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ACTA bidding to revolutionise parts of power sector

Published: 11:26 27 Jun 2014 BST

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Revising GCSE physics and chemistry with my 16-year-old son was ideal preparation for this cornerstone article on a unique hydrogen energy company called ACTA (LON:ACTA).

Much has been scribbled in the past decade about the use of the gas as an alternative to the fossil fuels currently turning the upper reaches of the atmosphere into a greenhouse.

Only today is fuel cell technology being taken seriously as a commercial proposition.

PlugPower’s landmark order from WalMart to supply the world’s largest retailer with fuel cells for its fork-lift trucks bears witness to this.

However, ACTA’s technology is less about fuel cells and more focused on energy storage, which is why its units have been dubbed hydrogen batteries.

The core intellectual property is the ACTA hydrogen generator and in particular the very effective electrolyser that helps turn water and electricity into hydrogen.

That storing of the gas, held in traditional steel bottles, is then converted back into electricity and water, when needed, using fuel cells.

The group has successfully created smaller units that produce 100-200 litres per hour that could produce enough electricity to run railway signals.

And then there are the larger pieces of kit generating up to a cubic metre of hydrogen every 60 minutes that can be used as standby generators for stations at the base of telephone masts.

These are reasonably discreet plants (the largest is around the size of an American-style upright fridge-freezer) that run on mains electricity and can consume tap or rain water.

As back-up power units they could displace the traditional diesel gen-sets, which are expensive, often unreliable and prone to vandalism.

This power generation offering is gaining traction with mobile communications firms.

They work particularly well in emerging economies where access to the grid is patchy, or where it is non-existent.

So, for example, power generated by the sun can be stored as hydrogen, which then can be converted back to electrical power when it is needed.

It is worth stressing that ACTA is well beyond the prototype phase and has five live field trials ongoing where these large telcos are paying the going rate for the larger units that come in at 30-40,000 euros each.

As well as being greener than the conventional diesel back-up units, ACTA’s technology is also cheaper.

So for a mobile phone company, where a significant portion of its costs might be tied up in fuel payments, the ACTA units should offer a solution.

Finance director Paul Barritt reveals the group is in talks with funders that could help it provide a lease option.

“We think our application can revolutionise parts of the infrastructure that are off grid and are in bad grid environments,” says Barritt

“It won’t happen overnight and in fact it is happening a little more slowly than we would like, but it is happening.”

While back-up power is a huge market – currently valued at US$2bn a year – the renewable energy (US$10bn) and industrial gases (US$5bn) sectors dwarf this source of business.

There are applications for the technology in the emerging electric vehicle market too.

“We are not interested in the large centralised refuelling systems; we are interested in the five-car-a-week for municipal or small commercial operation,” says Barritt.

A report recently pointed to where the deployment of ACTA’s hydrogen units might find a market in the renewable sector here in the UK.

It revealed the government had paid the owners of Scottish wind farms £35mln last year to turn off turbines because Britain’s power network could not cope with the energy produced.

It’s thought those payments could balloon to £2bn by 2020 based on the growth of the sector.

So, having a means of storing surplus electricity then becomes an economic imperative.

It is worth noting the group is primed and ready for expansion when it comes, with a fully-fledged and scalable manufacturing operation in Pisa, Italy.

The recent update revealed ACTA had received a repeat order for 15 rack-mounted electrolysers from M-Field, one of its major customers and a maker of back-up units.

Ideally, the group would like to step away from manufacturing the big ticket items by simply supplying the hydrogen generation part of the kit.

“We think we would rather be shipping electrolysers than full systems; we would rather be Intel, the chip inside,” says Barritt.

“The natural position for us would be a component supplier up the value chain.”

The company’s broker Cantor Fitzgerald is predicting revenues of £1.6mln this year rising to £8.9mln in 2015.

Its price target of 13p a share – more than three times the current share price of 4.01p.

“Our conversation with management has given us some confidence that we are getting closer to an inflexion point for the company,” said Cantor analysts Caroline de La Soujeole.

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