ITM Power, the Sheffield-based electrolyser manufacturer, has moved a step closer to establishing a long-term contracted revenue stream after its build, own and operate subsidiary Hydropulse signed heads of terms for a 150 MW green hydrogen project with a European oil refinery.
The agreement covers the deployment of ITM Power's Alpha electrolyser platform to produce green hydrogen on site under a 10-year supply contract, which the company describes as its largest commercial commitment to date if taken through to definitive agreements.
The two parties are already conducting a joint front-end engineering design (FEED) study, a detailed technical and commercial assessment that precedes a final investment decision (FID), which is targeted for 2027.
Hydrogen production is expected to begin in 2029.
Under the proposed structure, Hydropulse would build, own and operate the facility, generating recurring revenues over the life of the contract.
The refinery customer is expected to provide the site and utilities, including power supply, which ITM Power said would limit Hydropulse's exposure to electricity price volatility, one of the key cost risks for green hydrogen projects.
The company said it is in active discussions with banks over project-level financing to fund the development in a capital-efficient way, allowing Hydropulse to scale without placing excessive demands on the group's own balance sheet.
Chief executive Dennis Schulz said the deal demonstrates the scale and potential of the BOO model and that the company looks forward to progressing the engineering, commercial and financial workstreams toward a final investment decision.
ITM Power has faced a challenging period as the green hydrogen sector has grappled with high costs and slower-than-expected demand growth, making the scale of this project and its contracted structure a notable development for the group.
