AFC Energy Regulatory News (AFC)

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6 December 2017

AFC Energy PLC

("AFC Energy" or the "Company")

First Commercial Electrode Order by AFC Energy with De Nora and Fuel Cell Technology Update

AFC Energy (AIM: AFC), the industrial fuel cell power company, provides an update on its progress towards delivery of a commercial alkaline fuel cell system.

Highlights

· First commercial order of cathodes placed by AFC Energy with Industrie De Nora ("De Nora") to initiate the mass manufacture of electrode capability and to ensure quality controls are in place to ensure consistency with smaller scale testing - first delivery expected by mid-December 2017.

· Recently completed design refinements and on-going testing of alkaline fuel cell electrodes with De Nora suggests at least a 12-month electrode longevity at AFC Energy's facilities in Surrey - achieving the target set for 2017.

· Scale-up and integration of cathodes designed with De Nora now achieved, with operational data being collected by AFC Energy within its fuel cell stack units in Surrey.

· Final design and drawings for fully revised fuel cell stack configuration completed, integrating the new cathodes developed with De Nora, after extensive simulation engineering and interrogation by our technical teams.

· Full system demonstration expected by mid-December 2017 incorporating enhanced stack flow plates, cartridge and associated materials.

During this quarter the Company has been finalising engineering and design work, incorporating scaled-up integration of the preferred cathode and anode developed with De Nora for the AFC Energy fuel cell system. The cathodes delivered under the Joint Development Agreement with De Nora require slightly different operating conditions to the AFC Energy cathode which means adjustments needed to be made to the overall system - a large part of this work has been completed. The finalised specifications and drawings were signed off by AFC Energy recently and issued to fabricators for manufacture.

AFC Energy is now awaiting shipment of materials and parts from its suppliers to put the new design on test and provide further evidence in support of the fuel cell's performance and operating capability against the objectives set for this year. The Company will now focus on delivery of the fuel cell system in Surrey with expedited operational results expected before integrating the fuel cell stacks into AFC Energy's Stade facility in Germany early in 2018.

Adam Bond, CEO of AFC Energy, commented:

"We are pleased to have placed this order with our partner De Nora, and also with the results of the recent technical collaboration between teams from Italy, Germany, Japan and the United Kingdom. Importantly, all parties continue to believe there is scope for material improvements to further enhance fuel cell performance going forward."

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About AFC Energy

AFC Energy plc has developed and successfully demonstrated an alkaline fuel cell system, which converts hydrogen into "clean" electricity. AFC Energy's key project POWER-UP demonstrated the world's largest operational alkaline fuel cell system at Air Products' industrial gas plant in Stade, Germany. The Company is now looking to build upon an already established pipeline of commercial opportunities and drive the findings from the development phase of the technology into a technically optimised and commercially relevant fuel cell system. For further information, please visit our website: www.afcenergy.com