Powerhouse Energy Group PLC (LON:PHE) shares rose on Wednesday as the firm signed its first revenue-generating contract with its exclusive partner, Waste2Tricity Limited (W2T).
The firm said under the agreement, it would provide planning and engineering design services to W2T, that would lead to a build contract and license for use of its technology, known as DMG.
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DMG converts waste plastic and tyres to hydrogen gas which can then be used to generate electric power or charge hydrogen fuel cells used in cars and other vehicles.
PHE will provide site modelling and engineering services as part of the agreement, as well as defining the parameters of a front-end engineering design contract that would be placed with a third-party contractor.
The deal also included terms relating to PHE as the supplier of DMG to the site, covering design rights, build contracts and licensing of the technology.
Based on initial quotations, PHE said it expected revenues from the contract to be around £400,000 to cover costs.
The work will be undertaken at the Protos site, an energy hub located near Ellesmere Port in Cheshire developed by Peel Environmental, a subsidiary of leading UK infrastructure firm Peel Group. W2T and PHE signed a lease for a plot at the site last week.
Powerhouse added that the agreement was “another step” towards achieving financial close on the first commercial site using DMG technology.
David Ryan, PHE’s chief executive, said the agreement demonstrated that W2T “intends to place a formal order for DMG” when the initial planning work was complete.
He added that “more substantial revenues” would arise from intellectual property, design rights, licensing and operational engineering “in due course”.
In late morning trading, Powerhouse Energy shares were 4% higher at 0.52p.
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