AFC Energy, the industrial fuel cell power company, has provided an update to the market on the status on the company’s Joint Development Agreement (JDA) with Industrie De Nora S.p.A (De Nora).
De Nora, a multinational leader in sustainable technologies, and the largest producer of commercial electrodes for all major industrial electrochemical applications internationally, has been a key technology partner to AFC Energy since the second half of 2016.
The JDA collaboration, announced to the market in August 2016, was intended to target accelerated technological enhancements to AFC Energy’s fuel cell system, lower their cost of production and operation, and further progress the commercialisation of AFC Energy’s fuel cell technology platform.
AFC Energy has now performed more than 145 tests with De Nora using several configurations and different system specifications at its Dunsfold facilities, targeting specific variations to aspects of the fuel cell system design, utilising De Nora’s experience in the water electrolysis and chlor-alkali industry.
An expert team from De Nora, including recognised experts in electro-chemistry from Japan and Europe, have collaborated with AFC Energy’s team to deliver a number of material improvements to the AFC Energy fuel cell system.
As a result of these extensive tests, the company is increasingly confident that it is possible for AFC Energy fuel cells to exceed the company’s commercial life time target of 12 months. Several iterations of the fuel cells have shown a robust performance over extended period of time with a materially lower rate of degradation than previously experienced relative to the Gen2 system.
Importantly, based on the results obtained under the JDA, AFC Energy is now targeting a commercial life expectancy well in excess of 12 months and at a lower cost of delivery than earlier generations of its fuel cell. This increase in longevity is expected to materially reduce the cost of power produced and consequently, increase the potential market size of the AFC Energy fuel cell.
The improvements in longevity seen in the JDA tests are being integrated into the company’s current fuel cell stack design and AFC Energy plans to execute further longevity trials confirming the enhancements shortly.
These latest design modifications, revised stack engineering and the ability of AFC Energy’s fuel cells to use a lower grade hydrogen (H2) demonstrates the commercial progression of the AFC Energy fuel cell system with which the company will be able to penetrate its target markets. The Board believe that a material improvement in longevity, and associated reduction in cost of power will materially support a very competitive ‘total ownership cost’ to AFC Energy’s partners and projects.
Adam Bond, AFC Energy’s CEO, said, “I’ve been delighted with the progress both companies have made in progressing the respective work packages under the JDA. The collaboration has been first class and with the direction of travel we are now pursuing and advances made, particularly in the area of cell longevity, I’m confident that the results we are seeing will materially support our conversations with commercial project partners during the coming 12 months.”
In AFC Energy’s recent annual report and accounts for the year ended 31st October 2016, CEO Adam Bond referenced the three-year window set back in December 2014, when he first became CEO.
The three-year window represented a structured and transparent progression of AFC Energy’s fuel cell technology platform which sought to:
· Deliver the company’s first industrial scale plant in 2015;
· Incorporate refinements to the technology in 2016 in the form of the Gen2 programme which the company then took further by entering into a Joint Development Agreement (JDA) with Industrie De Nora; and
· Position the company to take full advantage of a greatly improved fuel cell technology platform and drive deployment opportunities in 2017.
In February 2017, AFC successfully raised a total of £8.1m ($10.2m) (before costs) through a placing and subscription, and open offer to existing investors.
Strong cash position
AFC Energy’s full year results to October 2016 had an operating loss before tax of £6.3m ($7.9m), against a forecast loss of £6.9m ($8.7m) and an actual loss of £8.6m ($10.8m) in the financial year 2015. Significantly net cash was strong at £2.9m ($£3.6m), which has subsequently been boosted by the recent £8.1m ($10.2m) fundraising.
AFC Energy has cash at bank of £9.1m ($11.4m) and is forecast to receive further cash installments during the next nine months of approximately £2m ($2.5m) from existing EU grant funding programmes and UK R&D tax credits.
Delivery of first commercial orders
Powerhouse Energy’s order confirmation for its first small-scale fuel cell system builds on a relationship with the company that spans several years.
The G3-UHt ultra-high temperature gasification demonstration unit has cleared UK customs and has been delivered to its initial recommissioning site near Manchester. Following the successful commissioning of the facility, a small-scale AFC Energy system will be installed to demonstrate the production of power from the H2 stream generated from the gasification unit.
Strengthened leadership team
AFC Energy has strengthened its executive management team with the recent appointments of Richard Tuffill as Chief Financial Officer and Jim Gibson as Chief Operating Officer.