its trading and operations for the period since the announcement of its successful placing and open offer on 29 September on Thursday.

The AIM-traded company said it was maintaining its focus on increasing commercial sales, and currently had £20.2m of projects under contract, and a further £22.4m of contracts in the final stages of negotiation.

It said the total of £42.6m was an increase of £5.9m in the two months since the placing and open offer announcement.

“ITM Power continues to process its current order book,” the board said in its statement, adding that it had 12 units within its manufacturing facility in Sheffield at present which were either in build, undergoing factory acceptance testing or ready for shipment.

“An additional five units are being commissioned in the field ahead of coming online.

“Altogether, these 17 units constitute over 5MW of installed capacity, [and] the production plan starting in 2018 already exceeds 15MW of capacity.”

In line with ITM Power’s growth strategy and manufacturing plans, the board said the order backlog and opportunity pipeline demonstrated a “clear trend” towards bigger unit sizes and larger scale industrial applications.

“The backlog is also reflective of the company's focus on commercial sales and shift away from its previous reliance on grant income.

“In order to accommodate the increased numbers and size of units in production, heads of terms are being negotiated for a relocation to a larger facility which will accommodate all functions of the company.”

On its power-to-gas and energy storage operations, ITM Power said the National Grid HyDeploy project was “well underway”, with “excellent progress” made across the programme.

It said the HyDeploy project was seeking to address a key issue for the UK, in reducing the carbon footprint as a result of heating homes.

“The UK has a world-class gas grid delivering heat conveniently and safely to over 83% of homes.

“Emissions could be reduced by lowering the carbon content of gas through blending with hydrogen,” the board explained.

“HyDeploy is a Network Innovation Competition-funded project which aims to establish the level of hydrogen that can be safely blended with natural gas for transport and use in the UK gas network.”

ITM Power said it had started work examining the potential deployment of large-scale power-to-gas energy storage within the boundaries of the Northern Gas Networks gas distribution system.

The work, funded by the Department for Business, Energy and Industrial Strategy as part of the Energy Storage Feasibility Study Competition launched in January, would be completed in the first quarter of 2018.

BEIS was also undertaking a £25m project to explore the potential use of hydrogen gas for heating UK homes and businesses.

The project would run from 2017 to 2021, and would aim to define a hydrogen quality standard, and to explore, develop and test domestic and commercial hydrogen appliances.

On the deployment of hydrogen refuelling stations, ITM Power confirmed it now had a total portfolio today of 12 funded refuelling stations which it owns.

Five stations are open to the public at Riverside in the US, AMP in Rotherham, NPL in London, CEME in London and Cobham in London.

A further five stations were under construction in Birmingham, Orkney, Beaconsfield, Gatwick and Swindon.

ITM Power said a further two stations also had Fuel Cells and Hydrogen Joint Undertaking funding under the H2ME2 scheme.

The UK refuelling network had been financially supported by Innovate UK, the Office for Low Emission Vehicles (OLEV) and the FCH JU.

“Planning permission has been granted for car and bus HRS at 19 sites in total with 14 different planning departments across the UK,” the board confirmed.

“Business development activities in the clean fuel area are now focussed on return-to-base commercial vehicles including buses, trains, trucks and shipping.

“ITM Power has entered into 17 hydrogen fuel supply contracts for refuelling fuel cell electric vehicles.”

Looking at the industry as a whole, ITM Power noted that on 13 November the Hydrogen Council published a “first-of-a kind study” detailing hydrogen's potential to be a “key pillar” of the energy transition.

It said the study concluded that, when deployed at scale, hydrogen could account for almost one-fifth of total final energy consumed by 2050.

“This would reduce annual CO2 emissions by roughly six gigatons compared to today's levels, and contribute roughly 20% of the abatement required to limit global warming to two degrees Celsius.”

On the subject of its marketing efforts, ITM Power said they had been focused on engagement with multi-national companies which operate within the energy and transport sectors.

In addition, and apparently increasingly by invitation, the company was attending and presenting at industry specific trade fairs and conferences in the UK, mainland Europe and the United States.

“Our strong pipeline growth reflects the hydrogen and energy storage markets' rapid growth worldwide and ITM's focus on commercial sales,” said ITM Power CEO Graham Cooley.

“We have larger systems, compliant to operate all over the world, placing ITM Power in a great market position.

“This is a very exciting time for the energy industry, and ITM Power is at the forefront of a market which will revolutionise air quality and energy storage for future generations.”