ITM Power (LSE:ITM) has announced that its Hydropulse subsidiary has signed Heads of Terms with a European oil refinery for a proposed 150 MW green hydrogen production facility, with the project expected to operate under a 10-year agreement.
The proposed development will use ITM Power’s Alpha electrolyser technology and follow Hydropulse’s build-own-operate (BOO) business model. Under the arrangement, Hydropulse would be responsible for constructing, owning and operating the hydrogen production facility, supplying hydrogen to the refinery under a long-term commercial agreement.
The project is targeting a final investment decision in 2027, with hydrogen production expected to begin in 2029, subject to the necessary development and investment approvals.
According to ITM Power, the refinery will provide electricity and utilities required for hydrogen production. This arrangement is intended to reduce Hydropulse’s exposure to fluctuations in electricity prices while supporting contracted revenue generation over the proposed operating period.
Management described the agreement as the company’s largest potential commercial commitment to date, based on the planned capacity of the facility and the proposed contractual arrangements.
The signing of Heads of Terms represents an initial stage in the project’s commercial development, with final agreements and investment decisions still to be completed.
ITM Power said joint front-end engineering and design (FEED) activities are already progressing with the refinery customer. These studies will support the technical development of the proposed facility ahead of the targeted final investment decision.
Hydropulse is also holding discussions with banks regarding potential project-level financing. The company is evaluating funding arrangements intended to support construction and operation of the facility under its BOO model.
The proposed 150 MW development forms part of ITM Power’s strategy to expand its involvement in hydrogen production and supply, alongside its existing electrolyser manufacturing business.
Through Hydropulse, the group aims to establish long-term hydrogen supply agreements with industrial customers seeking to reduce emissions from their operations.
The refinery project remains subject to further development, financing arrangements and a final investment decision before construction and commercial hydrogen production can proceed.
About ITM Power plc
ITM Power plc is a UK-headquartered developer and manufacturer of proton exchange membrane (PEM) electrolyser technology used to produce green hydrogen from electricity and water.
The AIM-listed company supplies industrial-scale hydrogen production equipment to customers in the energy and industrial sectors, including its standardised Alpha electrolyser platform.
Through its Hydropulse subsidiary, ITM Power also operates a build-own-operate business model under which it develops, owns and manages hydrogen production facilities and supplies hydrogen directly to industrial customers.
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