Itm Power Regulatory News (ITM)

8 May 2014

ITM Power plc

("ITM Power" or the "Company")

ITM Power (AIM: ITM), the energy storage and clean fuel company, is pleased to announce the official inauguration this week of the Thüga Group's power-to-gas plant in Frankfurt am Main. The Company's translation of the Thüga Group's announcement is set out below. ITM Power delivered the PEM electrolyser, first ordered in March 2013, to the site in September 2013. The plant successfully injected the first ever electrolytically generated hydrogen into the Frankfurt am Main natural gas distribution network in December 2013. Final acceptance of the plant was achieved at the end of March 2014, which reflected the timely achievement of all milestones set. 

Thüga Group's Power-to-Gas plant officially commissioned and operational

• Successful Integration of the system into the energy landscape

• Politicians acknowledge the Thüga Group's commitment

• The plant will participate in the market for secondary control power

• The Fraunhofer Institute developed software for real-time control of the plant

• The Thüga Group calls for limited start-up funding for storage to help achieve commercial market (marketability)

Munich / Frankfurt am Main:

The development of storage technologies is one of the main challenges for the energy transition (Energiewende), if the integration of wind and solar power is to succeed. The companies involved in this innovative project are making a significant contribution" the Hessian Minister of Economics, Tarek Al- Wazir said at the commissioning of the power-to-gas demonstration plant at the site of Mainova AG in Frankfurt.

At the end of last year, the plant injected hydrogen for the first time into the Frankfurt gas distribution network becoming the first plant to inject electrolytic generated hydrogen into the German gas distribution network. "The combination of renewable electrical energy and smart grids together with storage form the backbone of the Energiewende." Eveline Lemke, Rhineland-Palatinate Minister of Economic Affairs said, "I am pleased that the four participating companies from Rhineland -Palatinate are accumulating valuable experience here for our state."

The project partners include a total of 13 companies from various states: badenova AG & Co. KG, Erdgas Mittelsachsen GmbH, Energieversorgung Mittelrhein GmbH, erdgas schwaben gmbh, ESWE Versorgungs AG, Gasversorgung Westerwald GmbH, Mainova Aktiengesellschaft, Stadtwerke Ansbach GmbH, Stadtwerke Bad Hersfeld GmbH, Thüga Energienetze GmbH, WEMAG AG, e-rp GmbH and Thüga AG, which is acting as project coordinator.

Dr. h. c. Petra Roth, Chairman of Thüga Holding GmbH & Co. KGaA and former Lord Mayor of Frankfurt, praised the joint commitment: "When municipalities and public utilities join forces, then that is smart, efficient and responsible behaviour. The companies comprising the Thüga Group develop and implement joint solutions for all energy-related issues - ranging from those involving energy production to those concerned with energy efficiency and innovations as well as those attending storage and networks."

Operational and research phase to run to the end of 2016

The successful technical acceptance of the system by the project partners at the end of March 2014 represented the end of the planning and construction phase. "That was an exciting time for us. We had to prove the stable operation of a system that had not previously existed. For example, the interaction of the electrolyser with the gas mixing plant had to function fault-free," Michael Riechel, Member of the Board of Thüga AG said.

ITM Power's proton exchange membrane (PEM) electrolyser is the core of the system. This converts electrical energy into chemical energy and thus facilitates the storage of electrical energy. The gas mixing plant ensures that the admixture of hydrogen in the gas distribution network does not exceed two percent by volume. The plant is now entering its 3-year operational phase, during which time the plant will participate in the balancing energy market and provide negative balancing power. That means, when too much power is on the electrical grid, at the request of the TSO, the load of the electrolyser will be increased. In this case, the plant absorbs the excess power and converts it into hydrogen. This also contributes to the stability of the electricity grid.

The project partners, in collaboration with the DVGW Research Institute and the European Institute for Energy Research, are testing the dynamics of the system. Parameters such as control speed (i.e. how fast can the system be started up and shut down), efficiency and depreciation will be measured continuously and analysed. In addition, the Fraunhofer Institute for Solar Energy Systems developed software for real-time control of the complete system. This will help to integrate the plant into an increasingly intelligent energy system. "We want to integrate the plant so that it autonomously compensates for the differences between renewable energy generation and power consumption," Riechel explained.

Conditions must be right

Given the high volumes of energy that must be stored, power-to-gas technology holds great significance. According to a Thüga analysis, storage requirements in Germany could be as high as 17 terawatt hours (TWh) by 2020, and reach 50 TWh by 2050. The municipal gas distribution network can easily absorb these quantities. Riechel is convinced that, "Our gas distribution network could thus be the battery of the future."

During the testing and launch phase of power-to-gas storage technology, it first requires time-limited government support in the form of investment grants in order that the technology can realise its full potential and achieve market maturity. The Thüga Group's demonstration plant is supported by the Hessian Ministry for the Environment, Energy, Agriculture and Consumer Protection. In addition, it is important that the technology has a solid legal foundation. For example, the operator of power-to-gas plants should be exempt from final consumer taxes when using surplus renewable energy, regardless of the subsequent use of the hydrogen. "Energy storage, and thus by extension power-to-gas technology, is key to the success of the Energiewende. For its development, we in Germany in the long term need a sustainable market model - as has for example been presented by the Thüga Group - and one that guarantees the economic operation of energy storage", according to Riechel.

Power-to-gas project platform

13 companies of the Thüga group have combined their know-how and capital in a project platform to jointly invest in the development of power-to-gas storage technology. The focus is on testing the practicality of power-to-gas technology. The companies are confident that long-term this technology has the greatest potential to store excess amounts of renewable energy. To this end, the companies are jointly developing, building and operating a demonstration plant over a number of years (2012 - 2016) in Frankfurt am Main. The plant converts electricity into hydrogen and then stores this in the gas distribution network. Overall, they will invest more than €1.5m. The project is supported by the Hessian Ministry for the Environment, Energy, Agriculture and Consumer Protection. Following the first phase of the project, the participants are considering a second project, which would use hydrogen and carbon dioxide to produce synthetic natural gas to be subsequently stored. For more information see www.szg-energiespeicher.de

Phil Doran, MD, ITM Power GmbH, commented: "We are proud to have completed our first significant sale into the German utility market and delighted to have taken part in this impressive inauguration event, which has received wide-spread press coverage in Germany, not least owing to the presence of a number of high-profile politicians lending their support. The event and has further raised the profile of ITM Power in Germany, the home of the Energiewende, and marks the next stage of our development."

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

About ITM Power plc:

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, £5.4m in 2012, £2m in 2013 and £10m in 2014 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.

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