ITM Power Locks in £86.5m for Chronos Gigawatt Line, Yet Shares Remain under Pressure from Technicals and Cash Burn

ITM Power receives £46.5M state aid and £40M from Great British Energy for Chronos electrolyser line, but shares drop 47% from May peak amid broader hydrogen sector volatility.

ITM Power has finally received formal confirmation of £46.5 million in state aid for its next-generation Chronos electrolyser manufacturing line in Sheffield, supplemented by a £40 million equity injection from Great British Energy. Chief executive Dennis Schulz hailed the funding clearance as a “decisive step” toward anchoring the company at the heart of the UK hydrogen economy. Yet the share price continues to drift lower, closing at €1.35 on Friday — a 47% retreat from the May peak of €2.58 and barely above the critical 100-day moving average of €1.33.

The £46.5 million grant, awarded by the Department for Energy Security and Net Zero, was first flagged in April but held up by a competition-law review. With that hurdle cleared, work on the Chronos line can begin in earnest. The automated, clean-room production facility is designed to deliver up to one gigawatt of electrolyser stacks annually, building on the manufacturing processes established with the existing Trident line. The expansion is expected to create roughly 400 jobs at the Sheffield site.

Despite the funding certainty, the equity tells a more cautious story. Over the past week alone, ITM Power lost 8.51%, with Friday adding a further 1.95%. Year-to-date, however, the stock still shows a striking 86.77% gain, and it trades 109% above the February low of €0.65. That split between short-term weakness and longer-term strength points to a corrective pullback after a steep rally, rather than a fundamental breakdown.

The technical picture reinforces that narrative. The 14-day relative strength index sits at 42, approaching oversold territory but not yet there. The 50-day moving average of €1.72 lies 21.20% above the current price — a gap that highlights how far and fast the stock has fallen in recent weeks. If the 100-day line at €1.33 fails to hold, the next floor is the 200-day average at €1.07. The annualized 30-day volatility of 106.37% underscores the nervousness that has gripped hydrogen names in this period.

Meanwhile, the broader British energy landscape is shifting in ways that matter for ITM Power’s long-term case. London will scrap the Carbon Price Support from April 2028, leaving the UK Emissions Trading Scheme price — currently set at £49.41 per tonne of CO? equivalent for the trading year starting January 2026 — as the sole carbon cost. The latest AR7 capacity auction locked in a record 14.6 gigawatts of new low-carbon capacity, and natural gas now sets the electricity price only around 60% of the time, down from roughly 90% a few years ago. Such structural moves favour electrolysis technology, which requires cheap, clean power to be viable.

Infrastructure hurdles, however, remain visible. The £60 million Peak Cluster CO? pipeline project has drawn a petition of over 16,000 signatures, with protesters demanding a pause. The government has declined to intervene, citing independent safety reviews, but the controversy illustrates the contentious path for large-scale decarbonisation projects. At the same time, Britain is extending the lives of nuclear plants: Heysham 1 and Hartlepool will run until March 2028, a year longer than planned, while Heysham 2 and Torness will stay online until March 2030. The reliance on baseload nuclear signals that the transition to a hydrogen-led system is likely to be gradual.

On the analyst front, sentiment is split. Berenberg has raised its price target sharply to 200 pence, and Morgan Stanley upgraded the stock recently. Yet not all are convinced. The consensus fair-value anchor has been nudged up to €1.31 from €1.19 after model updates, but that level is still below Friday’s close. The company continues to post negative operating and free cash flows, and while management reports better order quality and encouraging growth prospects, the timeline for converting that pipeline into revenue remains uncertain.

For ITM Power, the next few months will be a test of execution. The Sheffield gigawatt line must be built on schedule, the promised 400 jobs need to materialise, and the order book must start translating into tangible sales. Until that happens, the gap between funding-backed ambition and market scepticism is likely to keep the stock sensitive to every data point — and the €1.33 level will be the first line of defence.