AFC Energy Regulatory News (AFC)

23 June 2020

AFC Energy PLC

("AFC Energy" or the "Company")

AlkaMemTM Update

AFC Energy (AIM: AFC), a leading provider of hydrogen power generation technologies, is pleased to provide an update on AlkaMemTM developments since the beginning of 2020.

Highlights

· Successfully scaled up and validated AlkaMemTM membrane within a commercial sized HydroX-Cell(S)TM fuel cell.

· Excellent power density maintained utilising scaled up AlkaMemTM membrane, reflecting performance seen amongst alternative high-density fuel cell technologies.

· Developing methods for enhanced mechanical stability of the AlkaMemTM membrane to meet wider industry applications.

· Initial small scale AlkaMemTM samples sold for comparative validation to commercial and research institutions in Europe with an emphasis on alkaline water electrolysis applications.

· Preparing for further small-scale membrane samples dispatched to European institutions next month.

· Initial review of third-party membrane base film suppliers highlights likely cost advantages to alternative membrane base film technologies in the market today.

AFC Energy has continued the development of its AlkaMemTM anion exchange membrane during the early part of 2020 into the COVID-19 lockdown with the initial dispatch of small-scale membrane samples for validation within new commercial alkaline water electrolysis applications.

Whilst AlkaMemTM has, in varying thicknesses, application across multiple non-fuel cell applications, the focus of development work over the course of the first five months of 2020 has been on the 20µm series for use within the Company's HydroX-Cell(S)TM fuel cell stack. In developing the membrane for one application, there is clear cross over benefit for use in other third-party applications.

AlkaMemTM has continued to show strong operational performance and the ability to scale this into a single commercial scale fuel cell now means efforts can go into the design and engineering of the HydroX-Cell(S)TM fuel cell stack.

The Company has consolidated its membrane team with new recruits from a mixture of PEM fuel cell / engineering backgrounds and are building an expert team across the anion exchange membrane technology field, now reporting directly to the Company's Chief Operating Officer.

New manufacturing techniques are presenting options to further enhance the mechanical strength of the membrane, which will be particularly relevant to future alkaline water electrolysis applications and for manufacturing scale up. To date, the prospects for membrane stability look promising based on the manufacturing processes developed at AFC Energy's head office in Surrey, UK.

Adam Bond, Chief Executive Officer at AFC Energy, said "the AlkaMemTM product series continues to gain traction with industry and academia and we are delighted to have commenced additional third party membrane validation activities, in addition to that already conducted with De Nora. The growth in high-density fuel cell systems, such as our HydroX-Cell(S)TM platform, alongside the cost and scaling benefit of alkaline water electrolysis means the adoption of AlkaMemTM has the potential to be a key enabler of both systems in the fast growing Hydrogen economy".

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About AFC Energy

AFC Energy plc is commercialising a scalable alkaline fuel cell system, to provide clean electricity for on and off grid applications. The technology, pioneered over the past twelve years in the UK, is now being deployed in electric vehicle chargers, off-grid decentralised power systems and industrial gas plants as part of a portfolio approach to the decarbonisation of local electricity needs.