Clean fuel firm ITM Power (LSE:ITM) rose 3.5pc to 26.5p a share on Friday after a UK government report highlighted the potential for hydrogen to play a vital role in reducing emissions over the next 30 years. The release by the Committee on Climate Change – established to advise the government on emission targets – states that the UK can end its contribution to global warming within 30 years. To do this, it has set an ambitious new goal to reduce British gas emissions to zero by 2050.
The independent body said that hydrogen would play an essential part in meeting these targets, predicting that between 6 GW and 17 GW of electrolyser capacity will be required in the UK by 2050. This implies an average build rate of up to 567MW of electrolysis per annum for 30 years.
‘The difference in the role for hydrogen in our Core scenario (that would broadly deliver the UK’s existing emissions targets) and our Further Ambition scenario (required for a net-zero emission target) is striking,’ the report added. ‘Low-carbon hydrogen moves from being a useful option to a key enabler. Updates to policy alongside adoption of our recommended target should reflect that.’
The report also covers numerous further ways that hydrogen can reduce emissions such as heating and cooking, industrial use, use in fuel cell electric vehicle, and ports and agriculture.
The support of hydrogen’s use as a clean fuel source provides a significant vote of confidence for ITM, which makes integrated hydrogen energy solutions for grid balancing and energy storage. It also produces green hydrogen for transport, renewable heat and chemicals.
ITM has taken significant steps forward with its offering over recent years, signing a notable forecourt siting agreement with Shell for hydrogen refuelling stations in September 2015. It then agreed on a deal to deploy a 10MW electrolyser at Shell’s Rhineland refinery.
Following this, the company entered into a strategic partnership agreement with Sumitomo Corporation in July 2018 for the development of multi-megawatt projects in Japan. It also has relationships with customers and partners like National Grid, Cadent, Northern Gas Networks, RWE, Engie, BOC Linde, Toyota, Honda, Hyundai, and Anglo American.
Speaking on Friday, ITM’s chief executive Graham Colley said the business welcomed the findings of the report: ‘We have the experience and capability to help deliver the UK’s carbon reduction targets,’ he added. ‘Our products in energy storage, industry and transportation sectors are already delivering benefits to forward-thinking customers in the UK and in many other parts of the world.’