State Backing Fuels ITM Power’s Gigawatt Factory Ambitions – But Investors Stay on the Sidelines

UK government backs ITM Power with grant and equity for gigawatt-scale Chronos electrolyser line, boosting order book profitability and South Yorkshire jobs.

The British government is placing a hefty bet on domestic hydrogen manufacturing. ITM Power, the Sheffield-based electrolyser specialist, has clinched an £86.5 million funding package that will bankroll a fully automated production line for its next-generation “Chronos” stacks. Half of that sum comes as a straight grant from the Department for Energy Security and Net Zero (DESNZ), formally approved on 9 July, while the remaining £40 million arrives as an equity injection from Great British Energy, the state-owned investment vehicle that now becomes a direct shareholder in the company.

A Factory Built for Scale

The money is earmarked for a new high-throughput line at ITM’s existing Bessemer Park site in Sheffield. The centrepiece is the Chronos platform, which slashes the number of components in each stack by half while doubling power density to 2.5 MW per square metre. Chief executive Dennis Schulz describes the project as a “decisive moment” for the UK’s hydrogen economy, likening Sheffield’s potential future role to its historic status as a steelmaking powerhouse. Energy minister Ed Miliband has welcomed the roughly 400 jobs the factory will bring to South Yorkshire.

The new line is designed to reach an annual capacity of one gigawatt by 2028. Crucially, ITM says it is building on processes already proven on its Trident line, which management argues lowers execution risk and should speed up the ramp to industrial-scale output. The facility will include clean-room environments, modular test systems and specialist equipment for electrode welding and catalyst-coated membrane production.

A Growing Order Book – and a Shift in Profitability

Those production slots are already being filled. Confirmed orders that will draw on Chronos technology include a 120 MW contract with Uniper, a 20 MW deal with MorGen Energy, and 15 MW for the Cromarty project alongside partner Protium. Separately, ITM is also supplying a 200 MW plant in Lingen, Germany, for RWE – a sign that its standardised ALPHA 50 and Neptune V systems are gaining traction among large-scale project developers.

More telling, perhaps, is the improvement in contract quality. Of the £152 million in the company’s order book, roughly 71% are now considered profitable – a sharp departure from the loss-making legacy projects that weighed on the balance sheet in previous years. ITM recently lifted its revenue guidance for the current financial year to £40-43 million, citing better project execution. Before the latest cash injection, the company had forecast a year-end cash balance of £170-175 million; the new funding adds considerably to that cushion.

Market Reaction: A Short-lived Rally

Despite the industrial and financial milestones, the stock has failed to hold its gains. The London-listed shares opened more than 9% higher on the day of the announcement but subsequently drifted lower. At the time of writing, the stock trades at around €1.35, still well above February’s low of €0.65 but a far cry from the 52-week high of €2.58 set in late May. On a year-to-date basis the equity has risen by roughly 86%, a number that underscores the extreme volatility in the name – annualised 30-day volatility currently stands at 106%.

Technical indicators offer a mixed picture. The shares sit about 22% below their 50-day moving average of €1.72 but remain 25% above the 200-day line of €1.07. Analysts at AllMind AI view the funding as a welcome relief for the balance sheet, improving liquidity without directly signalling a surge in market demand. The company continues to post operating losses, though its debt load remains low.

A Contrast in Industrial Policy

The timing of the British government’s commitment is notable against the wider European backdrop. While London pushes ahead with domestic electrolyser production, the European Commission has slashed the budget for the fourth auction round of the European Hydrogen Bank to €500 million – a 61.5% cut from the previous round. That divergence may give UK-based manufacturers like ITM Power a near-term advantage in their home market, even as the broader industry wrestles with uncertain demand signals.

For now, all eyes are on the Sheffield production line and the path toward that 2028 capacity target. The technical and financial foundations are in place; the next set of quarterly results will indicate whether the improved order quality and stronger balance sheet can translate into sustained commercial momentum.