POWER-UP Programme Status Update

RNS Number : 0526Z

AFC Energy Plc

08 December 2014

 

8 December 2014

AFC Energy PLC

("AFC" or the "Company")

POWER-UP Programme Status Update

AFC Energy plc (AFC.L), the industrial fuel cell power company, is pleased to provide an update on the status of the POWER-UP project ("POWER-UP" or "the Project"), which will demonstrate the world's largest alkaline fuel cell system at Air Products' industrial gas plant in Stade, Germany.

Highlights:

·     Fast tracking the date for demonstration of 240kW from the KORE to December 2015

·     Rapid deployment of the Company's in-line volume fuel cell fabrication processes will enable more fuel cells to be produced than was originally anticipated

·     First power generation in July 2015 of the KORE system: POWER-UP Phase 1

The Project, supported by the European Union's Seventh Framework Programme (the Fuel Cells and Hydrogen Joint Undertaking), provides an opportunity for AFC Energy to demonstrate for the first time the ability of the Company's alkaline fuel cell system (the "KORE") to achieve technical performance parameters reflective of an operational commercial facility. 

POWER-UP reflects the final phase of AFC Energy's pre-commercialisation technical development programme and creates the platform for the Company's global commercial fuel cell deployment.       

A detailed assessment of the POWER-UP programme over the last week has identified an opportunity to accelerate the date for commercial fuel cell demonstration of the KORE at its full design specification (expected to be 240kW) to the end of 2015; an acceleration of over eighteen (18) months. This will largely be achieved by;

1.    Placing emphasis on achieving maximum output from the fuel cells in order to demonstrate the operability of the KORE. In parallel, AFC Energy will further refine its leading fuel cell technology such that once KORE design validation is achieved, the KORE will be operated with fuel cells designed to achieve high power and increased longevity.

2.   Rapid deployment of the Company's in-line volume fuel cell fabrication processes that will enable AFC Energy to produce more fuel cells in 2015 than was originally anticipated.  

The updated programme up to commencement of POWER-UP in July 2015, and the first six months of operation are contained in the Attachment. 

Key highlights extracted from the schedule include:

1.   First power generation in July 2015 of the KORE system at Stade: POWER-UP Phase 1;

2.   Introducing a new phase to the Project which aims to produce commercial revenue  from the POWER-UP KORE in Q4 2015;

3.   Fast tracking the date for demonstration of 240kW from the KORE in December 2015.

There are a number of risks to the achievement of this ambitious schedule, all of which are normal for a project of this nature, including those relating to the successful phased delivery of the technical programme, logistical matters out of the control of AFC Energy, including project permitting and achievement of construction timelines agreed with EPCM contractors, and connection of the KORE to the grid which was not part of the original POWER-UP proposal.

In order to achieve the revised POWER-UP programme, AFC Energy is pleased to announce that this week, a contract was executed with Artelia, a leading European engineering, consulting and project management firm, and their sub-contractors, PlantIng, a leading German process engineering consultancy, for the undertaking of all engineering and design works associated with the delivery of the POWER-UP programme on site in Stade. This work has now commenced and is due to conclude with a facility capable of accepting the KORE in May 2015 (subject to permitting).

Adam Bond, AFC Energy's Chief Executive Officer, said: "Delivery of the KORE and POWER-UP programme is essential to the validation of AFC Energy's leading alkaline fuel cell technology. There is a lot of work still to be done before we are able to confirm achievement of our POWER-UP objectives, however, an operational reference project by the end of next year will significantly accelerate our plans for commercial deployment and market penetration." 

Mr Bond further stated: "I have been greatly impressed by the enthusiasm of AFC Energy's technical team to identify opportunities to fast track the delivery of the KORE and POWER-UP by reducing the expected time for operation of the 240kW KORE module by 18 months. I believe this demonstrates the strong drive and focus that exists within AFC Energy to see commercial-scale fuel cells operating in the global market place as soon as possible following conclusion of the pre-commercialisation phase of development work."    

For further information, please contact:

AFC Energy plc Adam Bond (Chief Executive Officer)	[phone]
Zeus Capital Limited - Nominated Adviser and Joint Broker Dan Bate, John Depasquale (Corporate Finance)                       Alex Davies, John Goold (Institutional Sales)	[phone]
M C Peat & Co LLP - Joint Broker Charlie Peat	[phone]
Lionsgate Communications - Public Relations Jonathan Charles, Rachel Rigby	[phone]

About AFC Energy

Founded in 2006, AFC Energy plc is re-engineering proven alkaline fuel cell technology to reduce the cost of electricity. Alkaline fuel cells have been used on US and Russian manned space missions for decades to provide electrical power and drinking water. By using platinum free, advanced materials, design tools and manufacturing processes at scale, AFC Energy is developing fuel cells that will compete with conventional technologies such as turbines for electrical power generation. Today, AFC Energy is pursuing opportunities in several sectors where hydrogen is readily available including the chlorine, clean coal and waste-to-energy industries as well as applications for distributed/back-up power. For further information, please visit our website: www.afcenergy.com.

