ITM Power: Great British Energy’s £40M Entry and a MSCI Mandate Shift the Hydrogen Story from Hype to Infrastructure

Great British Energy's £40M stake and MSCI Small Cap Index entry reshape ITM Power's shareholder base, while awards and a NATO defense deal boost credibility.

The transformation of ITM Power from a speculative hydrogen play into a state-backed industrial proposition has accelerated over the past month. Great British Energy’s £40 million investment, which handed the government body a 10.8% stake and made it the company’s second-largest shareholder, is more than a cash injection — it is a political endorsement of Britain’s domestic electrolyser capability. That signal was amplified when ITM joined the MSCI United Kingdom Small Cap Index at the end of May, forcing passive fund managers to load up on shares and sending trading volumes to 27.6 million on the final day of the month alone.

The combination of state capital and index mechanics has reshaped the shareholder base. Institutional investors that previously avoided the hydrogen space are now compelled to take a position, while retail traders remain enthusiastic: on Interactive Investor, 68% of orders in ITM were buys, placing the stock among the ten most active names alongside easyJet, Aviva, Glencore and Rolls-Royce Holdings. The shares closed at €2.03 on Wednesday, trimming the week’s loss to 16.99% but leaving the year-to-date gain at a staggering 180.08%. Even after the pullback, the stock sits more than 200% above its 52-week low of €0.65.

Awards and defence deals add credibility

Beyond the financial manoeuvres, ITM’s technology is collecting external validation. REFHYNE 2, a 100-megawatt PEM electrolyser at Shell’s Energy and Chemicals Park Rheinland, won two categories at the World Hydrogen Awards: “Clean Hydrogen Project” and “Industrial Application”. From 2027, the facility is expected to produce up to 44,000 kilograms of green hydrogen daily, with part of the output decarbonising fuel production at Shell’s Wesseling refinery. For ITM, the prize matters less as a marketing trophy than as evidence that its systems can operate at industrial scale — a prerequisite for securing future contracts in a market where trust is built on delivered megawatts.

Meanwhile, a partnership with Rheinmetall opens a new channel outside traditional energy and industrial customers. The two companies are working together on the Giga-PtX project, which aims to build a European network of decentralised synthetic fuel plants for NATO armed forces. Each plant will offer up to 50 megawatts of electrolysis capacity and produce 5,000 to 7,000 tonnes of e-fuel per year. The initial focus is the UK. The logic is straightforward: defence applications — where supply security, storability and operational flexibility trump pure efficiency — cannot always be electrified. Synthetic fuels fill that gap.

Three operational hurdles define June

The rally has been driven by expectation, but the next few weeks will test whether that expectation can harden into revenue and margin. Three binary milestones are lined up, starting with Chronos. ITM is due to take a final investment decision in June on a fully automated stack production line in Sheffield with an annual capacity of one gigawatt. Each Chronos unit will deliver 2 megawatts of output, double the power density of current designs to 2.5 MW per square metre, and the company promises 40% lower capital costs and a halved footprint. Production is slated for 2028. A related state grant of £46.5 million from the UK energy ministry has already been earmarked to support the line.

Second is the British hydrogen allocation round HAR2. Twenty-seven projects made the shortlist, among them Uniper’s Humber H2ub, where ITM could supply six Poseidon modules of 20 megawatts each. The round targets 875 megawatts of capacity from applications totalling 2.8 gigawatts. Third is Uniper’s Killingholme project, a 120-megawatt scheme for which the FEED contract was signed in June 2025, planning permission secured in March 2026, and a final investment decision expected in 2026.

Finances improve but profits remain distant

ITM’s financial trajectory is moving in the right direction, though the company is still loss-making. Revenue guidance for the current financial year stands at £40-43 million, representing about 35% growth after the first half delivered £18 million. The adjusted EBITDA loss narrowed to £11.9 million in the first half from £16.8 million a year earlier, and the full-year loss is expected to land between £27 million and £29 million. The order book has swelled to £152 million, and critically, 71% of contracts are now considered profitable versus just 6% a year ago.

The balance sheet remains a source of comfort: around £200 million in cash and no debt, leading analysts to believe ITM will not need to raise additional capital this decade. That cash cushion, combined with the government’s direct stake, gives the company time to execute.

Morgan Stanley recently upgraded its stance, now rating the stock “Overweight” with a 170 pence target price and forecasting EBITDA breakeven in the 2028 financial year — provided ITM secures roughly 200 megawatts of new orders. It is the first time since 2021 that the bank has issued a positive rating on a UK hydrogen stock. Other targets vary widely: Jefferies sets 200 pence (“Buy”), Berenberg 110 pence (“Buy”), and UBS just 60 pence (“Neutral”).

ITM Power will report full-year results on 15 September 2026. By then, the decisions on Chronos, HAR2 and Killingholme will either have validated the rally or exposed how much of the 180% gain was built on hope alone.