Electrolyser manufacturer ITM Power has secured a £38 million investment from chemicals giant Linde, which will take a 20 per cent stake in the startup.
The two firms have also formed a new 50:50 joint venture to deliver industrial projects with an electrolyser capacity of 10MW and above.
ITM Power is seeking to raise at least £52 million to fund its ambitions to scale up hydrogen production and bring down the cost of electrolysis.
The money will be used to enhance its manufacturing capabilities, in particular for large-scale 5MW electrolyers, as well as standardise its products, deliver a backlog of contracted projects and find new ones to add to the pipeline. It will also cover the firm’s initial contribution to the joint venture with Linde.
In total, ITM Power is planning to issue up to £58.8 million of new shares at a price of 40 pence each. Although the lion’s share will go to Linde, the company also expects to issue £14 million of new shares to a selected group of new and existing investors and make an open offer to all existing investors for up to £6.8 million worth.
ITM Power chief executive Graham Cooley said: “The joint venture will enable us to focus on our core competency of the development and sale of electrolysers, and with Linde as our partner to deliver green hydrogen at scale. The successful fundraising provides the financial resources to exploit this exciting opportunity to the full.
He continued: “We are seeing increasing global demand for hydrogen as a solution to renewable energy storage needs and the decarbonisation of major industrial processes.
“The fundraising and our partnership with Linde will help us to meet this demand on a growing scale, deliver efficiencies throughout our supply chain and represents a significant step on our pathway to medium-term profitability”
Speaking to Utility Week in June, Cooley claimed that electrolysis powered by renewables will be able to deliver low-carbon hydrogen at price of just £48/MWh by 2030.
This compares to an expected cost of £53/MWh to extract hydrogen from methane and capture the resulting emissions as envisioned by Northern Gas Networks as part of its proposals for a hydrogen gas grid across the north of England.