The government has announced a major £86.5 million investment in a UK-first green energy hydrogen project in south Yorkshire which uses electricity to split water into hydrogen and oxygen.
Yesterday the Department for Energy Security and Net Zero (DESNZ) revealed that ITM Power UK Ltd in South Yorkshire has received £40 million investment from Great British Energy, the UK’s publicly owned energy company, alongside a £46.5 million government grant in principle, to deliver a major expansion of hydrogen technology manufacturing in the UK.
The Great British Energy investment is their single largest investment to date and comes from their £1 billion Energy Engineered in the UK programme announced in December.
Headquartered in Sheffield, ITM Power designs and manufactures industrial-scale electrolysers for green hydrogen production.
DESNZ said the conflict in the Middle East has shown once again the need to take back control of Britain’s energy with clean, homegrown power to get off the fossil fuel rollercoaster.
Since July 2024, the government has secured over £90 billion of private investment in clean energy in the UK. This builds on major industrial projects given the greenlight such as Sizewell C, which will support 10,000 jobs at peak construction, and the HyNet and East Coast Cluster carbon capture projects that are set to create over 4,000 jobs in the North West and Teesside.
This latest investment delivers a further 400 jobs and it marks the next industrial chapter for South Yorkshire, establishing the region as the home of Europe’s largest electrolyser factories. It will support a 1 GW expansion of ITM’s South Yorkshire facility, with skilled jobs in manufacturing and construction locally and across the wider supply chain.
Dennis Schulz, CEO of ITM commented:
“We are grateful for the confidence and support demonstrated by the UK government. Clean power increasingly underpins energy sovereignty and resilience, which are critical to long-term economic success.
“The UK government’s support, through a combination of equity participation and grant funding, marks a pivotal step in establishing ITM at the centre of the UK’s hydrogen economy and firmly positions us as a natural partner for projects in the UK.
“The funds will enable the build-out of large-scale domestic manufacturing of our next-generation Chronos platform, underpinning confidence in our technology and sustained growth.”
DESNZ said the investment will strengthen UK electrolyser manufacturing, delivering a significant breakthrough for Britain’s hydrogen industry and industrial strategy.
The factory manufactures ‘electrolysers’, a vital technology required to generate green hydrogen, by using electricity to split water into hydrogen and oxygen. Without electrolysers, green hydrogen cannot be deployed at scale. This investment will accelerate the delivery of ITM’s next-generation electrolyser technology – known as ‘Chronos’ – which has the potential to reduce costs, enhance energy efficiencies for businesses and speed up the adoption of green hydrogen across the country.
Dan McGrail, CEO of Great British Energy, said:
“With this investment Great British Energy is backing British innovation, technology and hundreds of skilled jobs.
“This is our Energy Engineered in the UK strategy in action. We are investing in ITM helping them to scale, compete globally and keep vital engineering expertise here in the UK.”
DESNZ said the government’s commitment reinforces South Yorkshire’s status as a globally leading advanced manufacturing region, and positions the Don Valley Corridor as an international hub for hydrogen production.
The combined investment comes in addition to the government’s commitment to the hydrogen industry at the Spending Review, where £500 million was confirmed for hydrogen infrastructure.
It also follows government’s delivery on hydrogen in the UK with 10 of the first wave of green hydrogen projects all signing contracts to become operational.
The government’s grant is in principle and subject to review and consideration of advice by the Subsidy Advice Unit.
Click here for more information on how electrolyser technology works
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