ITM Power Edges Closer to £46.5m Grant as Chronos Rollout Gains Industrial Backing

A key regulatory assessment has brought ITM Power’s state-backed funding package one step closer to final approval. The Subsidy Advice Unit (SAU) published its official opinion on the £46.5 million grant proposed by the UK’s Department for Energy Security and Net Zero, clearing an important procedural hurdle. The scrutiny surrounds the centrepiece of a broader £86.5 million government support package, which also includes a £40 million equity injection from Great British Energy, making the state-owned entity a direct shareholder in the hydrogen electrolyser specialist.

ITM Power intends to channel the capital into expanding its manufacturing base in Sheffield, adding one gigawatt of automated production capacity for its next-generation Chronos platform. The company projects that the new generation of PEM electrolysers will cut manufacturing costs by 40% and improve energy efficiency by 10%. The UK government sees the South Yorkshire expansion as a strategic building block for domestic hydrogen infrastructure, with the project expected to create more than 400 jobs. A final decision on the regulatory green light for the subsidy is anticipated in June.

The Chronos technology took centre stage at the World Hydrogen Summit in Rotterdam from 19 to 21 May, where ITM Power used the platform to demonstrate its transition from a promising developer to a credible industrial supplier. The timing is deliberate: the company is aiming to bridge the gap between pilot projects and full-scale serial production, a hurdle that many hydrogen players still face. Standardisation and reduced manual labour are the twin goals of the Sheffield automated line.

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Alongside the Chronos offensive, ITM Power has been building industrial partnerships that provide real-world validation. Its collaboration with Rheinmetall on the "Giga PtX" project targets the roll-out of decentralised synthetic fuel plants across Europe, with each unit capable of 50 megawatts of electrolysis and annual output of up to 7,000 tonnes of e-fuel. The partners are specifically addressing the fuel needs of NATO forces. Separately, the Humber-H2ub project with Uniper is moving towards a final investment decision, planning 120 megawatts of capacity using Poseidon modules, with potential expansion of another 200 megawatts down the line.

The stock market has responded favourably to the confluence of catalysts. On 19 May, ITM Power’s London-listed shares jumped 12.65% to close around 146 pence. A further boost is expected from the upcoming inclusion in the MSCI Small Cap indices, effective at the close of trading on 29 May. Index rebalancings of this kind tend to trigger passive buying from funds tracking the benchmarks. Morgan Stanley has raised its rating on the stock to "Overweight" and lifted its price target to 170 pence, while forecasting an EBITDA break-even by the 2028 financial year.

Financially, ITM Power now sits on a stronger footing. Following the state-backed equity placement, the company’s cash guidance for the current fiscal year stands at between £210 million and £215 million, providing ample runway for the Sheffield build-out. The immediate focus, however, remains on the final subsidy ruling next month. If the grant is confirmed, ITM Power will have both the regulatory mandate and the funding in place to turn Chronos from a showcase technology into a high-volume industrial reality.

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