H-Power plc (LSE:HPOW) has agreed Heads of Terms with existing customer Protium Green Solutions Limited for the supply of its HY5 decentralised ammonia cracker, marking a further step in the commercial development of its hydrogen production technology.
The proposed agreement covers the supply of a HY5 unit capable of producing up to 500 kilograms of fuel-cell-grade hydrogen per day, allowing Protium to generate hydrogen at or close to the point of demand.
The initial arrangement is expected to run for two years, beginning in the second half of 2027, subject to planning approvals, permitting requirements and the execution of a definitive contract.
The agreement builds on an existing commercial relationship between the companies, including Protium’s previous commitment to purchase 5,000 kilograms of hydrogen produced by H-Power.
HY5 Agreement Establishes New Product Revenue Opportunity
The Heads of Terms establish a framework for H-Power to supply its HY5 ammonia-cracking technology directly to Protium.
Under the proposed arrangement, H-Power will provide the HY5 unit together with installation, commissioning, staff training and ongoing engineering support.
Protium will be responsible for operating the equipment.
The agreement represents a potential additional revenue stream for H-Power, alongside its existing LC30 product sales and hydrogen supply activities.
H-Power said the HY5 arrangement supports its strategy of moving from technology development towards supplying commercial products and services.
The initial deployment is expected to commence during the second half of 2027 and continue for two years.
However, the companies must still complete a definitive agreement and obtain the necessary planning and permitting approvals before deployment can proceed.
Financial terms, including the proposed contract value, have not been disclosed.
Protium Expands Existing Hydrogen Supply Relationship
The proposed HY5 supply arrangement follows an earlier agreement between H-Power and Protium announced in June 2026.
Under that agreement, Protium committed to purchasing 5,000 kilograms of fuel-cell-grade green hydrogen produced from cracked ammonia at H-Power’s Dunsfold facility.
The companies also established a virtual hydrogen depot at Dunsfold, enabling Protium to collect hydrogen produced by H-Power and distribute it through its own network.
The latest agreement would extend the relationship from purchasing and distributing hydrogen to deploying H-Power’s ammonia-cracking equipment directly within Protium’s operations.
This would allow Protium to access H-Power’s proprietary reactor technology while taking responsibility for operating the HY5 unit.
The arrangement could also provide a basis for further equipment supply agreements between the companies.
HY5 Designed to Produce Up to 500kg of Hydrogen Daily
H-Power’s HY5 system uses proprietary ammonia-cracking reactor technology to convert ammonia into hydrogen.
The unit is designed to produce up to 500 kilograms of fuel-cell-grade hydrogen per day.
By locating production equipment close to hydrogen demand, the technology aims to reduce the logistical requirements associated with transporting and storing hydrogen over longer distances.
The decentralised approach is intended to provide an alternative to conventional hydrogen supply arrangements that depend on production at centralised facilities.
H-Power said the proposed deployment demonstrates the potential to produce cost-competitive hydrogen without government subsidy.
The company has not disclosed the expected production costs, utilisation levels or financial performance of the proposed Protium installation.
Agreement Provides Framework for Further HY5 Deployments
The Heads of Terms also establish a framework for potential additional HY5 installations at other Protium sites.
Any expansion would depend on customer demand, further commercial negotiations and the relevant approvals.
The companies have not committed to additional units beyond the initial proposed deployment.
H-Power intends to use the agreement to develop its HY5 product supply business alongside existing revenue generated from hydrogen sales and LC30 equipment.
The arrangement could provide an opportunity to demonstrate the HY5 system in a customer-operated environment, although the initial installation remains subject to final contractual and regulatory conditions.
H-Power Management Highlights Commercial Strategy
H-Power Chief Executive Officer John Wilson said the agreement reflects the company’s transition towards a more commercially focused operating model.
“This agreement is another important milestone in the reset of H-Power from a technology-led business into a commercially focused products company.
“We now have LC30 product sales and hydrogen sales underway, and this agreement establishes the HY5 product revenue route we have set out as another core part of our commercial model.
“Protium is already a commercial customer of H-Power, having committed to purchase 5,000kg of hydrogen produced using our ammonia-cracking technology. The next step in that relationship is to supply the HY5, giving Protium access to our proprietary reactor technology so that hydrogen can be produced closer to where its customers need it.
“This is exactly what the reset of H-Power was designed to achieve: turning our technology into defined products, contracted customer demand and repeatable revenue. The Heads of Terms also provide a framework to develop further HY5 contracts with Protium as demand grows.”
Protium Chief Executive Officer Christopher Jackson also welcomed the proposed expansion of the partnership.
“As a company Protium has always been at the forefront of pioneering technology deployments in the UK hydrogen sector, and today’s announcement further underscores that market leading reputation. We are delighted to share this announcement on how Protium is continuing to develop our partnership with H-Power, and to re-affirm our strong interest in the role that distributed ammonia cracking can play as an additional source of cost competitive, unsubsidised, green hydrogen supply for Protium’s customers.”
H-Power Outlook
The Heads of Terms with Protium represent a potential new commercial opportunity for H-Power’s HY5 ammonia-cracking technology.
The proposed two-year agreement would establish a customer-operated installation capable of producing up to 500 kilograms of hydrogen daily, complementing the company’s existing hydrogen supply relationship with Protium.
The immediate priorities are to finalise the contractual arrangements, secure planning and permitting approvals and prepare for the anticipated deployment in the second half of 2027.
Further HY5 installations at Protium sites remain possible but have not been agreed.
The financial contribution of the proposed arrangement cannot yet be determined because contract pricing and other commercial terms have not been disclosed.
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