Snam, Europe’s largest natural gas transport group, agreed to buy 33 million euros worth of shares in British ITM Power Plc. as part of a foray into green hydrogen development, according to a statement from the Milan-based company.
ITM Power announced that it raised approximately 165 million pounds in a share placement, including the Snam investment. The London AIM-listed company said it placed shares worth 135 million pounds at 235 pence per placing share.
The funds raised will be used on manufacturing capacity and to invest in operational capabilities, ITM Power said.
Snam additionally signed a commercial alliance with ITM Power, as it seeks access to technologies from the leading manufacturer of electrolysers, which are used to separate hydrogen into a pure form for fuel. The alliance will look for possible projects for development in 2021-2025.
Snam will be allowed to have representatives on two committees that support ITM Power’s board in key decisions on commercial activities and research & development.
The Italian corporate giant’s incursion into ITM Power share capital as well as management and potential partnerships shows both companies are willing to give something to get something in return. ITM gains from Snam’s scale and reach as well as optics of gaining an investor/partner with a 14-billion euro market cap. Snam, meanwhile, gets started on what governments and industry has tabbed as the next big technological challenge.
“The agreement with one of the main global producers of electrolysers is Snam’s first external investment in the hydrogen sector and stands alongside those we are already advancing to make our infrastructure ready for the transport of this new clean energy carrier,” said Snam CEO Marco Alverà.
The European Union aims to achieve carbon neutrality by 2050 and sees big potential for expensive but clean-burning hydrogen as a key element in that plan. The European Commission has made it a goal to develop 40GW of green hydrogen by 2030.
Snam, for its part, has been investigating blending hydrogen into its gas network, and has said 70% of its natural gas grid is already made up of “hydrogen ready” pipes, according to Reuters.
Snam also this month agreed with Italian rail operator Ferrovie dello Stato to study various uses for hydrogen.
Snam and the Italian rail operator will set up a working group to assess pilot projects for replacing fossil fuels on the national rail grid with hydrogen, especially in sectors which are not yet electrified.