UK-based energy storage and clean fuel company ITM Power has signed an agreement on heads of terms to purchase land in Tinsley, Sheffield, from the University of Sheffield to build its second electrolyser factory in the country.

The land is part of the university’s Innovation District and is located close to ITM’s gigafactory and technology centre at Bessemer Park.

ITM Power has agreed to pay £13.4m ($18.1m) for the 260,000ft² factory, which currently has an outline planning consent in place and a full design brief agreed with the City Council.

The deal’s completion is subject to obtaining full planning permission to build the electrolyser factory.

The facility will have an annual production capacity of 1.5GW and is expected to become fully operational by the end of 2023.

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By GlobalData

It will complement ITM Power’s existing facility in Bessemer Park, which can generate 1GW a year.

The factory will be built with an estimated investment of between £50m and £55m.

Once completed, the facility will serve as a template for ITM Power’s first international facility, which is expected to have an annual capacity of 2.5GW and increase the company’s electrolyser capacity to 5GW a year by 2024.

ITM Power CEO Dr Graham Cooley said: “The planning and construction of our second, 1.5GW-capacity factory marks the next step in delivering our strategic plan to create a blueprint for an automated polymer electrolyte membrane (PEM) electrolyser manufacturing facility to be rolled out internationally.

“At the same time, we are also focussed on increasing utilisation and throughput at our Bessemer Park Gigafactory as we prepare for the next step-change in capacity.”

University of Sheffield president and vice-chancellor Koen Lamberts said: “Hydrogen is one of the most exciting and promising clean energy solutions and ITM is at the forefront of green hydrogen manufacturing.

“This partnership is a milestone for both partners and the region in leading the way to achieving net-zero through technological innovation.”