The war in Ukraine and soaring natural gas prices have underscored the benefits of switching to “green hydrogen” production as the only “net zero energy” gas, according to British company ITM Power.
The Sheffield-based company, which makes electrolyzers that make hydrogen from water, said the energy crisis had shown hydrogen to be a viable alternative to methane.
However, mounting losses and the departure of the company’s longtime chief executive, Graham Cooley, spooked investors, with ITM shares falling 26% in early trading on Wednesday.
Most hydrogen is “blue hydrogen” produced from fossil gas, using carbon capture to reduce emissions, but this method still fails to capture between 5% and 15% of the CO2. Green hydrogen is produced by separating water using electricity from renewable energy, with minimal emissions.
Proponents of the technology argue that hydrogen could present a solution to decarbonize heavy and polluting industries. There are questions, however, about the cost of the method.
Cooley said that since the start of the year, as methane and fertilizer prices have risen, green hydrogen “has reached first parity and then has become cheaper in many cases than producing these materials. raw materials from gaseous raw materials”.
He added: “There is only one net zero energy gas that can replace methane to help the world deal with climate change. Green hydrogen can also help ensure energy security and contribute to food security through the production of green ammonia for fertilizers.
“These capabilities have become very powerful drivers for our business as governments seek to accelerate the share of intermittent renewables in their countries’ energy mix to address dependence on weaponized gas supplies. of Russia.”
ITM, which is listed on the AIM stock exchange in London, recorded revenues of £5.6m for 2022, up from £4.3m the previous year. However, pre-tax losses fell from £27.6m to £46.7m. Last November, the company raised £250 million to expand its manufacturing capacity. Cooley, who led the company for 13 years, will stay on until a successor is found.
Hydrogen has long been touted as an important option for the future of fuel. The government published a hydrogen strategy in August 2021, setting the target of doubling UK hydrogen production to 10 gigawatts by 2030.
Last month the Guardian revealed that ScottishPower was planning to build a £150million green hydrogen plant in the port of Felixstowe to power trains, trucks and ships. The company said demand for green fuel had intensified since gasoline and diesel prices began to soar last year, encouraging the company to invest.