AFC Energy, the industrial fuel cell power company, and Industrial Chemicals Limited (ICL) are pleased to announce that they have received notification that they have been awarded a European Union grant of up to €6m.

The grant will be used for the installation of the world’s largest alkaline fuel cell energy generation system at ICL’s chlor-alkaline chemical plant in Essex, UK.

The award is being funded by the Fuel Cells and Hydrogen Joint Undertaking (FCH-JU), through the EU’s Seventh Framework Programme (FP7). It will provide AFC Energy and ICL and their European project partners with more than four years’ financial support for the project. The grant is subject to final negotiation and, subject to agreement, is expected to be in place to enable the project to commence during Spring 2013. If concluded satisfactorily, AFC Energy will coordinate the project and expects its direct share of the project funding to be up to €3m (£2.45 m) with the balance to be received by the other project partners.

AFC Energy’s low cost alkaline fuel cell system will be installed in stages at the ICL owned and operated chemical facility and is eventually expected to generate approximately 1MWe (one mega watt of power, enough energy to power 500 homes). The chlor-alkali plant will manufacture chlorine and caustic soda that have a range of uses including in household cleaning products, detergents and water treatment.

Hydrogen produced as a waste by-product in ICL’s chlor-alkali process will be used to generate power using AFC Energy’s fuel cell system. The project is part of ICL’s integrated energy generation plan and is the largest fuel cell system announced for installation in the UK to date and is believed to be the largest alkaline fuel cell system announced anywhere in the world. Without this fuel cell system, waste hydrogen would typically be discharged into the atmosphere. Instead, ICL will be able to reduce dependence on the national grid for its energy needs by creating economic value from its hydrogen.

AFC Energy intends to supply fuel cell systems to ICL in stages during the grant funded project. The longer term intent is for AFC Energy to provide electrical power to ICL under an ESCO (Energy Supply Company) model whereby ICL will provide its hydrogen and purchase power under long-term contracts. AFC Energy will own, operate and maintain the fuel cell systems.

The project is expected to create a significant number of UK jobs in the long term and the stationary fuel cell industry is forecast to create 500,000 jobs globally over the next decade.

The project also includes work on automating the assembly of electrode stacks and the recovery and reuse of catalyst materials. Funding is also provided to publicise the project. AFC Energy and ICL expect to be able to announce further details in due course.

Commenting on the agreement Ian Williamson, Chief Executive Officer, said, “We are delighted that European funding has been identified to support this important project. I believe that this will help put European fuel cell technology and innovation on a global stage. I have previously emphasised our goal to move to a commercial demonstration phase for our technology and ICL have now provided the perfect opportunity for us to demonstrate cost effectiveness compared with other forms of power generation. Globally around 1.4m metric tonnes of hydrogen is produced by the chlor-alkali industry alone of which 15% is vented or flared when our technology could readily help the environment as well as create economic value.”

“The intended fuel cell installation at ICL will act as a showcase for the economic and environmental benefits of AFC Energy’s alkaline fuel cell.”

Based in Essex, ICL operates five manufacturing sites in the UK and one in the US operating up to 20 chemical manufacturing plants, handling more than one million tonnes of materials and over 300,000 tonnes of finished products per year.

Darren Sharpe, Energy Projects Manager of ICL, commented, “The relationship we have with AFC Energy goes from strength to strength. Our chlor-alkali plant is the first in the world designed to operate with alkaline fuel cell systems. Eventually we will generate up to 1MWe of clean electrical power from hydrogen that would otherwise be waste from the chlor-alkali process. This is exciting in terms of commercial savings on energy cost, distribution and supplier charges and being independent of the main electricity grid. ICL looks forward to working with AFC Energy and benefiting from the potential a large scale fuel cell system offers.”