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ITM Power Plc

ITM Power plc 100MW electrolyser plant designs to be launched at Hannover + Zeus Comments

ITM Power plc (LON:ITM), the energy storage and clean fuel company, has today announced that it will be showcasing a series of large scale electrolyser configurations up to 100MW in size at HANNOVER MESSE 2017. This is in response to utility and oil and gas industry demand for larger scale industrial installations.

The company has sold a number of MW scale plants over the last year and is now responding to enquires for much larger plant for bus and heavy goods vehicle refuelling stations in the 1MW to 10MW range and, increasingly, industrial applications ranging from Power-to-Gas, refineries and steel making in the 10MW to 100MW range.

The modular design of the electrolyser systems enables easy scale up. The use of integrated modules enables a wide customer offering based on the Company’s existing core PEM stack technology. This approach maintains standardisation for manufacture while minimising development and design time when scaling up. The advantages of compact size, fast response time, high operating efficiency and high pressure are maintained. This approach serves the requirements of the current electrolyser market, while providing a route to access growing markets in the multi MW scale.

The designs that will be showcased include the new 2.2MW unit which is at the heart of the 10, 30, 60 and 100MW designs created for this new market demand.

Refinery hydrogen

Refineries currently use hydrogen to improve the quality of fractional distillation products and most of this hydrogen is produced from steam-reforming. About 17% of the total CO2 emissions from the European refinery sector can be attributed to hydrogen production. Emissions from steam reforming natural gas are about 10 tonnes of CO2 per tonne of hydrogen produced, nearly 50% of direct refinery CO2 emissions. The EU Fuel Quality Directive states that fuels in Europe must reduce their carbon emissions by 6% by 2020. Furthermore, The EU Emissions Trading System threshold, will be reduced by 1.74% (based on the 2010 cap) annually. UKPIA has calculated that the total additional costs for UK refineries are up to £75 million/year using an allowance cost of £10.50/t CO2e. If using green hydrogen can cut 50% of direct CO2 emissions, this represents a saving of £37 million/year for UK refineries and small emitters (<25ktCO2e a year) could be allowed to opt out entirely. Refineries need a cost effective solution that reduces carbon emissions, allowing them to comply with stringent legislation and avoid fines, while maintaining output.

Chemical Industry

The chemical industry has traditionally used the reformation of natural gas as a source of hydrogen. However, reformers have start-up times in excess of three hours, leading to unwanted periods of downtime for planned and unplanned maintenance. With their rapid start up times, PEM electrolysers are able to provide an immediate backup solution to prevent production downtime and security of hydrogen supply.

Power-to-gas energy storage

The recent Winter Package of Directive proposals from the EC includes energy storage involving the conversion of electricity to another energy carrier, such as hydrogen. Ongoing work by CEN/CENELEC is investigating hydrogen/methane blends and establishing admissible concentration levels for hydrogen in natural gas grids across Europe. These developments will enable Europe-wide deployment of power-to-gas plant for injecting hydrogen into the gas grid while offering balancing services to the electricity grid.

Steel making

Iron ore requires chemical reduction before being used to produce steel; this is currently achieved through the use of carbon, in the form of coal or coke. When oxidised, this leads to emissions of about 2.2 tonnes of CO2 for each tonne of liquid steel produced, equivalent to 5% of the world’s anthropogenic CO2 emissions. The substitution of hydrogen for carbon has the potential to significantly reduce CO2 emissions, because hydrogen is an excellent reducing agent and produces only water as a by-product. Furthermore, electrolytic oxygen may be injected into furnaces, including electric arc furnaces, to remove impurities, reduce NOx emissions, reduce fuel consumption, and improve flame stability and rates of heat transfer.

Future events

In addition to the HANNOVER MESSE in April, ITM Power will be participating in the following events where it will also be showcasing it larger plant designs: Energy Storage Connected Systems (London), Energy Storage (Paris), International Hydrogen and Fuel Cell Conference (Birmingham), International Renewable Energy Storage Conference (Germany), Utility Live (Birmingham), All-Energy (Glasgow), Energy Storage Canada (Toronto), HFC2017 (Vancouver), Next Generation Energy Storage (USA CA), Energy Storage Association Annual Conference (USA NC), NYBEST Capture the Energy Conference (USA NY), Bloomberg Future of Energy Summit (USA NY).

ITM Power plc CEO, Dr. Graham Cooley, said: “These new plant designs are being launched at the Hannover Messe 2017 in response to a dramatically increased number of enquiries at large scale. These products will make ITM Power uniquely placed to provide solutions to the requirements of these new industrial applications.”


Zeus Capital Comments:

Today’s RNS reach is exciting with regards to the prospects of the company going forward. It has been a trend since the company launched its first suite of products at Hannover several years ago, that market pull has been toward ever larger scale electrolysis applications. ITM has adopted the wise strategy of matching its product offering to that market pull, and this is the continuation of that trend. ‘These new plant designs are being launched at the Hannover Messe in 2017 in response to a dramatically increased number of enquiries at larger scale’, is a quote in today’s release from CEO Graham Cooley. New potential customers looking for higher power solutions include bus and heavy goods vehicle operators looking for hydrogen refueling hardware at the c.10MW scale, and refineries and steel makers looking for reliable and/or low carbon hydrogen sources in the 10MW-100MW range. Prospective projects in the existing power-to-gas (‘P2G’) target market are also moving up into this sort of scale. The trend toward much larger scale installations is of course great news for the company, as it means that a relatively small number of sales and industrial end using partners, will generate a significant amount of revenue for the company. Scale orders will also help get down the cost curve more rapidly. From a macro perspective, it is hard evidence that the mass market for green hydrogen produced by electrolysis is really gaining some major traction. ITM will be showcasing the modular 2.2MW unit at Hannover that sits at the heart of its 10, 30, 60 and 100MW system designs.

The company currently has £19.03m of projects under contract and £2.20m in final negotiation. This gives a total pipeline of c. £21.2m contracted or in final negotiation subject to exchange rate variation. This growing pipeline is evidence of ITM executing its strategy of embedding its technology in its primary target markets of scale renewables storage by power to gas (‘P2G’) and hydrogen fueling infrastructure at this key early stage of market evolution. We also believe, following today’s RNS, that ITM Power Plc will be entering some significant new industrial markets in the near to medium term.

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