Energy storage and clean fuel company ITM Power PLC (LON:ITM) has received funding from the UK government for the Gigastack feasibility study it is undertaking alongside offshore wind group Ørsted.

The project aims to dramatically reduce the cost of electrolytic hydrogen by deploying polymer electrolyte membrane (PEM) electrolysers on a much larger scale than has previously been possible.

READ: Announcement in full

Typically, the world’s largest electrolyser factories are capable of less than 30 megawatts (MW) of capacity output per annum, but ITM believes it can build a semi-automated manufacturing facility with an electrolyser capacity of up to c.1 gigawatt/year.

Ørsted will demonstrate the synergy between GW scale offshore wind energy deployments and hydrogen that will enable the continued decarbonisation through renewables and a continued cost out of offshore wind power projects.

Consultancy group Element Energy will conduct market analysis of potential end users, explore business models for the operation of large electrolysers in the energy system and define a roll-out strategy for the first 100MW electrolysers.

Should the feasibility study prove successful, ITM and its partners will have the opportunity to bid for further government funding for the implementation.

“The Gigastack Project seeks to significantly lower the cost of producing green hydrogen by scaling the individual electrolyser stacks and the production process to 1 GW (1,000 MW) of electrolysis per annum,” explained ITM chie executive Graham Cooley.

“We are delighted to be working on this important initiative, backed by the UK Government, with Ørsted the largest supplier of offshore wind in the UK.”

ITM Power shares were up 1.6% to 37.3p on Thursday.