ITM Power Expands to US Market Amid Inflation Reduction Act Demand

On Oct 16, 2023

TL/DR –

London-listed hydrogen firm ITM Power plans to enter the US market due to the potential offered by the $370bn Inflation Reduction Act (IRA) for green hydrogen production. The company sees the US as a possible major market for electrolysers, devices that use electricity to split water into hydrogen and oxygen, to produce low-emission hydrogen. The IRA, part of President Joe Biden’s plan to curb inflation, provides tax credits for green hydrogen projects and complements a $9.5bn investment for clean hydrogen through the Infrastructure Law.

ITM Power Gears Up to Tap into US Market Amid Green Hydrogen Demand

ITM Power, the London-listed hydrogen firm, is poised to penetrate the US market. The firm sees the US $370billion Inflation Reduction Act as a significant opportunity for green hydrogen production. The company said the US has the potential to be one of the largest markets for electrolysers, which are used to produce low-emission hydrogen by splitting water into hydrogen and oxygen.

According to ITM, a key driver of this opportunity is the $370billion (£304million) Inflation Reduction Act (IRA). The act, part of President Joe Biden’s efforts to curb inflation, includes measures for investing in domestic energy production while advocating clean energy. The IRA provides tax credits for green hydrogen projects, complementing the $9.5billion allocated for clean hydrogen via the Infrastructure Law. Despite being low carbon, green hydrogen remains relatively expensive compared to other renewables such as solar and wind.

The US National Clean Hydrogen Strategy and Roadmap, released in June 2023, expects production of 10 million metric tonnes (MMT) of clean hydrogen annually by 2030, 20 MMT annually by 2040, and 50 MMT annually by 2050. Dennis Schulz, CEO of ITM, conceded the US could become one of the largest markets for green hydrogen, hence providing ITM with an excellent chance to become a leading electrolyser provider as the market grows in the coming years.

ITM Power shares were up by 3.41% to 71.60p in morning trading on Monday. The firm revealed in August that year-to-year pre-tax losses had risen to £94.2million for the year ending 30 April. However, it indicated the losses were within the £85m to £95m guidance. The company’s full-year revenues surpassed the £2million guidance at £5.2million, albeit lower than the £5.6million it recorded last year. The firm anticipates an increase in revenue ‘between £10million and £18million from commercial projects in execution’ for the next financial year.