28 October 2019
AFC Energy PLC
("AFC Energy" or the "Company")
Pre-Close Operational Update - October 2019
AFC Energy (AIM: AFC), the industrial fuel cell power company, is pleased to provide its Pre-Close Operational Update ahead of its year end on 31 October 2019.
Highlights
· Hydrogen powered 72kWh, off-grid Electric Vehicle ("EV") charging system on target for commercial launch in December 2019.
· Shareholders to be invited to an EV charger open day at Dunsfold Park (details to follow).
· Agreement signed with an international Original Engineering Manufacturer ("OEM") to assess "Ammonia to Power" off-grid platform.
· Electrode pairing demonstration achieves milestone 10,000 hours of continuous operation
· First batch of mass manufactured flow plates received from Advanced Plastics, strengthening supply chain.
· Commercial sales coverage and contact with new EV operators and users has been initiated.
· High power density alkaline fuel cell demonstration successfully achieves market leading power density output with prospect to open up new commercial applications.
· Appointment of former Rolls Royce Fuel Cell Systems and LG Fuel Cell Systems Chief Technical Officer, Dr. Gerry Agnew, as Non-Executive Director.
· New Company website scheduled for release in November 2019.
Hydrogen Fueled EV Charger
The global EV market is experiencing rapid growth in-line with international agendas to drive the decarbonisation of the transportation sector. Last month at the Frankfurt Motor Show, new EVs entering the market showed strong adoption of rapid charging with average charge rates now extending beyond 100kWh, increasing the need for fleet and commercial operators to access new rapid EV charge capacity.
Last week, the findings of a Capital Economics Report commissioned by UK electricity network operator, Scottish Power, confirmed that the UK will need to invest close to £100bn in new grid infrastructure and EV charge points in order to achieve its 2050 Net Zero policy objectives.
These, and other statistics continue to validate and confirm the market opportunity that AFC Energy is currently seeking to address through its off-grid portfolio of Hydrogen Power Generation products. The challenge now lies in the ability for the charging infrastructure market to respond with rapid charge points that can be independent from the operation and availability of the local grid. Earlier this year, the UK witnessed just how fragile the nation's grid and power supply can be when stressed with generation shortfalls at peak times.
AFC Energy is working with Europe's largest manufacturer of EV charge points, Rolec Services, to present the market with an initial 72kWh off-grid hydrogen fueled EV charger capable of operating at strategic demand points across the UK where the grid cannot reliably meet current or future EV charge demand. In particular, AFC Energy plans to target multi-user sites such as fleet operators, car parks, shopping centres and other off grid applications. To this end, depending on the utilisation rates required by customers, the system can be readily scaled from 72kWh up to 288kWh through an increase in the integrated energy storage capacity of the off-grid charger with our partners, MSP Technologies.
The system will be capable of operating at fast charge rates with the demonstration scheduled to integrate two dual cable pedestal charge points.
Earlier this year, AFC Energy announced it had delivered an early prototype EV charger unit at its Surrey head office, taking power generated from AFC Energy's fuel cell large scale testing units for the purpose of charging vehicles. Since then, work has focused on delivery of a mobile off grid EV charger unit which will be on demonstration at several locations across the UK.
A key selling point of the system is its scalability with both storage and hydrogen generator options scalable to multi-MW capacity. The Company sees fleet and large multi-user customers demanding a significantly higher rated system to meet these fast charging requirements in turn resulting in larger fuel cell systems. AFC Energy's sales team is fully engaged in responding to expressions of interest from potential users of the charger.
Shareholders, partners and customers will shortly be invited to an Open Day to see the EV charger at Dunsfold Park in operation.
Strengthening of Supply Chain
AFC Energy's latest generation hydrogen power generation unit adopts the latest developments in flow plate design and electrode chemistry. Whilst De Nora, AFC Energy's technology and electrode partner, can deliver initial electrode requirements for the EV charger unit (and other applications), an investment by AFC Energy in new tooling and assembly has already been made to increase and improve our flow plate manufacturing capability and integration capacity for De Nora manufactured electrodes.
Moulding tools were ordered through our flow plate manufacturing partner, Advanced Plastics, a few months ago and we have now received initial moulded plates with quality assurance and controls currently being applied to the outputs of the initial production. So far, the results of the initial trials have been satisfactory.
In addition to the manufacture of the plastic moulded plates, AFC Energy has been working with the UK's leading ultra-sonic welding supplier to ensure the robust integration of electrodes into the flow plates - something which historically took several minutes per plate is now measured in seconds. This activity has resulted in the purchase of AFC Energy's own friction-welding tool to be used in the manufacture of our fuel cell systems.
