Key Highlights

  • ITM Power plc (LSE:ITM) shares fell about 10% on Friday 30 October as investors reacted to policy uncertainty and project timing.
  • Chief executive Dennis Schulz criticised a leaked draft of the EU's revised renewable energy directive, warning it could threaten Europe's electrolyser industry.
  • ITM reported record Revenue of £43.6m for the year to 30 April 2026, with its adjusted EBITDA loss almost halved to £20.2m.
  • The order Backlog stood at £144.0m, with 83% of contracts profitable, and the company held £215.6m of cash.
  • Subsidiary Hydropulse signed heads of terms for a 150MW electrolyser project at a European refinery.

Why ITM Power Is in Focus Today

ITM Power plc (LSE:ITM) is among the most debated energy stocks on the FTSE AIM All-Share on 3 November 2026 after a sharp share price fall at the end of last week. The Sheffield-based maker of electrolysers for green hydrogen saw its shares slide around 10% on Friday 30 October, as investors weighed fears over European hydrogen policy against the company's improving financial performance.

The sell-off came just days after chief executive Dennis Schulz publicly attacked a leaked draft of the EU's post-2030 Renewable Energy Directive, known as RED IV, which he warned could undermine binding renewable hydrogen targets and Investment in large industrial projects.

The EU Policy Debate

Europe's hydrogen industry has relied on binding targets for renewable fuels of non-biological origin to create Demand from refineries, chemical producers and other heavy industries. A leaked impact assessment suggested these targets could be weakened after 2030. Close to 100 companies and organisations have signed a letter urging the European Commission to maintain ambitious targets.

For ITM Power (LSE:ITM), the stakes are high. Weaker mandates could slow customer investment decisions, while strong mandates could unlock a wave of large-scale orders. It is important to note that the draft is a leak, not adopted law, and the final outcome remains uncertain.

Record Revenue and Narrowing Losses

The company's preliminary results, published on 19 October, showed clear operational progress. Revenue for the year to 30 April 2026 reached a record £43.6m, while the adjusted EBITDA loss was almost halved to £20.2m. ITM also improved the quality of its order book, with 83% of contracts in its £144.0m backlog profitable, up from 60% in April 2025.

With £215.6m of cash, ITM has a substantial buffer to fund operations while it waits for customers to commit to larger projects.

Project Milestones

ITM has delivered several notable milestones in 2026. It shipped the first stacks for a 100MW electrolyser at Shell's REFHYNE II project in Germany. Its first 100MW unit at Lingen is already in operation, with a second planned for completion during fiscal 2027. The company also received a notice to proceed on an industrial-scale project, turning an earlier Supply agreement into a firm order.

In September, ITM received a £46.5m UK government grant to industrialise its new Chronos electrolysers, and it joined Rheinmetall's Giga PtX project focused on e-fuel production.

The 150MW Refinery Opportunity

On 12 October, ITM's Hydropulse Subsidiary signed heads of terms for a 150MW renewable hydrogen project at a European refinery, using the Alpha electrolyser platform under a planned ten-year supply arrangement. The project targets a final investment decision in 2027 and hydrogen production in 2029. Management has said it could become ITM's largest commercial commitment, but it is not yet a binding order.

What Investors Are Watching Next

Key catalysts for ITM Power (LSE:ITM) include:

  • The direction of EU RED IV negotiations and hydrogen targets.
  • Conversion of the Hydropulse refinery heads of terms into definitive agreements.
  • New firm orders and notices to proceed from industrial customers.
  • Delivery of the second Lingen 100MW unit.
  • Half-year results for the six months to 31 October, usually published early in the new year.

Risks to Consider

ITM Power remains loss-making and depends on customers taking large final investment decisions, which have often been delayed. Policy changes in the EU and UK could affect demand. Competition from Chinese and other electrolyser makers is intense, and execution risk on large projects remains significant. At least one broker has recently cut its price target to 88p.

Outlook

ITM Power (LSE:ITM) is a company with improving economics, a large cash pile and a growing pipeline, but it remains highly sensitive to policy headlines. For FTSE AIM All-Share investors, the next few months will hinge on whether European hydrogen targets hold firm and whether ITM can convert its pipeline into firm, profitable orders.