AFC Energy PLC (AIM:AFC, OTC:AFGYF) has made significant strides in enhancing the efficiency and reducing the costs of its S-Series fuel cell system, according to Peel Hunt analysts.
These strides were demonstrated during the 30kW H-Power Generator Factory Acceptance Test (FAT) with Speedy Hydrogen Solutions in March 2024.
AFC reported a 16% reduction in hydrogen fuel consumption per kWh of power generated by the 2024 model 30kW generator, compared to the 2023 model 10kW Power Tower.
This improvement is expected to substantially lower operating costs for customers.
“Both reductions in capex and opex costs lower the total cost of ownership (TCO) of the fuel cell generators, which is seen as a key prerequisite to industry-wide adoption,” noted Peel Hunt analysts.
They continued: “Last year, field data suggested that AFC Energy’s H-Power Towers were, operationally, just 14% more costly than diesel generators based on European hydrogen prices, highlighting the importance of fuel efficiency in generator performance and reducing this cost gap.
“We expect to see further capex and opex cost improvements in the future, both through further value engineering optimisation, and especially when AFC Energy moves into higher-volume production of its generators.
Peel Hunt has a buy rating on AFC stock with a 125p price target.