Progress Report

ITM Power PLC
29 June 2007

Strictly Embargoed until 0700hrs, 29 June 2007




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


                                Progress Report



ITM Power's principle aims are the commercialisation of the hydrogen economy and
the development of technology to enable the replacement of hydrocarbon fuels.
The Company is pleased to announce significant progress in these objectives:

Electrolytic Hydrogen Fuelling for the ITM Bi-Fuel Car:

The Electrolyser: ITM is making good progress in the design and construction of
a 'home refuelling' system using an ITM electrolyser to convert renewable or off
peak electricity into hydrogen. This device depends upon an electrolyser stack
of 10kW electrical input operating at pressures of 75 bar. The Company is
pleased to announce that a prototype electrolyser has now operated at the
requisite power (10kW).

The pressure test target 75 bar (or 1125lb/sq inch) originally set for December
2007 has been achieved. This programme was accelerated to provide early
technical information for the design of the 2008 factory production units which
are anticipated to combine both pressure and power capabilities in a single
unit.

The Bi-Fuel Car: In conjunction with the University of Hertford, ITM has
modified a petrol engine Ford Focus to operate using pure hydrogen able to be
supplied by an ITM electrolyser before switching to gasoline. An ITM self
pressuring electrolyser has now successfully fuelled this vehicle. Drivability
in public road conditions when using hydrogen has proved to be excellent.

This vehicle has been refuelled with hydrogen to a pressure of 75 bar for range
testing purposes and has exceeded 25 miles on a single charge of hydrogen both
when tested on a rolling road, and during testing on public highways.

Later this year, ITM plan to publicly demonstrate both the vehicle and
refuelling system using electrolyser prototypes that will closely resemble the
initial units to be manufactured at the new Sheffield production site.


Fuel Cell Developments:

The Company is pleased to announce that the fuel cell cost reduction programme
is proceeding on track, and it has succeeded in increasing the performance of
its hydrogen and oxygen fuel cell system so that the resulting fuel cell meets
the cost reduction target for June 2007 of less than $500/kW if produced in
accordance with the assumptions set out in the Technical Update, 18 October
2006.

This has been achieved principally by further increases in the power density at
which the ITM hydrophilic material can operate, leaving the reduction in
platinum loading and/or the replacement of platinum as technologies available to
meet the Company's future cost reduction strategy.


Membrane Durability:


ITM's longest term electrolyser membrane test cell has been taken out of service
after 11,500 hours of intermittent operation (i.e. 11,500 hours on in a total
test exceeding 20 months) following an anomalous decrease in operating voltage.
Detailed examination shows that the membrane had become contaminated with
metallic debris, consistent with corrosion products from other parts of the cell
and associated test equipment. When removed the membrane was found to be robust,
un-punctured and continuous, there was no evidence of chemical erosion or
impending mechanical failure.  In the total test programme of well in excess of
50,000 hours no other similar examples of anomalous voltage decrease have been
noted. As a precaution the Company is redesigning its longevity test cells to
reduce the possibility of similar contamination disrupting future trials.

Jim Heathcote, CEO, ITM Power Plc commented: 'This longevity test has been in
operation for nearly two years and has achieved very positive results which
clearly make the product commercially viable. It should be noted that the
process of contamination does not necessarily imply membrane failure and cell
design modification could further improve durability.'


Hydrogen Diesel Applications:


ITM has installed an electrolyser and on-board emission monitoring equipment
into a road-going vehicle (a Range Rover 3l diesel). This equipment has
demonstrated that an ITM electrolyser can operate successfully in the demanding
environment of a moving vehicle, and direct observations of reproducible
reductions in the principle emissions have been recorded while the electrolyser
was active. However, the full commercial or military implications of the results
cannot be judged in advance of a research programme such as that agreed with
ABRO.


New Manufacturing Facility:


The design work for the new 15,000sq ft Sheffield site is nearing completion and
preparation work has begun for the installation of the equipment to manufacture
annually up to 10 megawatts of electrolysers. This plant will have one of the
largest electrolyser production capabilities in the world. The Company is
finalising the design of the electrolyser units which are anticipated to be
produced in the new factory. So far this programme is on time and budget.

Jim Heathcote, CEO, ITM Power Plc commented: 'The Company has made tremendous
technical advances which are being included in the design of electrolyser
systems for production in the new Sheffield facility in the first half of 2008.
The Bi-Fuel car and refuelling system very clearly demonstrates a simple,
convenient and low cost transportation solution that significantly reduces
greenhouse gases and helps mitigate climate change. We believe combining
electrolysers with an internal combustion engine vehicle brings affordable
hydrogen transportation forward by many years.'


Ends


For further information please contact:


Gemma Chandler
ITM Power Plc
Tel: [phone]
Mob: [phone]
www.itm-power.com.






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