Active Energy Group Plc / EPIC: AEG / Sector: Alternative Energy

16th September 2021

Active Energy Group Plc

("Active Energy", "AEG" or the "Company")

Update on Operations at the Ashland Facility

Active Energy announces an update on its CoalSwitch operations at Ashland, Maine (the "Ashland Facility") following the conclusion of the internal review into the cause of the failure of the reactor that led to the suspension of production operations at the Ashland Facility, announced on 9 August 2021.

The Ashland Facility reference plant was in operation from late May 2021 to 5 August 2021, in accordance with the temporary permit granted to AEG's joint venture partner, Player Design Inc ("PDI") by the State of Maine. The reference plant validated the steam explosion process to produce next generation biomass fuels on an industrial scale. Production cycles, utilising residual wood materials to create CoalSwitch pellets, allowed production variables to be assessed providing invaluable know-how and identifying areas where the process will be enhanced to further improve the quality of the pellet and reduce production costs.

Independent analysis and feedback from prospective customer testing of the CoalSwitch product produced by the Ashland Facility indicates that the product being produced is of a superior quality to white pellet in terms of heating value and bulk density.  These assurances give AEG significant confidence that the CoalSwitch production process is viable at larger commercial volumes.

The internal review, co-ordinated by AEG and PDI, involved a thorough examination of all key components of the Ashland Facility. The review established that the primary reason for the suspension of operations was the failure of a monitoring component which led to an unexpected interruption in a production cycle. As a result of this monitoring component's failure, both reactors at the Ashland Facility are inoperable and will require replacement. All other equipment at the Ashland Facility remains operable and are capable of recommencing CoalSwitch production operations at any time.

AEG is examining the options to re-establish production at the Ashland Facility as soon as practicable, subject to relevant operating permits being granted.  Suitable test reactors are available at the Company's site at Lumberton and AEG is considering moving and modifying these, as a temporary measure, whilst new reactors are designed and fabricated. AEG and PDI have commenced engineering analysis to design a larger proprietary reactor that would be capable of accommodating production volumes of up to 70,000 tonnes of CoalSwitch per annum.

Despite the immediate production issue, AEG continues to supply pelletised CoalSwitch samples from existing stocks held at the Ashland Facility to allow prospective customers to test the fuel. The Company is continuing sales and marketing efforts to secure off-take agreements with prospective customers.

Michael Rowan, CEO of Active Energy, today commented:

"AEG has never been more confident in the prospects for CoalSwitch and, working with PDI, there is focus to accelerate the developments in the CoalSwitch production process and work toward the completion of production plants capable of producing up to 70,000 tons of fuel per annum as soon as practicable.

"The initial test results from the first production cycles at Ashland in June 2021 by the Wood Science and Technology Centre at the University of New Brunswick, announced on 2 September 2021, demonstrated up-to-date information on the quality of CoalSwitch fuel itself and its superiority to existing white pellets.

"It is frustrating that the failure of the monitoring component occurred at a time when the reference plant was increasing production volumes on a daily basis but, notwithstanding this, AEG and PDI were able to collect invaluable production and emissions data, technical know-how to assist in future production plant development, and produce sufficient volumes of CoalSwitch fuel for prospective customer testing."

Regulatory information

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR. 

ENDS

About Active Energy Group

Active Energy Group plc is a London listed (AIM: AEG) renewable energy company focused on the production and development of next generation biomass products that have the potential to transform the traditional coal-fired power industry and existing renewable biomass industry.

The Company has developed a proprietary technology which transforms waste biomass material into high-value renewable fuels.  Its patented product CoalSwitch is a leading drop-in renewable fuel that can be co-fired with coal, completely replace coal as an alternative feedstock without requiring significant plant modifications or replace existing biomass feedstock resources. Active Energy Group's immediate strategic focus is the production and commercialisation of CoalSwitch and further CoalSwitch fuel blends that utilise other waste wood and residual materials.

CoalSwitch is a registered trademark belonging to AEG plc.