New Technical Milestones

ITM Power PLC
31 January 2006



Embargoed, for release at 0700, 31st January 2006



                                 ITM Power Plc
                            ('ITM' or 'the Company')


                            New Technical Milestones


ITM Power Plc, which aims to provide enabling technology for the hydrogen
economy and maximise shareholder value by developing specific devices and
intellectual property (IP) that controls important aspects of the generation and
re-conversion of hydrogen, is pleased to present a new set of technical
objectives. These new objectives build on those milestones set out, and since
successfully achieved, at the time of the IPO.

ITM will concentrate on those technologies which the Directors believe are
needed to underpin its route to commercialisation. The new objectives set out
below, have therefore been selected to focus upon devices and technologies which
target specific commercial opportunities. Importantly, the realisation of
commercial pre-production prototypes having the potential to produce hydrogen
from sustainable primary energy resources at a cost which is competitive with
hydrocarbons is now an integral part of the new milestones.


Summary of new objectives:

(1) Electrolyser:        a 5kW electrolyser stack for delivery by December 2006

(2) Electrolyser:        a 25kW electrolyser stack for delivery by December 2007

(3) Fuel Cell:           a 20W, 2-liquid fuel cell stack engineered to 
                         pre-production standard, including fuel supply cassette
                         and interface electronics, by December 2007

(4) Production Process:  the development of 'production ready' cell modules made
                         by a fully engineered 'one-step' production route for
                         delivery by December 2007


Electrolysis

By December 2006:

A 5kW electrolyser module with a projected capital cost of less than $250/kW and
such longevity as the data from ongoing tests justify. This unit is to be
designed so that it can be combined into units of up to 20kW.

By December 2007:

A 25kW electrolyser module with a projected capital cost of less than $200/kW
and such longevity as the data from ongoing tests justify, but with an objective
of 3,000 hours of cyclic operation. This unit is to be so designed that it can
be combined into units of up to 100kW.

An extensive market review of the opportunities available for electrolyser units
of a range of ratings has suggested that units in the range 10-25kW would have
applications in a number of 'local' scenarios (solar cells applied to individual
buildings, or small local wind machines). Units of 100kW and above would be
needed to interface with wind power or solar power systems of economic size used
in commercial energy farms.


Fuel Cells

ITM proposes to focus on the development of complete working, pre-production
prototype cells using the 2-liquid technology demonstrated in July 2005. It will
proceed via prototype cells of low power (i.e. approx 4W) output and will 
incorporate all the balance of plant necessary to allow for the general 
acceptance of the system, i.e. rapid refuelling via replacement fuel cassettes
and the electronic interface circuitry needed to operate standard electronic
equipment. The overall objective is the development of a pre-production
prototype flexible 20W device (i.e. conformable, lightweight and vibration
resistant) for military or emergency services applications.

By December 2006:

A 4W prototype module together with the rapid refuelling cartridge and output
power conditioning electronics necessary to operate electronic devices. This
will provide a working demonstration of a complete system. This is considered a
cost effective route to exposure to the micro fuel cell market.

By December 2007:

A 20W continuous output lightweight flexible fuel cell stack designed to be a
pre-production prototype suitable for external testing, validation and
acceptance by the military and civilian emergency services. The stack will be a
complete operating system incorporating provision for rapid refuelling via a
cartridge, and output power conditioning electronics necessary to operate
electronic devices at voltages from 9v to 20v.


Production Process

ITM's core intellectual property encompasses both the materials and a novel
one-step production process. The developments and achievements announced to date
have depended principally upon the use of ITM's patented materials. However, the
long term future value of ITM would be maximised if the 'one-step' manufacturing
process can be developed so as to be 'production ready'.

By December 2007:

Develop the 'one step' production route through all the steps (scientific,
technical and engineering) necessary to completely define the process on a
full-scale production scale. This programme is required to allow accurate
definition of the capital cost of a production facility and thus the unit cost
of production of any specific device. It is also envisaged that additional
valuable IP will result from the programme.

