Ceres Power PLC (LON:CWR) shares were up as the company announced the development of its first zero-emission combined heat and power (CHP) system, designed exclusively for use with hydrogen fuel.
The fuel cell specialist said in a statement that the hydrogen CHP is simpler than its existing fuel-flexible system, as it delivers an equivalent performance with fewer components and up to a 40% cost reduction, and it can be used in homes and businesses.
Industry experts expect the cost of hydrogen fuel cells to be as low as US$425 per kilowatt by 2030, while combined cycle gas turbines are currently priced at US$1,000/kW.
In initial testing, the hydrogen CHP system achieved over 50% electrical efficiency with potential to reach 90%.
“There is no greater challenge than achieving zero carbon emissions, and to meet it we have to find innovative solutions to decarbonise heat, power and transportation systems,” said Subhasish Mukerjee, director of fuel cell and stack development at Ceres Power, in the release.
“Ceres' new hydrogen CHP technology runs on both green hydrogen and more widely available low purity hydrogen from industrial sources, offering an immediate solution to tackling climate change and air pollution,” he added.
In a note to clients, analysts at City broker Liberum Capital commented: "The news is strategically significant because although its SOFC technology is fuel flexible the technology it has developed hitherto, and has licensed to Bosch, Weichai, Miura and Doosan, have been designed run on natural gas."
They added: "The development of a clean hydrogen play is one of two areas we have been hoping Ceres would develop without stretching resources. The other area is SOFC electrolysis - reverse fuel cells for the production of hydrogen from renewable energy. SOEL features make this technology very attractive for hydrogen production when a high-temperature heat source is available such as the steam from a nuclear reactor or chemical processing plant or the heat from a geothermal power unit.
"Also the technolgy has the potential to have class-leading energy conversion efficiency and does not need to use potential scarce platinum group metals for catalysis as PEMELs do. However, SOEL technology is much less mature than Alkaline electrolysis which have been in commercial use since the 1920s and PEM systems which have been installed in the last 5 years."
Liberum repeated a 'buy' rating and 300p price target on Ceres Power shares.
Shares were up nearly 1% to 211p in early afternoon trade.
-- Adds broker comment, updates share price --