ITM Power, Sumitomo Enter Strategic Partnership

ITM Power and Sumitomo Corporation have entered into a strategic partnership “for the development of multi-megawatt projects in Japan based exclusively on ITM Power’s electrolyser products.”  The two companies will also look for collaborative opportunities outside Japan.  In a July 9 press release, ITM refers to the two companies’ shared vision for “the use of hydrogen to decarbonise heat, transport and industrial processes” as the foundation for the arrangement.

ITM is an industry member of the NH3 Fuel Association.  The company was founded in 2001 and is based in Sheffield in the United Kingdom.  It realized total revenue and grant funding for fiscal 2018 of £14.1 million ($18.5 million).

According to its Web site, ITM “manufactures integrated hydrogen energy solutions to enhance the utilisation of renewable energy that would otherwise be wasted.”  The technology that is at the heart of the business is the proton exchange membrane (PEM) electrolyzer.  The company states that its proprietary electrolyzer technology is well-suited for “grid balancing and energy storage services, and for the production of clean fuel for transport, renewable heat and chemicals.”

The press release details the geographic profile of the company’s activities, with near-term contracts focused almost exclusively in the UK and Europe.  The agreement with Sumitomo “presents a platform for entering the Japanese market and the rest of the world.”

Sumitomo Corporation is a member of the Sumitomo Group conglomerate.  The Corporation’s revenues for fiscal 2018 were ¥4.8 trillion ($43 billion).  Originally a trading company, the Corporation now conducts diversified activities across six business units.  According to the Corporation’s website, the Mineral Resources, Energy, Chemical and Electronics unit supports “a wide range of customers by securing mineral, oil, and gas resources and creating new business opportunities by leveraging our trading businesses, derivative functions and global value chains.”  Fertilizers and agricultural chemicals are included within the unit’s scope.

In commenting on the strategic partnership, Shuichi Suzuki, General Manager of the Energy Division, said that “the Sustainable supply of energy and improvement of the global environment are material issues that should complement each other.  Our goal is to contribute to creating a carbon free society. In order to accomplish this, we will be involved in producing CO2 free hydrogen by electrolyzing water with renewable energy, which can be utilized as fuel for the next generation of energy and mobility.”

The press release says that “the Partners will use their combined capabilities to: market, develop, finance and execute multi-megawatt hydrogen projects; jointly develop the value proposition and work up a number of strategic business cases for rollout, and; conduct exclusive feasibility studies for several projects in Australia,” but does not provide detail on the specifics of potential projects.

A sense of the companies’ aspirations can be gained from a video posted on ITM’s Web site.  It describes the 2015 demonstration of ITM’s high-capacity HGas hydrogen generation platform as part of a power-to-gas energy storage system in Frankfurt, Germany. The project involves six electrolyzer stacks in a 20’ container to achieve 0.3 MW of power capacity.  The unit’s “rapid response” feature allows it to turn on and achieve 100% of its nameplate operating rate in one second, thereby accommodating “fluctuating power profiles.”  It is capable of “self-pressurizing up to 80 bar,” which allows the “direct injection” of the output hydrogen into the natural gas grid.

The “first of its kind” demonstration was led by German utility Thüga AG and supported by the European Power to Gas Platform, “a joint body, based on an integrated network of stakeholders, which aims to explore the viability of power-to-gas in Europe.”  According to a contemporaneous article in Fuel Cell Works, the demonstration facility “will principally take part in the market for negative secondary balancing power. This implies when electrical supply exceeds current demand, the electrolyser will increase its electrical consumption as and when required to do so by the transmission system operator (TSO).  The plant then takes this power and coverts it into hydrogen, simultaneously contributing to the stability of the electrical grid.”

ITM has made substantial progress with its technology and its business since 2015.  For example, the company’s latest stacks, used in its megawatt-scale projects, have a nominal power rating of 670 kW each, which allows three stacks to form a 2 MW skid and multiple skids to scale into systems with tens and hundreds of MW of power capacity.

ITM’s 2018 Annual Report states that the company has secured funding from the UK government “to collaborate with Northern Gas Networks (NGN) to undertake a study examining the potential deployment of large-scale Power-to-Gas energy storage. The feasibility study will focus on deployments capable of operating cost-effectively from 50MWh energy storage capacity upwards within the boundaries of the NGN gas distribution network.”

On an even bigger stage, a December 2017 press release about the company’s formation of an Australian subsidiary cites the Australian Renewable Energy Authority’s May 2017 announcement that “exporting renewable energy (in the form of hydrogen, ammonia or embodied in processed raw materials), will form one of its four core investment priorities.” The press release also mentions a report “published by gas industry stakeholders in Australia [that highlights] the enormous potential of the gas network for energy storage, noting ‘Australia’s gas infrastructure can store the same amount of energy as 6 billion [Tesla] (13.5kWh) Powerwall batteries.’ Converting the unused energy generated by renewables into hydrogen by power to gas technology thereby avoids the cost of new batteries.”

And then in January 2018, Royal Dutch Shell issued a press release announcing that it will work with ITM and three other partners to “build the world’s largest hydrogen electrolysis plant at Rhineland refinery, Germany. With a peak capacity of 10 megawatts the hydrogen will be used for the processing and upgrading of products at the refinery’s Wesseling site as well as testing the technology and exploring application in other sectors.”  A Shell Manufacturing executive explained that the point of the project is to produce hydrogen from electricity instead of natural gas — “thereby facilitating more use of renewable electricity” and reducing “the carbon-intensity of the site.”  (The company has just released a video about the project.)

ITM has also signed contracts with motor industry players, including Toyota, Honda, and Hyundai, for deployment of its HFuel hydrogen fueling platform.  The Annual Report says the company is working on “large-scale refuelling station designs . . . based around electrolyser configurations of up to 50MW in size with the capability to produce up to 20 tonnes of hydrogen per day. This is in response to industry demand for larger scale industrial installations for refuelling heavy logistics vehicles, such as road haulage vehicles, ships and trains.”