Itm Power Regulatory News (ITM)

22 July 2013

ITM Power plc

("ITM Power" or the "Company")

Hydrogen Cost Structure Update

ITM Power (AIM: ITM), the energy storage and clean fuel company, is pleased to update the market one year since it last announced the cost structure of hydrogen generated by the Company's HFuel electrolysis platform on 18th July 2012. The cost structure can now be updated based on efficiency improvements, electrolyser cost reduction of its HGas platform and from data provided by Hyundai for the ix35 fuel cell electric vehicle (FCEV).

HGas 1MW (446kg/day) Generation Module:

A hydrogen generation module comprising sixteen HGas electrolyser stacks and associated balance of plant has been used in the analysis. In addition to capital cost and electricity consumption, the analysis includes an indicative annual maintenance cost and utilisation factor. The assumptions used are:

Generation capacity: 446kg/24hr

Amortisation period: 10 years

Electricity price: 3.5p/kWhr

Water price: 0.13p/litre

System efficiency: 55kWhr/kg

Annual Service: 5% of sale price

Utilisation factor: 70%

Hydrogen cost is projected at £4.19/kg, a 32.7% reduction from last year's £6.23/kg, within a 10 year capital amortisation period and £2.69/kg, a 22.9% reduction from last year's £3.49/kg, after capital amortisation.

The European cost targets for hydrogen generation are EUR9.90/kg (£7.92/kg*) in 2015 and EUR5.50/kg (£4.40/kg*) in 2025 (McKinsey: 'A portfolio of power-trains for Europe: a fact-based analysis'). The refuelling equipment is quoted separately and is typically tailored to the user's specific requirements. The costs associated with shipping the unit to site are not included as they are location specific.

* Assumed conversion rate of £1 = EUR1.25.

Increasing the utilisation factor to 100% reduces the hydrogen cost to £3.52/kg, a 29.6% reduction on last year's £5.00/kg, during a 10 year capital amortisation period and £2.47/kg, a 19.8% reduction on last year's £3.08/kg, thereafter.

Hydrogen Energy Hub

The key to a low hydrogen price is a high utilisation of assets combined with a low electricity price achieved by grid balancing payments. One way of achieving high utilisation is by combining Power-to-Gas energy storage with refuelling. Two 1MW energy storage schemes that have recently been bid by the Company are appropriately located to add a dispenser in order to offer FCEV refuelling. This concept of a Hydrogen Energy Hub is being actively developed.

Fuel costs per km comparison

As an example, the Hyundai ix35 FCEV has a hydrogen storage tank of 5.64kg with a driving range of 594 km or 0.95kg per 100 km. At a hydrogen price of £4.19 per kg that is a price of 4p per km. The diesel version of the Hyundai ix35 (2.0 litre CRDi 4WD) costs 7.9 pence per km based on a fuel consumption of 5.7 litres of diesel per 100km (source: combined cycle, Hyundai website) and a diesel price of 139.2 pence per litre (source: The AA).

ITM Power CEO, Graham Cooley, commented: "This represents a significant reduction in hydrogen cost. Hydrogen fuel is now more than competitive with fuel on the high street today. Combining Power-to-Gas energy storage with the provision of a transport fuel further improves the electrolyser utilisation and therefore the ultimate fuel cost."

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

About ITM Power

ITM Power plc was admitted to the AIM market of the London Stock Exchange in 2004 and raised its initial funding of £10m gross in its IPO. Further funding rounds of £28.5m in 2006 and £5.4m in 2012 have been completed. The Company has now made the transition from a research and development company to a product manufacturer and technology provider. The Company has both a strong base of intellectual property and engineering expertise for providing complete hydrogen solutions. The Company has been successful in developing strategic industry partnerships in the following projects:

·; Participation in French Hydrogen Infrastructure Programme

http://www.itm-power.com/news-item/participation-in-french-hydrogen-infrastructure-programme/

·; Membership of the Californian Hydrogen Business Council Hydrogen Energy Storage Program

http://www.itm-power.com/news-item/itm-power-joins-californian-hydrogen-business-council-hydrogen-energy-storage-hes-program/