Finally, we are concluding work with Innomech on the fuel cell compression equipment which is scheduled for delivery and will build on earlier stack compression equipment utilised in previous iterations of the AFC Energy fuel cell stack.
With this investment in compression equipment, electrode integration systems and new injection moulding tools and with the necessary processes now in place, AFC Energy will be capable of responding to system orders with improved order lead times.
"Ammonia to Power"
AFC Energy has previously reported on the successes it has achieved in delivering a fuel cell system capable of adopting cracked ammonia as its basic fuel without CO2 and the need for costly clean up or gas processing. Using ammonia in place of normal hydrogen delivery methods affords several benefits:
1. Ammonia is readily available and has cost advantages;
2. There are existing logistics and supply chains already in place to deliver large volumes of ammonia to end users;
3. The energy density of ammonia compared with hydrogen gas is far superior, meaning less logistical complexity and trips are required to deliver the same quantum of energy in the form of ammonia versus direct hydrogen - supporting it's cost competitiveness; and
4. AFC Energy's alkaline fuel cell can uniquely accept cracked ammonia (nitrogen & hydrogen including the residual "Parts Per Million" of ammonia) to the fuel cell.
AFC Energy has recently commenced a process to engage with supply partners to enable a cracker system and fuel cell to be supplied as a unit.
The Company has received several expressions of interest from third party engine manufacturers and OEMs in regards the Ammonia to Power system. This has in one case led to the signing of an agreement with an international OEM who has commenced work with AFC Energy on a confidential basis to further explore this value chain.
De Nora Electrode Joint Development
AFC Energy recently announced the significant progress made under the Joint Development Agreement with Industrie De Nora in advancing the longevity and performance of electrodes for use in AFC Energy's fuel cell system. The electrode testing which commenced over 12 months ago remains in operation to this day and has delivered in excess of 10,000 hours of continuous service, giving us ever growing confidence in the Company's ability to achieve longevity targets.
The testing, which was initially conducted on a small-scale test stand, is being replicated on a full-scale electrode pairing with over 3,000 hours of continuous operation now mirroring the performance of the smaller scale electrodes. As a step forward for the Company in its progression to commercial deployment, the relevance of this should not be underestimated.
AFC Energy and De Nora have further extended their joint commitments under the Joint Development Agreement with ambitious aims for further advances in electrode technology and continuing cost reductions.
High Power Density Fuel Cell Development
The Company commenced work two years ago on the development of a high-power density ("HPD") alkaline fuel cell system capable of increasing the amount of power from a single cell by up to 5 times that of current technology.
Since the Company's AGM earlier this year, further progress has been delivered with evidence now supporting the new HPD fuel cell's ability to deliver power density equal to or greater than alternative technology platforms currently used in transportation and other small footprint systems.
Key here is that the system remains alkaline in nature and, unlike alternative high-power density cells, can accept a lower purity Hydrogen which directly reduces operating fuel costs.
Further details pertaining to the Company's HPD alkaline fuel cell will shortly follow.
Adam Bond, AFC Energy's Chief Executive, said "I am delighted to see the technology development, supply chain procurement and go to market strategy now coming together in a way that will allow AFC Energy to deliver on its various commitments to shareholders over recent years. "In working through the technology and manufacturing challenges, we now have a formidable and market competitive fuel cell which can compete against incumbent fuel cell technologies in terms of emissions, cost and performance."
"The Company's new hydrogen fueled EV charger is the focus of our business for the remainder of this year and will set the benchmark for sustainable, off-grid and reliable power supply to an industry whose size is estimated to be near £100bn in the UK alone. Alongside the wider catalogue of systems being preparing for deployment, AFC Energy is as confident as ever of the opportunities we and our world class partners are creating within the emerging Hydrogen Economy".
For further information, please contact:
AFC Energy plc Adam Bond (Chief Executive Officer) |
+44 (0) 14 8327 6726 |
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WH Ireland - Nominated Adviser and Joint Broker Mike Coe |
+44 (0) 117 945 3470 |
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M C Peat & Co LLP - Joint Broker Charlie Peat |
+44 (0) 20 7104 2334 |
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Tuva Partners - Public Relations James Kennedy |
+44 (0) 7809 495 759 |
About AFC Energy
AFC Energy plc is commercialising a scalable alkaline fuel cell system, to provide clean electricity for on and off grid applications. The technology, pioneered over the past twelve years in the UK, is in the process of being deployed in electric vehicle chargers, off-grid decentralised power systems and industrial gas plants as part of a portfolio approach to the decarbonisation of local electricity needs.
