ITM Power’s 120-MW Green Light: A Planning Win That Could Reshape the Hydrogen Landscape

When Uniper secured planning permission for its Humber H2ub facility near Killingholme on Wednesday, the news rippled far beyond the construction site. For Sheffield-based electrolyser maker ITM Power, the decision removed a critical cloud of uncertainty hanging over one of its most important contracts — a 120-MW project that could eventually swell to more than 320 MW.

The Humber installation, designed to decarbonise a local refinery, is already slated to use ITM Power’s technology. Uniper expects to make a final investment decision later this year, with operations targeted for 2029. But the planning nod is just one piece of a much larger puzzle that has investors both excited and deeply divided.

The Numbers Tell Two Stories

ITM Power’s order book now stands at £152 million, with 71% of contracts considered profitable — a marked improvement from the loss-making legacy deals that once weighed on the business. Management has lifted its revenue guidance for the current financial year to between £40 million and £43 million, after posting a record first-half haul of £18 million. Equipment sales contributed £15.5 million of that, with engineering studies, spare parts, and maintenance contracts making up the rest.

Yet profitability remains elusive. The company is expected to post an operating loss of roughly £30 million, and analysts see no near-term path to black ink. Zeus Capital notes that ITM Power holds nearly £198 million in cash — enough to cover the current burn rate multiple times over — but that comfort has done little to narrow the chasm between the share price and analyst targets.

Should investors sell immediately? Or is it worth buying ITM Power?

A Rally That Left the Street Behind

The stock has surged from around 30 pence in May 2025 to recent highs of 166.50 pence, touching a new 52-week peak. That rally has been one of the most dramatic re-ratings in the UK green energy space, but the analyst community has largely failed to keep pace. The average price target sits at just 98.64 pence — a yawning gap that underscores the divergence between market sentiment and Wall Street’s view.

UBS stands out as particularly bearish, maintaining a target of 60 pence. Morgan Stanley, by contrast, sees an operating break-even by fiscal 2028 — a year ahead of consensus — citing lower assumed capital costs and an improved risk profile. Of the eleven analysts covering the stock, seven rate it a buy, four say hold, and one recommends selling. The range of targets, from 55 pence to 310 pence, reveals just how wide the disagreement runs.

Retail Traders Cash Out

The rally has prompted a wave of profit-taking among retail investors. On the AJ Bell platform, ITM Power topped the sell list at one point, with nearly one in every fifty sell orders tied to the stock. On a single trading day, 13.2 million shares changed hands — 168% above the daily average — sending the price down to 143.30 pence before it recovered.

The selling pressure reflects a classic tension: private investors who rode the stock from its lows are locking in gains, while the bull case rests on a series of catalysts that have yet to fully materialise.

Chronos: The Next Inflection Point

At the heart of the bullish thesis is the new Chronos manufacturing line. The platform promises PEM electrolysers with double the power density and 40% lower costs, targeting a gigawatt of capacity by 2028. Each unit delivers two megawatts — triple the output of the current Trident system.

The financing rests on two pillars. Great British Energy has committed £40 million as a strategic equity stake, while the Department for Energy Security and Net Zero has pledged a £46.5 million grant — pending approval from the Competition and Markets Authority, expected in June. A positive CMA decision would secure the funding for the next production generation, giving ITM Power two structural wins within weeks if combined with the Humber planning approval.

A Military Dimension

Beyond the civil market, ITM Power is working with Rheinmetall on the Giga-PtX project, which envisions several hundred plants across Europe, each with up to 50 MW of electrolysis capacity, producing synthetic fuels for NATO forces. The defence angle adds a strategic layer that pure-play hydrogen stocks typically lack.

ITM Power at a turning point? This analysis reveals what investors need to know now.

In Germany, the company has secured agreements with RWE and the Stablegrid Group covering more than 710 MW of projects, with a new Berlin subsidiary set to handle local delivery. A capacity reservation with RWE for 150 MW of Neptune V electrolysers is exercisable through 2027.

June’s Verdict

The CMA decision on the Chronos subsidy will be the next major test. If it comes through, the financing for the next-generation production line is locked in — and ITM Power will have cleared two structural hurdles in rapid succession. If not, the gap between the stock’s lofty valuation and its still-loss-making operations will only grow harder to justify.

For now, the market is betting on the story. June will tell whether that bet pays off.

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