ITM Power: a star of the green investor revolution

by Lee Wild from interactive investor |

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A new craze for clean technology and hydrogen stocks has already generated significant stock market returns for many investors in ITM Power (LSE:ITM). Now, chief executive Graham Cooley explains the science behind the technology, the future of oil companies such as Royal Dutch Shell (LSE:RDSB) and BP (LSE:BP.) and shares his vision of global energy provision in the 21st century.

Lee Wild, head of equity strategy, interactive investor: Hello. Today I have with me Graham Cooley, CEO of ITM Power. Graham, we’re all becoming greener but could you quantify, how green is ITM Power?

Graham Cooley, CEO of ITM Power Yes. We are all becoming greener, I think investors particularly are becoming more and more conscious about the power of the city and the capital markets, and everyone’s becoming ESG [environmental, social, governance] investors and I think that’s an incredibly important dynamic. Green is, kind of, the E part of the ESG and, actually, ITM Power is an incredibly important environmental business. 

And, you know, green hydrogen is the only net zero energy gas, and so in terms of achieving net zero electrolyser manufacturers and renewable energy power providers are really important for the environment. So, yes, we are an incredibly green company, but we also aim to be a world leading company in the area of not only the E but also the S, that’s the social responsibility part, and also the G the governance part.

So, I would say the answer to your question is, we are a leader in the green economy and particularly in green manufacturing in the UK. We’re also now increasingly wanting to articulate more and more our story in social responsibility and governance, as well.

Lee Wild: Of course. I mean, the shift to green energy is particularly evident in transport, so no more petrol or diesel cars will be sold in the UK from 2030. But, what would the dominant power source be after that, is it electric, hydrogen? Will drivers have a choice or is this a VHS/Betamax situation?

Graham Cooley:  Yes, VHS/Betamax, you’re showing your age there, aren't you? What about YouTube and MP3, you know, I’ve never really accepted the idea of VHS and Betamax, we have petrol and diesel why would there be a choice. Look, let me start by saying I thought that the UK government showed amazing leadership when it put net zero into law for 2050. And, I also believe they’ve shown great leadership in banning new petrol and diesel sales 2030 to 2025, that’s genuine leadership so really pleased to see that coming forwards.

Will it be electrons or will it be hydrogen? In terms of transport, it will be both. I think very short-range small vehicles will be plug in electric vehicles, and there’s no reason why you shouldn’t do that. But you can’t use plug-in electric vehicles if you want heavy, long-range commercial vehicles. So, large cars, buses, trucks, trains will all work on hydrogen and smaller vehicles as plug-in electric vehicles.

The broader answer to your question, you used the word energy and energy source, the world only uses energy in two forms, it uses it in the form of electrons, or it uses it in the form of molecules. And, there’s only one net zero molecule and that’s green hydrogen, there isn’t another one. So, the energy future is about net zero electrons and using them to produce net zero molecules by splitting water.

And, you know, the energy transition reel is this, in the past oil and gas companies produced fossil fuels and we used fossil fuels to make electrons, that’s called power generation. We’re looking at doing the opposite, we’re looking at making net zero electrons and using them to produce our molecules, it’s the other way around. Molecules to electrons is the old economy, electrons to molecules is the new economy because that one is net zero.

What you see is all of the renewable energy companies wanting to make net zero molecules because, actually, they need energy storage and the best way of storing electrons is to turn them into molecules. And, at exactly the same time in history you see all the fossil fuel companies buying renewable power and also wanting to make net zero molecules. So, you have a convergence of the renewable energy companies and the oil and gas companies and, in the future, you won’t distinguish between them they will all just be energy companies and you will see a complete convergence.

Lee Wild: You’ve painted a picture of the future there, but it costs a lot of money to develop new fuels and ways of operating, as well. You’re clearly not worried about alternative energy sources, but what about synthetic fuels anything like that, and really how will the world be sourcing its energy in, say, 2030 or 50 years’ time?

Graham Cooley:  Yes. I mean, I go back to what I said earlier, if  you don’t mind, the world only uses energy in two forms, when you boil it down, electrons and molecules. And, you can make net zero electrons using renewable power and the only net zero molecules is green hydrogen. Now, you might want to live in a parallel universe or create some new form of physics but there’s only two.

And so, any net zero molecule that you make, a sustainable fuel, for instance, starts with green hydrogen. You can then sequest from the atmosphere using air capture, CO2, and you can make a renewable methanol or sustainable aviation fuel, but you have to start with green hydrogen first of all. A renewable electron you split water, you make a molecule that’s net zero and then you can attach other things to it. 

You might want to attach CO2 from the atmosphere and if you do that you make a carbon based fuel, methanol or sustainable aviation fuel, as I said before. You might want to capture nitrogen and react with that green hydrogen and make a sustainable ammonia which you use for fertiliser or as a fuel. You might want to use that ammonia then to make urea, which is capturing another CO2 molecule, and that is an additional type of fertiliser. But it all comes down to having a green electron and producing a green molecule by splitting water.

Lee Wild: So, the future’s bright for ITM Power then?

Graham Cooley: Exceptionally bright, yes.

Lee Wild: Graham Cooley, CEO at ITM Power, thanks very much for joining us today.

Graham Cooley: Thank you. And, thanks to all of your listeners for your interest in ITM Power, it’s much appreciated.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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