The market’s confidence in the future of green hydrogen has been clearly demonstrated by the fact that the world’s leading electrolyser manufacturer, ITM Power, is now valued at £3.16bn ($4.3bn), despite only bringing in revenue of £200,000 in the six months to 31 October 2020.

The half-year financial results, published last Thursday, briefly hit the UK company’s share price — driving it from an all-time high of £717 last Tuesday to £$513, but the stocks rebounded to £608 by the close of play. Two years ago, ITM’s shares were valued at £21.65.

ITM pointed out that its revenues had fallen by 92% year on year to £200,000 due to Covid-related delays to final installation of projects. But it had also received income from grants worth £4.2m, meaning that its total income actually grew by 16% compared to H1 2019.

The manufacturer — which opened the world’s first gigawatt-scale factory at Bessemer Park, Sheffield, earlier this year — also pointed out that it had attracted £172m in investment capital during H1 2020.

Chief executive Graham Cooley recently told Recharge last month that this was enough money to build a second 1GW electrolyser facility.

Of course, stock markets do not value companies according to their revenue, but according to their perceived future value.

Goldman Sachs predicts that the European electrolyser market is expected to grow by a factor of more than 650 by 2030, based on the EU Hydrogen Strategy, which calls for 40GW installed by the end of the decade. And by 2050, the market will have grown by a factor of 8,000.

ITM owns the world’s largest electrolyser factory (1GW), which Cooley told Recharge will cut the cost of its equipment by almost 40%, due to economies of scale and increased automation.

According to its half-year results, the company currently has a £36m backlog of contracts (compared to £16m the year before) and £88m in advanced stages of negotiation or subject to preferred supplier status (up from £26m). It also has a total tender pipeline of more than £434m, of which £284m belongs to its own development projects.

The company has a project-development partnership with Italian gas distributor Snam for an initial 100MW, as well as an ambitious joint venture with industrial gases giant Linde.

The results also point to ITM’s under-construction 10MW Refhyne project at a Shell refinery in Germany, and its collaboration with Orsted and Siemens Gamesa on their Oyster offshore wind/green hydrogen project.

In total, ITM recorded an adjusted Ebitda loss of £10.4m for the six-month period, but that it now had cash reserves of £187m.

“We are very well place… to respond to the rapidly scaling market for larger electrolyser systems,” Cooley said in a statement. “The continuing, accelerated development of the Gigastack product — the next-generation stack platform — enables the Company to compete at all scales, but particularly at the largest scale to meet the demand of national recovery strategies that are placing hydrogen at the centre of economic recovery.”

He pointed out that many countries — as well as the EU — published multi-gigawatt national hydrogen strategies in the past year.

“ITM Power, with its joint venture ITM Linde Electrolysis GmbH, is uniquely positioned to deliver on this opportunity, with the ability to scale up production at Bessemer Park and EPC [engineering, procurement and construction] delivery through Linde.

“This will be reflected in delivered orders, and consequently revenues, in the coming periods… We have the building blocks in place to make the most of the opportunities presented by global decarbonisation.”

Technology

Green hydrogen: top electrolyser maker ITM valued at $4.3bn despite six-figure revenues