Itm Power Regulatory News (ITM)

2 January 2020

ITM Power plc

("ITM Power" or "the Company")

HyDeploy: UK Gas Grid Injection of Hydrogen in Full Operation

ITM Power (AIM: ITM), the energy storage and clean fuel company, is pleased to note the announcement by HyDeploy that the UK's first pilot project to inject zero carbon hydrogen into a gas network to heat homes and businesses is now fully operational. The full text of HyDeploy's announcement is set out below.

Dr Graham Cooley, CEO, ITM Power said: "I am delighted that this important pilot project is now operational. The increased use of hydrogen to decarbonise heat via the gas grid will perform a critical role in helping the UK to fulfil its ambitious climate change obligations. Indeed, the Committee for Climate Change has indicated that the UK will need between 6GW and 17GW of electrolysis in the next 30 years to store renewable power and provide renewable heat. Today's announcement is a very significant step."

UK's first grid-injected hydrogen pilot gets underway

·; Ground-breaking UK hydrogen trial underway at Keele University

·; First time zero carbon hydrogen has been injected in the UK's modern gas grid

·; 20% hydrogen/natural gas blend can cut CO2 emissions without the need to change gas appliances

The UK's first live pilot to inject zero carbon hydrogen into a gas network to heat homes and businesses is now fully operational.

HyDeploy is a ground-breaking green energy trial at Keele University, Staffordshire, that could help Britain cut its carbon emissions and open the door to a low-carbon hydrogen economy.

The HyDeploy demonstration is injecting up to 20% (by volume) of hydrogen into Keele University's existing natural gas network, feeding 100 homes and 30 faculty buildings. The 20% hydrogen blend is the highest in Europe, together with a similar project being run by Engie in Northern France.

Backed by Ofgem's Network Innovation Competition, the £7 million project is led by Cadent in partnership with Northern Gas Networks, Keele University, the Health and Safety Executive (HSE) Science Division, integrated hydrogen energy systems manufacturer ITM-Power, and independent clean energy company Progressive Energy.

When burned, hydrogen creates heat without carbon dioxide. The Committee on Climate Change has determined that the use of hydrogen in our energy system is necessary in order to reach Net Zero.

Heating for domestic properties and industry accounts for half of the UK's energy consumption and one third of its carbon emissions, with 83% of homes using gas to keep warm. The 20% volume blend means that customers can continue to use their gas supply as normal, without any changes being needed to gas appliances or pipework, while still cutting carbon emissions.

If a 20% hydrogen blend was rolled out across the country it could save around 6 million tonnes of carbon dioxide emissions every year, the equivalent of taking 2.5 million cars off the road.

Ed Syson, Chief Safety and Strategy Officer for Cadent, said: "It is impossible to overstate the importance of this trial to the UK - this is the first ever practical demonstration of hydrogen in a modern gas network in this country.

"Hydrogen can help us tackle one of the most difficult sources of carbon emissions - heat. This trial could pave the way for a wider roll out of hydrogen blending, enabling consumers to cut carbon emissions without changing anything that they do.

"HyDeploy could also prove to be the launchpad for a wider hydrogen economy, fuelling industry and transport, bringing new jobs and making Britain a world-leader in this technology. Urgent action is needed on carbon emissions and HyDeploy is an important staging post on that journey in the UK."

Mark Horsley, Chief Executive, Northern Gas Networks, said: "Hydrogen is a key piece of the decarbonisation jigsaw, and this milestone allows us to take a huge leap forwards in terms of its use in meeting climate change targets.

"Customers are ready to embrace cleaner, greener solutions in their homes, and projects like HyDeploy give us the opportunity to start making a difference to emissions today. We're very excited to be a part of it."

Professor Mark Ormerod, Deputy Vice Chancellor and Provost at Keele University, said: "Sustainability and low carbon energy is a key overarching institutional priority for Keele University, and we are delighted to be a key partner in HyDeploy.

"HyDeploy is a pioneering landmark national demonstration project, using our campus as a genuine 'living laboratory' for low carbon and energy efficient technologies. HyDeploy has the potential to be hugely impactful and lead to a step change in the reduction of carbon emissions associated with heat."

The hydrogen is produced by an electrolyser. The electrolyser, produced by the UK based hydrogen energy solutions provider ITM Power, uses an electrical current to split water molecules into hydrogen and oxygen.

In 2018 the HSE granted the HyDeploy consortium an exemption to the current limit of 0.1% hydrogen in the UK gas network. The exemption to 20% hydrogen for the project at Keele was awarded after the project gathered extensive evidence, which was scrutinised by the HSE, to demonstrate the hydrogen blend would be 'as safe as natural gas'. A similar approach was used to allow the first bio-methane producers to inject biogas into the natural gas network.

Gas safety checks were carried out in the homes and buildings in the trial area. Laboratory tests were carried out on a range of gas appliances, as well as extensive research on the effect of hydrogen on the different materials found in the gas network and the appliances.

Key learning was shared between international projects who are also trialling hydrogen blends. The HSE Science Division has been overseeing all technical and safety aspects of HyDeploy.

Keele University was viewed as the perfect location, owning and operating its own private gas network, which could be safely isolated from the wider UK gas network. The University is working with businesses, academics and graduates to create Europe's first 'at scale' multi-energy-vector Smart Energy Network Demonstrator (SEND) - where new energy-efficient technologies can be researched, developed and tested in a real world environment.

Fast facts

·; Heating homes and industry accounts for nearly half of all energy use in the UK and one third of the country's carbon emissions.

·; Hydrogen was a major component in 'town gas', gas created from coal and used widely throughout Britain before the discovery of North Sea gas in the 1960s. Up to 60% of the gas (by volume) being used by consumers was hydrogen.

·; Across Europe, permitted levels of hydrogen in the gas supply vary, from 0.1% in the UK to up to 12% in parts of the Netherlands

www.hydeploy.co.uk.

For further information, please visit www.itm-power.com or contact:

About ITM Power plc:

ITM Power plc manufactures integrated hydrogen energy solutions for grid balancing, energy storage and the production of green hydrogen for transport, renewable heat and chemicals. ITM Power plc was admitted to the AIM market of the London Stock Exchange in 2004. In October 2019, the Company announced the completion of a £58.8 million fundraise, including a subscription by Linde of £38 million, together with the formation of a joint-venture with Linde to focus on delivering green hydrogen to large scale industrial projects worldwide. ITM Power signed a forecourt siting agreement with Shell for hydrogen refuelling stations in September 2015, (which was extended in May 2019 to include buses, trucks, trains and ships) and in January 2018 a deal to deploy a 10MW electrolyser at Shell's Rhineland refinery. ITM Power announced the lease of the world's largest electrolyser factory in Sheffield with a capacity of 1GW (1,000MW) per annum in July 2019. Customers and partners include Sumitomo, Ørsted, National Grid, Cadent, Northern Gas Networks, Gasunie, RWE, Engie, BOC Linde, Toyota, Honda, Hyundai and Anglo American among others.