Business Update

ITM Power PLC
01 September 2004

1 September 2004


                                 ITM POWER PLC
            RESULTS OF ELECTOLYSER TESTING AND BUSINESS UPDATE


ITM Power ('ITM' or 'the Company'), which aims to provide enabling technology
for the hydrogen economy announced at the time of its flotation in June 2004 a
number of important milestones for the Company that, if achieved, would indicate
to investors its progress.  Today it announces important progress in two key
areas of its technology as well as developments in other areas of the business,
that are an important first step towards the realisation of a cost competitive
hydrogen economy.

Electrolysis

ITM has now successfully produced and tested a Mark III electrolyser stack,
which has been operated at a power rating in excess of 200 Watts. On the basis
of these results, The Generics Group, an independent scientific consultancy,
have estimated that in mass production it is possible to achieve $283 per kW.
This closely approaches the 2010 US Department of Energy target of $300 for an
electrolyser stack (an objective cost which includes 'necessary balance of
plant').  Mark IV, an evolutionary development of the existing system, has now
entered the design, build and evaluation process.  Further progress in
performance and increased cost reductions are anticipated.

Additionally, ITM has commissioned the construction of an electrolyser test
facility and is on track to undertake longevity testing work.  Further
announcements on the progress of the longevity tests will be made in due course.

Jim Heathcote, CEO, ITM Power commented: 'It is important to have both low cost
systems and good longevity results before we can fully assess the commercial
potential of our scientific advances, but the fact that our Mark III system has
been run at a power input in excess of 200 Watts indicates that we are well on
track to achieve our milestone of 500 Watts by June 2006.'


Materials

ITM has formulated and produced a range of hydrophilic alkaline solid polymer
electrolyte materials, which have now been operated in fuel cell mode. These
materials provide a revolutionary starting point for the development of alkaline
electrolysers with the potential for additional cost savings over and above
those available to the acid based electrochemistry of the existing ITM systems
as costed by The Generics Group.

Jim Heathcote added: 'It is encouraging that we are also able to announce the
creation of an alkaline fuel cell using ITM's materials.  Alkaline
electrochemistry opens the route to new lower cost catalysts which promise
further cost reduction potential.'


Other business development

ITM is in discussions with a number of universities to outsource research into
two peripheral but important areas of research; photoelectric devices using ITM
materials which builds upon the recently granted ITM patent for photon augmented
electrolysis systems; and secondly research which will focus on the production
of tertiary hydrocarbons using electrolytic hydrogen and carbon dioxide
recovered from the atmosphere.  Taken together these projects will significantly
extend the range of interests available to ITM without deflecting the Company
from its core research programmes.

For further information please contact:

Jim Heathcote                David Rae/Katherine Roe     Gemma Smith/John West
ITM Power Plc                Durlacher Limited           Tavistock Communications
Tel: [phone]            Tel: [phone]          Tel: [phone]
[e-mail]                                        [e-mail]



Notes to Editors:

The Generics Group

The Generics Group is a leading integrated technology consulting, development
and investment organisation, with an international reputation for successfully
commercialising emerging science and technology.


                      This information is provided by RNS
            The company news service from the London Stock Exchange