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Investing.com -- Shares of ITM Power (LON:ITM) rose more than 3% on Tuesday after the Sheffield headquartered company said its Hydropulse unit entered a strategic partnership with renewable energy developer ABO Energy.
The partnership combines ABO Energy’s contacts with industrial offtakers, its international development capabilities and selected pre-developed hydrogen projects with Hydropulse’s expertise in building and operating modular, containerised hydrogen production plants using ITM’s electrolyser technology.
Under the agreement, the two companies will focus on developing decentralized hydrogen production units near or on customer sites.
“While still early days, we continue to see the upside to Hydropulse, given its potential to accelerate ITM’s progress to profitability with limited cash outflows,” said analysts at RBC Capital Markets in a note.
The scope of the projects includes permitting, electricity supply, engineering, construction and operation.
Hydropulse will build, own and operate the facilities, while ABO Energy will provide development support and power supply.
According to the statement, the arrangement allows industrial customers to secure hydrogen supply without making upfront capital investment.
The collaboration will be based in Europe, with an initial focus on Spain and Finland, where the companies said low power prices support green hydrogen production. They added that several initial projects with identified customer demand are already in place.
“This is about market traction. With ABO Energy’s access to sites and end users, we can realise projects faster and turn our technology into recurring revenues,” ITM Power chief executive Dennis Schulz said in the statement.
Karsten Schlageter, managing director of ABO Energy, said the deal enables the company to deliver projects more quickly.
“Many of our projects are already developed to a stage where we can move quickly when the offtake is committed. With Hydropulse on board, we can now offer our customers long-term reliable plant operation with a strong technology partner,” Schlageter said.