·; German Energy Agency Power-to-gas Strategy Platform

http://www.itm-power.com/news-item/itm-power-joins-german-energy-agencys-power-to-gas-strategy-platform/

·; Incorporation of ITM Power ApS Denmark

http://www.itm-power.com/news-item/incorporation-of-itm-power-aps-in-denmark/

·; Participation in H2USA

http://www.itm-power.com/news-item/participation-in-h2usa/

·; Participation in North Sea Power-to-Gas Platform

http://www.itm-power.com/news-item/participation-in-north-sea-power-to-gas-platform/

·; First Sale of 'Power-to-Gas' Plant in Germany

http://www.itm-power.com/news-item/first-sale-of-power-to-gas-plant-in-germany/

·; First Sale in Russia

http://www.itm-power.com/news-item/first-sale-in-russia/

·; First Sale in Japan

http://www.itm-power.com/news-item/first-sale-in-japan/

·; Electrolysis to play a key role in Hydrogen Roadmap for UK

http://www.itm-power.com/news-item/electrolysis-to-play-a-key-role-in-hydrogen-roadmap-for-uk/

·; CE Marking of Fuel Cell System for Materials Handling

http://www.itm-power.com/news-item/ce-marking-of-fuel-cell-system-for-materials-handling/

·; EU Funding for Advanced Refuelling Project

http://www.itm-power.com/news-item/e3-59m-grant-award-for-an-advanced-refueling-product/

● AEG Power Solutions electrolyser integration with power electronics

http://www.itm-power.com/news-item/rapid-response-electrolyser-power-systems-integration/

·; DECC Funding Award for the Production of Synthetic Methane

http://www.itm-power.com/news-item/decc-funding-award-for-the-production-of-synthetic-methane/ 

·; EU Funding for PEM Fuel Cell Innovation - IMPACT

http://www.itm-power.com/news-item/eu-funding-for-pem-fuel-cell-innovation-impact/

·; Agreement with ABO Wind of Wiesbaden, Germany

http://www.itm-power.com/news-item/agreement-with-abo-wind-of-wiesbaden-germany/

·; Shell and National Grid Join Gas Inject Project

http://www.itm-power.com/news-item/shell-and-national-grid-join-gas-inject-project/

·; EcoIsland TSB Funding

http://www.fuelcelltoday.com/news-events/news-archive/2012/july/ecoisland-progresses-tsb-grant-awarded-for-isle-of-wight-integrated-hydrogen-project

·; 700bar Dispensing Collaboration in Germany

http://www.itm-power.com/news-item/700bar-dispensing-collaboration-in-germany/

·; Marks & Spencer Pilot Materials Handling Fuel Cell Project

http://www.itm-power.com/news-item/ms-agreement/

·; UKH2Mobility with leading auto OEM's, UK Gov't and industrial gas companies

http://www.itm-power.com/about-itm/partners/?id=49

·; EcoIsland with Toshiba, IBM, Cable & Wireless, SSE and Southern Water

http://www.itm-power.com/about-itm/partners/?id=46

·; Boeing Unmanned Aircraft System Refueller

http://www.itm-power.com/news-item/agreement-with-boeing/

·; Electrolyser Distribution with Horizon Fuel Cells

http://www.horizonfuelcell.com/fuel_solutions_hbox.htm

·; CREO with Ford, Jaguar Land Rover and Johnson Matthey

http://www.itm-power.com/about-itm/partners/?id=45

·; Exclusive European distribution rights for Materials Handling Fuel Cells

http://www.itm-power.com/news-item/exclusive-european-distribution-rights-for-materials-handling-fuel-cells/

·; Sale of Equipment to EADS

http://www.itm-power.com/news-item/sale-of-equipment-to-eads/

·; EU Grant Award for PEM Water Electrolysers Coupled to Renewable Power Sources

http://www.itm-power.com/news-item/eu-grant-award-for-pem-water-electrolysers-coupled-to-renewable-power-sources/

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