AFC Energy Regulatory News (AFC)

AFC Energy (AIM: AFC), a leading provider of hydrogen power generation technologies, is pleased to confirm it has successfully delivered and validated its first cumulative 100kW Liquid Cooled Fuel Cell ("S+ Series") with partner ABB E-mobility.

Highlights

· New S+ Series fuel cell stacks exceeded the cumulative 100kW target output over validation period

· New commercial agreement highlights first sale to ABB E-mobility and prospective sales pipeline 

· S+ Series fuel cells support potential for high power EV charging, critical back up and maritime applications 

AFC Energy has successfully delivered its first high performance, high power density liquid cooled fuel cells for independent validation as part of its Sales and Development Agreement with ABB E-mobility. The liquid cooled technology, referred to as the "S+" Series (as distinct from the Company's "S" Air Cooled technology) was delivered to Germany for independent validation in October 2022 and signifies AFC Energy's first entry into the high power density fuel cell market.

The milestone is the first of a two-stage development programme first announced November 2021 that will now see a modular 200kW high power fuel cell system scheduled for first operation later this year, which will be followed by product certification immediately thereafter. The state of the art 200kW hydrogen power generator unit (and battery system) will then be sold to ABB E-mobility. 

The modular fuel cell design was agreed with ABB E-mobility initially for high power EV charging, however ABB E-mobility have also identified critical back up power generation as a new prospective market for the S+ Series. The S+ Series platform will form the basis of the Company's market entry into maritime and larger scale off-grid and critical back up power markets.

With a strong focus on a reduced Total Cost of Ownership ("TCO"), AFC Energy has been working with state of the art manufacturing for low cost fuel cell technology. This first successful validation adopts a manufacturing philosophy considered as one of the pathways capable of delivering lowest cost fuel cell stacks. 

Validation of the S+ Series stacks were witnessed by representatives from ABB E-mobility, AFC Energy and German engineering house, IAV, at an independent IAV testing facility in Germany.

The validation saw the successful delivery of over 100kW of cumulative net power output from the stacks, exceeding contracted targets, and positions AFC Energy well as it enters into the next phase with ABB E-mobility to deliver on a modular hydrogen fueled, zero emission 200kW hydrogen power generator this year. 

Commercial Highlights and Agreement Modifications

Following successful S+ Series validation, ABB E-mobility and AFC Energy agreed to review and update the Sales and Development Agreement originally executed by the two companies in November 2021 (the "Agreement").

In early 2022, ABB E-mobility made a non-refundable payment of £2m to AFC Energy towards early stage development costs of the S+ Series fuel cell platform. Following review of the commercial arrangements between ABB E-mobility and AFC Energy, the two companies have agreed the following:

· ABB E-mobility has expressed an intention to invest a further £2m into AFC Energy by way of a subscription for shares in the Company replacing the subsequent payments due under the original contract.

· A volume discount on up to 10 x 200kW S+ Series fuel cell system sales to ABB E-mobility or its direct customers for a defined period of time.

· Following completion of the upcoming 200kW S+ Series deployment, which will now be fuelled exclusively on hydrogen, and receipt by AFC Energy of relevant product certifications, ownership of the system (including battery) will transfer to ABB E-mobility.

The sales pipeline of 10 x 200kW S+ Series fuel cell systems is eligible to be applied across sales of fuel cell systems (which are envisaged to include connected battery systems) to any division or controlled subsidiary of the ABB group and further highlights ABB E-mobility as a key strategic partner of AFC Energy.

Frank Muehlon, Chief Executive Officer of ABB E-mobility, said:

"AFC Energy is a key strategic partner for ABB E-mobility. We are pleased to have reached this first important milestone for our continued collaboration as we work on the transformation towards a sustainable mobility infrastructure."