ITM gets £86m from UK government to boost hydrogen sector

British electrolyser manufacturer ITM Power is to get £86 million from the UK government in a move designed to boost the country’s green hydrogen sector.

Great British Energy, the UK’s publicly-owned company set up by Kier Starmer's government last year, today (Thursday) revealed it is giving ITM £40 million – its biggest investment yet in homegrown clean power.

And Energy Secretary Ed Miliband’s Department for Energy Security and Net Zero has also agreed in principle to provide a £46.5 million grant.

The money will be used to deliver a major expansion of hydrogen technology manufacturing at ITM’s base in Sheffield, Yorkshire. Some 400 new jobs will be created plus a 1GW expansion of the site’s output.

Industrial jobs

Sheffield, once one of the world’s great steelmaking cities, has seen a resurgence in recent years thanks to technology companies like ITM choosing to locate there.

Miliband said: “Communities have long been calling out for a new generation of good industrial jobs, and with these plans we answer that call, helping to create an economy in which there is no need to leave your hometown just to find a decent job.”

And UK Chancellor Rachel Reeves said: “Sheffield was the backbone of Britain’s industrial revolution and today shows our commitment to it being at the forefront of the industries that will shape our future.”

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I visited ITM’s headquarters last year and even then the company had ambitious expansion plans and was building new premises. The news from GB Energy now turbocharges that ambition.

GB Energy’s chief executive Dan McGrail said the investment “is backing British innovation, technology and hundreds of skilled jobs. We are investing in ITM helping them to scale, compete globally and keep vital engineering expertise here in the UK.”

The investment comes from GB Energy’s £1 billion Energy Engineered in the UK programme, which was unveiled in December and is designed to create jobs and unlock economic opportunities by investing in UK clean energy supply chains.

Sovereignty and resilience

Great British Energy will now hold a stake in ITM, which saw its shares surge on the back announcement.

ITM chief executive Dennis Schulz said he was “grateful for the confidence and support demonstrated by the UK government. Clean power increasingly underpins energy sovereignty and resilience, which are critical to long-term economic success.”

Indeed, the current conflict in the Middle East has focused minds in Britain on the need to stimulate a supply chain of homegrown energy, and GB Energy wants that supply chain to come from clean energy to, as it puts it, “get off the fossil fuel rollercoaster”.

Schulz added: “The UK government’s support, through a combination of equity participation and grant funding, marks a pivotal step in establishing ITM at the centre of the UK’s hydrogen economy and firmly positions us as a natural partner for projects in the UK.”

Industrial legacy

Clare Jackson, chief executive of Hydrogen UK, said investment in ITM was “a hugely significant announcement for South Yorkshire and for the UK hydrogen sector as a whole. Great British Energy’s investment shows how South Yorkshire’s industrial legacy can be carried forward into the industries of the future.

"The fact that this project will bring over 400 skilled jobs and support growth across the supply chain also demonstrates the real economic opportunity hydrogen can offer regions with deep engineering and manufacturing strengths."

Jackson added that it was also "an important moment for hydrogen at a national level. GBE’s decision to back the expansion of ITM Power’s Bessemer Park facility is a clear sign that hydrogen manufacturing has a vital role in the UK’s industrial future". 

"By supporting electrolyser scale-up in the UK, this investment will strengthen domestic supply chains, accelerate the deployment of hydrogen in hard-to-electrify sectors and crucially, help the UK compete in a rapidly changing and competitive global market.”