The principal 'deliverable' from this programme is expected to be the new IP,
reliable costing data and a working demonstration flexible fuel cell or
electrolyser module made by the fully engineered 'one-step' process.

Jim Heathcote, ITM's CEO commented: 'The next phase of our development is
critical to our value in the long term. In order to maximise shareholder value
and avoid leaving ITM in the position of having to seek cross-licences to use
its own technology, it is essential that the Company makes its technology
production ready.

'I am confident that we can meet these new, challenging objectives in the next
two years, and in doing so I believe that this will place ITM in a position to
benefit from the impending acceleration of a global change from hydrocarbon fuel
(oil and gas) to hydrogen. This transition will offer very significant business
opportunities. ITM plans to be at the heart of the developing hydrogen fuel
economy'.


-ends-


For further information please contact:

Jim Heathcote           Gemma Chandler                Tim Linacre
ITM Power Plc           Tavistock Communications      Panmure Gordon & Co
Tel: [phone]       Tel: [phone] /          Tel: [phone]
                        07787 510 630

or visit www.itm-power.com


Notes to Editors

About the hydrogen economy and ITM Power:

ITM is a leading technical innovator of fuel cell and electrolyser technologies
for the hydrogen economy.

The future shape of the energy industry is being driven predominantly by the
growth in the global demand for energy, the diminishing reserves of oil and by
the environmental impact of burning fossil fuels.


Hydrogen Economy:

 *  Term used to describe the use of hydrogen as a critical element in the
    energy economy of the future.
 *  Benefit of hydrogen is that it has the potential to a be a totally 'clean'
    source of fuel
 *  The vision is that low cost electrolysers produce hydrogen from 'clean'
    energy sources such as solar, wind and wave and fuel cells use this hydrogen
    to produce the electricity when it's required

'If all the sunlight hitting the earth's surface in one hour was harnessed and
converted into electrical power, it would be enough to fulfil mankind's energy
needs for a complete year' - BP Solar

Electrolysers, via an electrochemical process, convert electricity (from
renewable energy inputs) and water into hydrogen (which can be stored) and
oxygen and in turn fuel cells, via a similar process convert hydrogen and oxygen
into electricity and water.

ITM announced in November 2004 that it had successfully produced and tested a
Mark III electrolyser stack, which has been operated at a power rating in excess
of 200 Watts and has now achieved its milestone of 500 Watts. On the basis of
the Mark III results, The Generics Group, an independent scientific consultancy,
have estimated that in mass production it is possible to achieve US$283 per kW.
This is below the 2010 US Department of Energy target of $300 for an
electrolyser stack.

PEM fuel cells developed so far are currently estimated to cost several thousand
dollars per output kW (for example, in February 2004, the US Department of
Energy estimated the current cost of a fuel cell to be approximately $3,000 per
output kW) whereas petrol engines are currently estimated at $50 per output kW.


ITM's Technology:

ITM Power plc believes it has developed and patented the keys to revolutionise
the hydrogen economy and is set to become one of the UK's leading innovators
within the alternative energy sources industry.

ITM's ionically conductive polymer materials and manufacturing processes are
used in the production of fuel cells and electrolysers, which are significantly
cheaper than those presently used in production. The technology offers high
conductivity, hydration control and has the benefit of catalyst recycling. The
Company has the ability to produce low cost fuel cells that meet the energy
demands of a wide range of industries and specialist technologies including
military, automotive and stationary fuel cell markets as well as the capacity to
produce household items such as laptops, mobile phones and domestic appliances.

ITM has patented a new manufacturing process that allows a fuel cell/
electrolyser stack of cells to be made in a single process similar to a mass
production casting process. The process is capable of producing cells or stacks
of any shape that may also be flexible so that they can be moulded into smaller
products, such as mobile phones. The Company has applied this technology to a
low cost electrolyser that can convert carbon free energy into clean hydrogen
fuel on site and on demand, therefore completing the circle of the manufacturing
process.





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