About Project POWER-UP

Project POWER-UP is supported by funding from the Fuel Cell and Hydrogen Joint Undertaking (FCH-JU). The FCH-JU was established by Council Regulations on 30 May 2008 and 6 May 2014 (FCH-JU2) as a public-private partnership between the European Commission, European industry and research organisations. Its objective is to accelerate the development and deployment of fuel cell and hydrogen technologies. The Seventh Framework Programme (FP7) was created by the European Union in order to support and encourage research in Europe. It has since been superseded by the Horizon 2020 programme, which brings together all the EU's research-funding schemes and plays a crucial role in securing European growth, competitiveness and employment.

Project POWER-UP will prove the ability of AFC Energy's alkaline fuel cell system to deliver the technical performance and economic viability that commercial end-users demand. Work in project POWER-UP is the final step in the development of AFC Energy's fuel cell system before full market deployment. This project will be the world's first demonstration of an alkaline fuel cell system on such a large scale.

Attachment

No.	Milestone	Timing	Expected Outcome
1	Confirm that cartridges can achieve operating temperature using heat produced from fuel cell reactions -i.e. no external heat applied. (KORE system start-up involves the cartridges self-heating until they achieve operating temperature).	Dec 2014	1.   Using a 25-cell cartridge, operate from ambient and demonstrate that fuel cells can self-heat to desired operational temperature. 2.   Confirm time taken to achieve operating temperature from ambient is less than 15 hours (as a first step towards achieving an ultimate target of less than 3 hours for the KORE system). 3.   Operate the 25-cell cartridge under the above regime without loss of performance relative to earlier trials. 4.   Freeze key aspects of the electrode design that will be used to commission the Kore System at Stade (see Milestone 3).
2	Appoint engineering consultant to commence design package for POWER-UP programme in Stade, Germany	Dec 2014	1.   Execution of engineering and design consultants to commence permitting and engineering of the Stade POWER-UP site in Germany. 2.   Commence permitting activities necessary to commence site preparation and facilities construction at Stade.
3	Commence operational performance monitoring of a 50 cell stack within an industrial gas plant environment.	Jan 2015	1.   Baseline operating performance of 50 cell stack utilising BETA cartridge to compare performance against 50 cell stack within the new KORE cartridge (refer Milestone 4). 2.   Confirm logistical methodologies to deliver commercial-scale cartridges overseas. 3.   Confirm that time taken to achieve operating temperature from ambient is less than 12 hours (as a second step towards achieving an ultimate target of less than 3 hours for the KORE system).
4	Commence operational performance monitoring of a 100 cell stack (up to 51 live cells) within the new KORE cartridge (first time), with this trial to take place within an industrial gas plant environment	Feb / March 2015	1.   Final design validation of KORE cartridge that will commission KORE system in July 2015. 2.   Cartridges will be operated between                1.5 - 2.5kW and thermally cycled several times (to simulate KORE commissioning). 3.   Commence automates manufacture of fuel cell stacks to be used in the KORE POWER-UP programme utilising newly commissioned stack assembly robot.
5	Commence construction of POWER-UP facilities, utilities and connections at Stade, Germany (subject to timely permitting and consents)	Feb 2015	1.   Site clearing and preparation. 2.   Confirmation of all building and construction approvals and permits. 3.   Laying of foundations and construction of all necessary buildings and structures ready to receive and house the KORE module.
6	Conclude construction of POWER-UP facilities, utilities and connections at Stade, Germany	May 2015	1.   Delivery by AFC Energy contractors of a fully permitted and constructed facility ready to accept the KORE and connect to requisite piping and hydrogen connection points.
7	Commence installation of POWER-UP KORE system at Stade, Germany	May 2015	1.   Transfer of KORE to Stade from the UK ready for installation. 2.   Connection of the KORE to hydrogen sources and associated utilities. 3.   Leak integrity of all fluid delivery systems.
8	Commissioning of POWER-UP KORE at Stade, Germany	June 2015	1.   Validate safety control system protocols. 2.   Software and comms. 3.   Valve and pump sequence testing. 4.   Deliver fuel cell cartridges.
9	Commence Phase 1 - POWER-UP programme [Emphasis on initial production of power and associated testing prior to increasing power output in Phase 2]	July 2015	1.   Install cartridges that were validated in February 2015 and set flow and operational settings. 2.   Using automated sequence, operate single tier (x8 cartridge) operation and produce between 7.5 to 15kW power from the KORE (the first time).
10	Commence Phase 2 - POWER-UP programme	Q4 2015	1.   Connect the KORE System to the local power grid for the purposes of exporting electricity into the German power grid for the first time. 2.   Operate one of three tiers with x8 101-cell cartridges (40kW to 60kW production). 3.   Fuel cells to be manufactured using high-volume manufacturing processes with improved performance characteristics.
11	Achieve first commercial scale operability of KORE module as part of POWER-UP programme	Dec 2015	1.   Verification of 240kW output from KORE system. 2.   Independent verification of performance by POWER-UP partner "ZBT".

 

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