Powerhouse Ener Regulatory News (PHE)

30 January 2015

PowerHouse Energy Group plc

("PowerHouse" or the "Company")

Introduction of next generation gasification technology (PHE-Gen3)

Eitting update

Construction update on first of three mobile test units

PowerHouse (AIM: PHE) provides the following update in relation to its activities.

Further to the Company's announcement on 3 December 2014, the second phase of the Eitting redevelopment and commercialisation project has been completed. It is now anticipated that PowerHouse will be able to demonstrate un-interrupted commercial operation of the Munich facility by the end of June 2015.

Phase three of the project - the final engineering, manufacturing and testing of the newly designed PHE Gen3-UHt Gasification technology, has commenced in Australia at the facilities of the Company's newly appointed engineering partner, Ore-Pro Pty, Ltd.

Over the past eight months, PowerHouse has been working aggressively with its engineering partner based in Australia to redesign the entire gasification process and inherent system infrastructure. Several issues related to the Pyromex process have been a concern to potential customers for some time. The new engineering and design eliminates these issues. The Company's engineering partner has incorporated significant improvements in reliability, operation, maintenance, thermal efficiency and dramatically increased gasification temperatures.

The incorporation of a proprietary reactor tube design, high-efficiency reactor chamber, and vastly improved syngas-management and catchment system (including low-energy microwave technology) has led to the ability to dramatically reduce the parasitic energy load on the system, and to reduce the over-all size of the system. The PHE Gen3-UHt increases feedstock through-put at comparable size to the less efficient Pyromex systems, thereby reducing the cost of manufacturing per calorie produced and increases potential profitability. The improvements incorporated in the newly designed PHE-G3 UHt system represent a complete redevelopment of the entire Gasification Unit.

The Gen3-UHt Gasification system, a recently developed, concurrent-phase process, has proven to be a superior technology to prior Pyromex trials in each component the Company has evaluated. A number of engineering breakthroughs, including the integration of both resistance and microwave heating (concurrent-phase process), have set the PHE Gen3-UHt Gasification System apart from processes available elsewhere. Operating models of the PHE-Gen3 UHt which have been evaluated at the engineering facility in Australia, combined with a re-examination of earlier Pyromex test data, have reinforced the Company's decision to embrace this new approach for PowerHouse's gasification engineering and commercialisation efforts.

Final engineering of the new G3-UHt System has been carried out in Australia and the first of three mobile customer application units (nominal 2-5 tonne per day through-put) is under current construction. Each of these units will be able to be moved to a potential customer site for complete process demonstration from feedstock evaluation to syngas creation to electrical generation. 

PowerHouse is currently negotiating the use of one of its Mobile Units to demonstrate the elimination of Medical Waste at a facility in Australia. The other two units are expected to be deployed in the UK (for the elimination of Auto Shredder Residue) and in Asia, where demand for alternatives to incineration and landfill, and demand for distributed electrical generation are growing rapidly. As a result of delays in shipping and the acquisition of key components, it is anticipated that the Mobile Unit in Australia will not be operational until late February, with the other two units becoming operational two months later. 

It is anticipated that due to the successful development and demonstrations in Australia, the Swiss engineering operations of the company will be eliminated, with only essential business development and support personnel remaining in the region, thereby reducing the cost-burden on Powerhouse. 

Keith Allaun, Executive Chairman of PowerHouse Energy Group, plc, said

 "Following the acquisition of Pyromex and a robust evaluation of its commercial potential, the Company realised that it would be in the interests of its shareholders to completely redesign the gasification process. A third party presented us with an innovative design which made us realise that we could better serve our potential customers and shareholders by bringing an advanced engineering and commercialisation approach to the system. The PHE-Gen 3 UHt Gasification System positions PowerHouse to provide a vastly superior and competitive offering in the rapidly growing Waste-to-Energy market."

For additional information please contact:

PowerHouse Energy Group plc

Keith Allaun +44 (0) 20 7079 4407

Allenby Capital Limited (Nominated Adviser and Broker)

Nick Harriss/David Hart +44 (0) 20 3328 5656