Italy's Snam takes strategic green hydrogen stake in UK's ITM Power

London — Italian gas transmission company Snam has announced a strategic green hydrogen partnership with UK electrolyser producer ITM Power with a 100 MW first stage target, Snam said late Oct. 22.

The agreement includes a GBP30 million ($39 million) investment in ITM Power and a commercial alliance for the development of projects between 2021-2025.

"Snam's global presence may act as a driving force for the development and distribution of ITM Power's products at an international level," it said.

The agreement meant Snam would be able to include ITM's PEM electrolysers in green hydrogen projects "up to 100 MW, also in collaboration with other operators at the Italian and international levels," the Italian company said.

Italy had the opportunity to become a green hydrogen hub between Europe and North Africa, said Snam CEO Marco Alverà.

Several European countries, including France, Germany, Italy, the Netherlands, the UK, Portugal and Spain, have announced strategies to support sustainable hydrogen production.

Meanwhile the European Commission has outlined an EU hydrogen strategy targeting development of 40 GW of electrolysis by 2030.

Along with Ørsted, Phillips 66 and Element Energy, ITM is involved in the Gigastack project in the UK, seeking to deliver 1 GW of bulk, low-cost, zero-carbon hydrogen production by 2024, using offshore wind to power PEM electrolysers.

ITM is deploying the world's largest PEM electrolyser (10 MW) at Shell's Rheinland refinery in Germany. It has a strategic partnership with chemicals company Linde, which is a 20% shareholder in ITM and is acting as the company's EPC contractor.

"Snam is the largest gas transporter in Europe, and is also the most vocal operator when it comes to replacing its natural gas grid with a green hydrogen grid," ITM CEO Graham Cooley said in an investor presentation Oct. 23.

"We've spent a year developing our agreement, laying the ground for a first stage of 100 MW with a large pipeline of projects." he said.

ITM is close to commissioning a new manufacturing facility at Bessemer Park, Sheffield. The factory will eventually have capacity to build 1 GW of electrolysis capacity per year.

Announcing closure of a placement of new shares raising GBP165 million, including Snam's subscription, Cooley said ITM would "pull the trigger" on construction of a second gigawatt manufacturing plant once the Bessemer Park facility had reached 60% capacity. A site had yet to be selected.