14 July 2014
AFC Energy plc
("AFC Energy", "AFC" or "the Company")
MOU signed with Chang Shin Chemical for up to 5MW fuel cell power system
Agreement is the first significant breakthrough into the South Korean market to produce clean energy for grid supply
AFC Energy plc, the industrial fuel cell power company, is pleased to announce that it has signed a Memorandum of Understanding (MOU) with Chang Shin Chemical Co., Ltd ("Chang Shin"), a leading South Korean hydrogen supplier, for multiple fuel cell systems with a total potential generating capacity of up to 5MW.
This is the first commercial agreement signed by the Company in South Korea, one of the world's fastest growing markets for large scale, stationary fuel cell power generating systems.
AFC will harness hydrogen produced at Chang Shin's chemical works to generate clean energy with zero carbon emissions. The power will then be delivered into the South Korean electricity grid, thereby enabling Chang Shin to diversify its revenue stream and achieve greater value from its hydrogen.
In line with AFC's strategy, the deal will be structured as an energy supply contract under which it will install and operate its low cost fuel cell systems at Chang Shin's sites in return for long term fees. The agreement will be implemented in stages, the first of which will be a pilot KORE fuel cell unit at one of Chang Shin's gas processing facilities. Following evaluation from both AFC Energy and Chang Shin the intention is for the pilot unit to be scaled up to systems with an envisaged capacity of between 1 MW and 5MW. Importantly, Chang Shin estimates it has total available hydrogen for power generation significantly in excess of 5MW.
AFC and Chang Shin will work towards finalising a definitive contract within six months from the date of the MOU.
Ian Williamson, CEO AFC Energy, said: "This agreement is the first step towards a potentially major long term collaboration with Chang Shin. We have made this important breakthrough into South Korea just as this country's demand for fuel cell systems is set for strong growth. We look forward to working with Chang Shin and expect to clinch further new business in this market in the near future."
Sang Do Bae, Chairman of Chang Shin, said: "We are delighted to collaborate with AFC Energy to utilise their fuel cell systems in an environmentally friendly and sustainable process. It will enable us to harness our supply of hydrogen to generate saleable clean energy and meet stringent government regulations. It is our hope that this initial agreement will lead to the deployment of fuel cell systems in multiple Chang Shin plants in due course."
South Korea is one of the Company's key target markets, where fuel cells are being adopted rapidly by industry and utilities to reduce reliance on imported fossil fuels. Whereas the country is poor in natural resources, it has an abundance of available hydrogen and syngas that is produced as a byproduct by its large chemicals industry. In addition, demand is also being driven by South Korea's comprehensive incentive regime to boost the use of clean energy from fuel cells by large-scale producers and users of electricity.
Ends
For further information, please contact:
AFC Energy plc Ian Williamson, Chief Executive |
+44 (0)1483 276726 |
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Peat & Co. - Corporate Broker Charlie Peat |
+44 (0)20 7104 2334 |
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Allenby Capital - AIM Nominated Adviser Jeremy Porter, James Reeve |
+44 (0)20 3328 5656 |
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Luther Pendragon - Public Relations Adviser Neil Thapar, Alexis Gore, Alex Burr and Andy Johnson |
+44 (0)20 7618 9100 |
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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 Chang Shin Chemical
Founded in 1989, Chang Shin Chemical Inc. is a high-pressure gas production (Liquid CO2, dry ice and hydrogen) company specializing in the safe production and supply of ultra-pure gases. The South Korean company and its affiliates have plants in Daesan, Yeosu and Naju. It has a 4,300-tonne storage facility for Liquid CO2, and a nationwide transport network serviced by a fleet of road tankers Liquid CO2 and 49 tube trailers (to be expanded to 100 by 2017) capable of holding 200 kg each.
Chang Shin has developed an optimal supply system to provide products to its customers in the safest and most economical way. Chang Shin will continue to strive to exceed its customers' expectations through continuous research and development in the gas industry and is putting every effort into expanding its reach in local and global markets.
