McPhy Energy, a leading developer of hydrogen-based solutions for industry and energy markets, continued to develop its disruptive technologies and recorded a first major commercial success in the first half confirming the relevance of its strategy.

By achieving these successes, the company has laid foundations for accelerating its expansion in an increasingly favourable market environment for new hydrogen applications.

First major contract in China

Within the framework of a long-term partnership with state-owned Hebei Construction and Investment Group Co., Ltd, McPhy Energy signed the first contract for €6.4m to supply a “Wind to Hydrogen” (“Power to Gas”) system for the monetisation of surplus energy generated by a 200mW wind farm site currently under construction in the Hebei province of China. This contract which will enter into force as soon as administrative authorizations have been received, provides for delivery in July 2016 with the equipment to be commissioned in January 2017.

A strategic commercial alliance

By becoming the exclusive supplier of ThyssenKrupp Uhde Chlorine Engineers, a world leader in chlor-alkali and hydrochloric acid electrolysis plants, for its high-pressure water electrolysis-based hydrogen generation equipment, McPhy Energy has opened up new prospects in the market for renewable energy storage for power-to-gas and carbon-free mobility applications.

Launch of a range of new-generation alkaline water-electrolysers

McPhy Energy entered into a technological partnership agreement with De Nora, the world’s leading provider of electrochemical products and services, to develop a range of new-generation alkaline water-electrolysers, more compact and responsive with an unrivalled lifespan, expanding its existing range of electrolysers.

Expansion of its hydrogen mobility offering

In the very promising market for hydrogen refuelling stations, McPhy Energy now proposes a complete range of solutions including production by water electrolysis, intermediate storage and vehicle hydrogen refuelling station pumps. The number of commercial opportunities recently opened up in France and international markets highlights the relevance of its expanded product offering.

All these factors have translated into a successful financial period for the company as McPhy’s revenue for the first half grew by 23%. This performance was driven in particular by the commercial launch of its subsidiary in Germany in the Energy market.

Ramping up commercial activity, as expected, will enable the company in this way to move forward from large-scale demonstration projects in the energy sector to its next phase of development.

On that basis, revenue streams from these subsidised projects that provided a means to validate the added technological and economic value of McPhy Energy solutions, will progressively phase out. Reflecting this shift, other ordinary income at June 30th, 2015 amounted to €1.6m (compared to €1.8m one year earlier).

The delivery of these pilot projects with approximately one half the cost incurred by the group, will result in a corresponding reduction in the level of its variable costs. In conjunction with rigorous management of structural fixed costs which offset significant investments undertaken to strengthen commercial teams (recruitment of 5 senior sales managers in H2 2014) operating costs are under control.

As McPhy Energy continues to invest in the development of its technological innovations and commercial deployment, it wishes to increase its financial flexibility and secure access to additional resources.

Outlook

In light of the relevance of its integrated offering of solutions and positioning in promising markets, McPhy Energy is ideally placed to capture growth opportunities. On that basis, the group has been qualified for several refuelling stations and a Power-to-Gas project, and possesses the financial resources to accelerate its growth.

In the H2 mobility sector, McPhy Energy will supply the hydrogen generator for a refuelling station in Woodside, California, to be commissioned in the second half.

The group is also positioned for several calls for tender, namely in France, where it is actively contributing to the HyWay project, for the installation of hydrogen refuelling stations in Lyon and Grenoble. The group is also involved in the deployment of hydrogen refuelling facilities in connection with the “Mobility Hydrogen France” plan providing for more than ten hydrogen refuelling stations between now and the end of 2016.

In the Energy market, McPhy Energy will complete production in the second half, in connection with the INGRID project, of equipment for storing hydrogen in solid form originating from renewable energy in Southern Italy. The company will also put into service the integrated solid hydrogen production-storage solution for the Petawatt® Energy - Electrygen Pty Ltd, an independent Australian developer and operator of sun, water and wind hydrogen energy production sites.