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AFC Energy makes first commercial sale as hydrogen momentum builds

"Delivery of the small-scale system's basic engineering in such a tight timeframe is further validation of the decision to collaborate with our strategic partner plantIng," said CEO Adam Bond.

Fuell cell
AFC Energy's key project POWER-UP demonstrated the world's largest operational alkaline fuel cell system at Air Products' industrial gas plant in Germany

It may have taken longer than expected, but momentum behind the UK's hydrogen economy is becoming “increasingly real", according to AFC Energy’s chief executive Adam Bond.

To back up his assertion, the hydrogen fuel cell specialist has just landed a first commercial order with erstwhile partner PowerHouse Energy PLC (LON:PLC).

The two companies have been working on a beta version of a hydrogen gasification system since 2014 and Powerhouse’s G3-UHt unit will provide a hydrogen stream from which AFC’s fuel cells can produce electricity.

Powerhouse is to set up a demonstration version at the Thornton Science Park in March, with AFC scheduled to deliver the fuel cells in about eight months time to showcase the benefits of a hydrogen power system.

The G3-UHt unit will connect to the micro-grid supplying power to the Park. Its USP is that by working at super high temperatures it converts all household or industrial waste into syngas.

PowerHouse anticipates this will produce a high quality hydrogen stream (a component of the syngas produced) that will successfully integrate with AFC’s fuel cell to provide power through electrolysis in the fuel cells.

Bond added: “The successful integration of these two technologies could create significant new markets in clean distributed power generation and continue to grow the increasing prominence of the hydrogen economy in the UK and overseas.”

Industrial applications

Up until now, AFC has been focused on waste hydrogen produced by the chlorine industry a way to generate power, which as well as being sold into the grid also helps to power the plant.

Its KORE System is now commissioned and producing power through a demo plant at Stade in Germany.

AFC reckons that the waste hydrogen generated by the chlorine and caustic soda industry could support over 3,000 MW of capacity, providing nearly 20% of the industry's power needs.

Elsewhere overseas, AFC has early stage development agreements in South Korea, Thailand and Dubai.

In August, it also signed a joint development agreement (JDA) with an Italian firm called Industrie De Nora.

UK momentum building

As Bond notes, UK momentum too is building. Last year AFC started work with Peel Environmental on a clean fuel option for the Protos business Park in the North-West of England and close to Chester where the Thornton Science Park sits.

Powerhouse and AFC, meanwhile, started working together on small systems in 2014, but are now in a position to move forward with plans to demonstrate the integration of the technologies for the first time.

Well-heeled backers

As is common with companies at this formative stage of its development, AFC was loss-making – to the tune of £4.8mln after tax in the 12 months to 31 October. It generated income of £2.3mln, mainly from EU grants.

But AFC has deep-pocketed backers, notably Chelsea FC owner Roman Abramovic’s vehicle Ervington, and in March the company completed a £8.1mln funding earmarked to meet the commitments through the tie-ups with De Nora, Peel Environmental and at Stade.

Broker Cantor said while it has lowered its target price to 68p from 77p due to the funding, it de-risks the evolution of the company and it is overall a positive outcome.

At 13.1p, AFC is valued at 45.6mln.

Quick facts: AFC Energy PLC

Price: 44.05 GBX

Market: AIM
Market Cap: £297.93 m

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