Active Energy Regulatory News (AEG)

Active Energy Group Plc: AEG / Sector: Alternative Energy

31 January 2022

Active Energy Group Plc

('Active Energy', or the 'Company')

First phase CoalSwitch™ combustion testing results from Utah

Active Energy, the AIM-quoted renewable energy business focused on the production of next generation energy pellets, is pleased to announce the results of the first phase independent combustion testing program conducted on CoalSwitch™ fuel in Utah, USA.

Highlights:

· CoalSwitch™ combustion testing results demonstrate the superior quality of the fuel over existing biomass fuels.

· The tests delivered the following key findings:

¾ CoalSwitch™ fuel delivered to Utah had an increased heating value of 9,313 British Thermal Units per pound (BTU/lb), which represents a 12.9% premium to traditional white pellets currently being produced for the biomass market;

¾ the CoalSwitch™ test results show a material reduction of Ash compared to burning 100% coal;

¾ the CoalSwitch™ test results show a significant reduction in Nitrogen Oxide (NOx) and Sulphur Dioxide (SO2) emissions compared to burning 100% coal;

¾ CoalSwitch™ can be used on its own as well as co-fired with coal in different ratios; and

¾ CoalSwitch™, both when blended and in its pure form, can be milled in an unmodified bowl mill and burnt in existing coal-fired burners without additional capital expenditure requirements.

· Prospective customers have been requesting this data in order to understand the full environmental and commercial benefits that use of CoalSwitch™ represents.

Michael Rowan, CEO of Active Energy, said:

"The results from the first phase of the ongoing combustion testing program of our CoalSwitch™ fuel represent an important milestone. With the assistance of the Brigham Young University, tests were carried out on the first tranche of CoalSwitch™ fuel which was produced from our reactors in Maine. These tests reconfirmed the beneficial properties of CoalSwitch™ which had been highlighted in former tests.

CoalSwitch™ continues to show its superior qualities over white pellets, including its hydrophobic properties, burning at higher heating values and reducing ash, nitrogen oxide and sulphur dioxide emissions. CoalSwitch™ offers a new pathway for heavy, hard-to-decarbonize industries in the US, which are increasingly pressured to reduce emissions and pollution. CoalSwitch™ provides a unique ability to achieve these goals without requiring costly, complex and yet-to-be-proven mitigation technologies like carbon capture. It would allow customers to "drop-in" our CoalSwitch™ fuel and see immediate and meaningful reductions in emissions and air pollution.

These initial test results have met our expectations for the future of CoalSwitch™, confirming it as an immediate co-firing solution for existing operations utilising coal. The test results add momentum to our current discussions with prospective long-term customers of CoalSwitch™ and production partners both in North America and worldwide."

Details of the Utah testing program

Background and testing process

The CoalSwitch™ fuel was produced from the waste wood residuals at the operating facility in Ashland, Maine and was delivered to Utah to undergo the first phase of the extensive testing program in Q2 2021. CoalSwitch™ was produced using Active Energy's proprietary steam beneficiation process instead of the existing alternate biomass production methods.

The primary focus of this phase of testing was to evaluate the burning and material handling properties of CoalSwitch™. The fuel was tested through a bowl mill, which operates at approximately 1 ton per hour, and subsequently tested in a pulverised coal research furnace operating at 1.3 megawatt of thermal output. The coal research furnace has a firing system and operational representation of full-scale utility boilers.

As part of this assessment, CoalSwitch™ was tested over a one-week period both on its own, as well as blended with Utah bituminous coal at various ratios. CoalSwitch™ and coal were milled, with the milled fuel blends subsequently used for combustion testing.

The testing was conducted in Utah by Brigham Young University, Rocky Mountain Power (a subsidiary of PacifiCorp), the University of Utah, Chalmers University of Technology and Reaction Engineering International. The program was funded independently through Rocky Mountain Power's Sustainable Transportation and Energy Plan (the "STEP Plan"). The STEP Plan decided to test the fuel through the coal-fired research furnace and the program was completed in Q4 2021. The concluding report was completed in January 2022.

Key results

The testing results are very encouraging for Active Energy and demonstrate that CoalSwitch™ is an immediate solution for coal-fired power plants that are seeking to reduce their emissions. The testing was completed using the first tranche of production grade CoalSwitch™ fuel from Maine. Active Energy expects that the results attained from this testing program will improve as subsequent tranches of CoalSwitch™ are produced.

The summary of findings from the report on the testing are as follows:

1. Cost efficiencies identified in the milling of CoalSwitch™

The primary measurements of interest were the power requirements of the bowl motor and the ability to blend both CoalSwitch™ and coal. The test results confirm that CoalSwitch™ can be milled in an unmodified mill with only small changes required to the mill settings. Further, there was also a material reduction in mill power requirements when milling the CoalSwitch™ fuel compared to the milling of pure coal or biomass blended fuels.

2. CoalSwitch™ has 12.9% higher heating value than white pellets

During combustion testing, the observed heating value of CoalSwitch™ fuel was 9,313 BTU/lb, which represents a 12.9% premium to traditional white pellets currently produced for the market by the Company's competitors, which underpins the economic value of CoalSwitch™.

The test data also provided that with a mix of 75% coal and 25% CoalSwitch™, the heating value was 11,807 BTU/lb, representing a 7% drop from normal coal burning values.

3. Use of CoalSwitch™ reduced ash by up to 77% vs coal

The tests showed significant reduction of ash deposition when CoalSwitch™ was used. When used on its own, CoalSwitch™ produced 77% less ash than coal. CoalSwitch™ / coal blends also resulted in a significant reduction of ash deposition, with higher CoalSwitch™ ratios producing less ash.

4. Use of CoalSwitch™ reduced NOx emissions by 20% vs coal

The tests showed significant reduction of NOx emissions when CoalSwitch™ was used. When used on its own, CoalSwitch™ generated 20% less NOx than coal. CoalSwitch™ / coal blends also resulted in a reduction of NOx emissions, with higher CoalSwitch™ blended ratios producing less NOx.

5. Use of CoalSwitch™ reduced sulphur dioxide emissions by 60% vs coal

The tests showed that burning pure CoalSwitch™ produced significantly less sulphur dioxide than burning coal. Blended ratios also produced significant reductions in sulphur dioxide emissions.

Continuing test program

The Company and Brigham Young University are planning to continue with the testing program of CoalSwitch™ and analysing the environmental benefits of consuming blended ratios of coal and CoalSwitch™ in existing coal-fired power operations.

The results from the continued testing program will be key in expediting the Company's goal of developing the next generation biomass fuels using sustainable resources and securing commercial partners and prospective customers.

Enquiries:

About Active Energy

Active Energy is a London-listed (AIM: AEG) renewable energy company that has developed a proprietary technology which transforms low-cost biomass material into high-value green fuel. Its patented product CoalSwitch™ is the world's only drop-in biomass fuel that can be mixed at any ratio with coal or completely replace coal in existing coal-fired power stations without requiring significant plant modifications. Active Energy's immediate strategic focus is the production and commercialisation of CoalSwitch™.