AFC Energy Regulatory News (AFC)

10 December 2014

AFC Energy PLC

("AFC" or the "Company")

25 Fuel Cell Stack Trial - Results

AFC Energy plc (AFC.L), the industrial fuel cell power company, is pleased to provide an update on the latest trial of its 25 fuel cell cartridge undertaken at its Dunsfold industrial park facilities.

Highlights:

· Latest 25 fuel cell stack trial outperformed both of the earlier trials

· A total performance improvement of 10.8% in electrical output relative to the first 25 cell stack trial

· Latest test represent large stride forward in validation of KORE system technology as a prelude to commercialisation next year

As context, a fuel cell requires a period of "warm up" from ambient temperature in order to achieve maximum operating performance. To date, AFC has accelerated this process by applying external heat sources to establish and maintain optimum fuel cell operating temperature. The ability to achieve the necessary levels of heat solely through fuel cell reactions in a relatively short period of time, as envisaged in the KORE system, will remove capital from the cost of the fuel cell system and improve the overall system efficiency (making it more affordable to produce and simpler to maintain and operate).

As outlined in AFC's RNS of 8 December 2014, the milestone this latest 25 cell stack trial sought to achieve was to confirm that cartridges can achieve operating temperatures (from ambient) using heat produced solely from fuel cell reactions without a loss in cell performance.

To date, AFC has successfully conducted three 25 fuel cell stack trials in 2014 using the same electrode configuration with the performance (voltage output) of each summarised in the table below. The performance of the second 25 cell stack trial (V3 CB 00070) was materially improved relative to the first (V3 CB 00067) by 6%.

However, as AFC has improved its understanding of the operability of its proprietary fuel cell (and its electrode chemistry), the most recent 25 fuel cell stack trial conducted at Dunsfold (V3 CB 00083) and which concluded in early December 2014 outperformed both of the earlier trials and produced the highest voltage output of any Beta-based fuel cell cartridge tested at AFC. In relative terms, the latest trial has given a total performance improvement of 10.8% in electrical output relative to the first 25 cell stack (V3 CB 00067).

For the first time, this latest trial (V3 CB 00083) was started with a self-heating strategy to demonstrate that fundamental design and operational aspects of the KORE system are robust and sound.

Table: 25 Cell Stack Performance

A key operating parameter of any fuel cell stack is the power-to-heat ratio. This ratio is very important for extending the lifetime of any fuel cell. As stacks get larger and more powerful, thermal management becomes increasingly more important. AFC's stack design employs a patent pending approach that simplifies thermal management by circulating the electrolyte through the stack which takes excess heat away from the fuel cells where it can then be effectively managed by simple heat exchange technology. Excess heat that is produced can improve system operation and importantly has the potential to target combined heat and power (CHP) applications.

The results of this latest 25 fuel cell stack have been very encouraging. The positive results from this trial will now allow AFC to freeze the electrode design and chemistry for the KORE system commissioning planned for mid-2015.

Adam Bond, AFC's Chief Executive Officer, said: "AFC continues to make large strides forward in the validation of its technology as a prelude to commercialisation. To deliver on the desired objectives for this trial whilst increasing output performance continues to raise confidence in the technology and in the execution of the KORE system next year."

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About AFC Energy

Founded in 2006, AFC Energy plc is re-engineering proven alkaline fuel cell technology to reduce the cost of electricity. Alkaline fuel cells have been used on US and Russian manned space missions for decades to provide electrical power and drinking water. By using platinum free, advanced materials, design tools and manufacturing processes at scale, AFC Energy is developing fuel cells that will compete with conventional technologies such as turbines for electrical power generation. Today, AFC Energy is pursuing opportunities in several sectors where hydrogen is readily available including the chlorine, clean coal and waste-to-energy industries as well as applications for distributed/back-up power. For further information, please visit our website: www.afcenergy.com.