Itm Power Regulatory News (ITM)

2nd November 2010

ITM Power plc

("ITM Power" or "the Company")

High Power Density Fuel Cells

ITM Power (AIM: ITM), the energy storage and clean fuel company, and the Carbon Trust, are pleased to announce Carbon Trust grant funding of £108,000 towards the development of the Company's materials for application in automotive fuel cells.

ITM Power has demonstrated exceptionally high power densities by developing its proprietary hydrocarbon membrane materials for hydrogen/oxygen fuel cells. A step change from the current state of the art has been achieved, with what is believed to be the highest power density ever recorded for a PEM fuel cell (5.5W/cm2 and 10A/cm2).

The Carbon Trust is providing a technology development grant towards a five month project which aims to demonstrate the performance of the same family of materials in a hydrogen/air fuel cell. ITM will also benefit from accessing the Carbon Trust's knowledge of the fuel cell sector and global industry network.

ITM Power has been developing its hydrocarbon membrane materials for several years for use in electrolysers and hydrogen/oxygen fuel cells. The recent achievement of this outstanding fuel cell power density is evidence of the exceptional performance that ITM Power materials can achieve. State-of-the art cost modeling approaches - including a recently developed analysis by the Carbon Trust - show that increases in power density offer the greatest opportunity for fuel cell system cost reduction, highlighting the potential of ITM Power's unique offering.

ITM Power's previous fuel cell research has focused on the use of hydrogen and oxygen to harmonise operation with the Company's electrolyser products for energy storage. A commercial system for a vehicle however requires air to be used as the oxidant. The initial target for this project is to achieve an ambitious 1.5W/cm2 on air.

The drive of this project is to build on current laboratory results to establish a solid foundation from which the potential for ITM Power's materials to offer a step-change in the cost of automotive fuel cells can be pursued. The project will examine sensitivities against primary operational variables and seek to reduce technical risks associated with adoption of a new membrane technology in the automotive sector. Specifically, work packages will examine relationships between power density, catalyst loading, humidity, temperature, stoichiometry and longevity. Impacts on the fuel cell cost structure will be evaluated via the Carbon Trust's existing cost model.

ITM Power's record power density performance was first brought to the attention of the Carbon Trust through the Polymer Fuel Cells Challenge (PFCC). The PFCC is an investment initiative led by the Carbon Trust to accelerate the commercialisation of breakthrough polymer fuel cell technologies which could enable a step-change in cost reduction, unlocking mass-market penetration and large-scale carbon savings. The project announced today stems from the PFCC and will pursue these goals. Further announcements related to the PFCC will follow in the coming months.

In order to ensure effort is directed most effectively, ITM Power is now seeking partnerships with commercial end users to provide input to the development process. A successful project would provide a pathway towards continued development and qualification of ITM Power's materials as a commercial alternative to the existing membrane materials currently utilised in automotive fuel cell applications. In this context, this project is considered a first step in the process of justifying a more comprehensive onward development programme with OEM commercial partners.

A summary of the power density performance achieved by ITM's patented membrane technology has been published today on the Company's website at:

http://www.itm-power.com/cmsFiles/investors/CarbonTrust_GrantAward.pdf

Commenting for ITM Power, CEO Graham Cooley said: "Our fuel cell membrane development has continued in the background over the last 18 months, laboratory results have been outstanding and we believe show an attractive route to significant cost reduction via miniaturisation. During the same period we have been developing our relationships with the key strategic funding bodies in the UK and I believe that this acknowledgement of ITM Power's progress by the Carbon Trust is a significant step for the Company. This grant constitutes the qualification of the Company's membrane materials for use with air, jointly with the Carbon Trust, with a view to gaining partnerships in the automotive industry. We will report technical results to the market upon project completion."

Pierre Gaudillat, Research and Development Manager, Carbon Trust added: "We have been very impressed with ITM Power's rapid development towards higher power density fuel cells, which could unlock access to mass markets through lower-cost, higher-performing products. The Carbon Trust is keen to take part, at this early stage, in building a British base of low-carbon technology with world class performance and the potential to reduce carbon emissions on a global scale. The Carbon Trust is very pleased to support ITM Power's leading developments and offer assistance in establishing strategic relationships."

About the Carbon Trust:

The Carbon Trust is a not-for-profit company with the mission to accelerate the move to a low carbon economy, providing specialist support to business and the public sector to help cut carbon emissions, save energy and commercialise low carbon technologies. By stimulating low carbon action we contribute to key UK goals of lower carbon emissions, the development of low carbon businesses, increased energy security and associated jobs.

We help to cut carbon emissions now by

·; Providing specialist advice and finance to help organisations cut carbon

·; Setting standards for carbon reduction

We reduce potential future carbon emissions by

·; Opening markets for low carbon technologies

·; Leading industry collaborations to commercialise technologies

·; Investing in early stage low carbon companies

About ITM Power:

ITM Power designs and manufactures Hydrogen Energy Systems for Energy Storage and Clean Fuel production.

ITM Power is committed to clean sustainable energy solutions based around water electrolysis. Our principal motivation is to engineer zero-carbon hydrogen energy systems that provide energy security and independence from fossil fuels.

ITM Power's electrolyser and fuel cell technologies have the potential to become the cornerstones of a future hydrogen economy based on 'green' hydrogen. Our hydrogen systems are able to convert renewable energy to a clean fuel that can be indefinitely stored for use in transport, residential and industrial applications.

ITM Power has grown from its original platform of novel polymeric electrolytes (for water electrolysis and hydrogen fuel cells) to that of a technology provider. ITM Power now has both a strong base of intellectual property and engineering expertise for providing complete hydrogen solutions.

For further information please visit www.itm-power.com or contact: