Technical Update

06 April 2011

AFC Energy PLC

("AFC Energy" or the "Company")

Technical Update

AFC Energy plc, a world leading developer of low cost alkaline fuel cells, will be holding its Annual General Meeting today at 2pm. At the meeting, the Board will update on the technical developments of its alkaline fuel cells.

Following a positive independent review of AFC Energy's technology by the Centre for Process Innovation (CPI), the Company initiated work on its commercial fuel cell system in parallel with work on the development scale Alpha system. The Beta project involved a design reassessment of the entire fuel cell system.

The aim of the Beta project was to optimise performance, increase reliability and longevity, simplify operation, installation and servicing and minimise parts costs. This design work is now largely complete.

The technical focus is now about demonstrating the latest advances in the novel porous membrane in conjunction with new metal electrodes. These are incorporated in the commercial-scale Beta cells currently being built for proving trials at Dunsfold in the UK and with Akzo Nobel in Germany. It is anticipated that these Beta cells will be available in the second quarter of this year.

Laboratory trials for this new fuel cell architecture have delivered increased power output performance, significantly reduced parts count and improved both electrical current collection and catalyst support.

A recent meeting with Akzo Nobel agreed a strengthened basis of cooperation and AFC Energy now has the opportunity to submit new proposals for further structured tests with agreed rigorous system improvements to output and longevity.

In addition to the technical progress there have been very positive advances in the development of economic manufacturing processes. These include:

·; the potential to manufacture the electrodes at commercially viable rates with low capital requirements, and

·; a method for recovering and reusing cells to reduce replacement costs and lower environmental footprint of the fuel cell system.

Ed Wilson, Managing Director of AFC Energy, commented, "AFC Energy has a clearly defined route to delivering technically proven commercial products and looks forward to providing further technical updates as development milestones are reached."

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About AFC Energy 

AFC Energy is a world leading developer of low-cost alkaline fuel cells that uses hydrogen to produce clean electricity. AFC Energy's technology is focused on large-scale industrial applications and the objective of producing the lowest possible unit cost electricity. AFC Energy's alkaline fuel cell has the capability to significantly reduce carbon emissions for businesses of all shapes and sizes. The technology is the most efficient method of converting hydrogen into electricity, and by-products, such as low grade heat and deionised water, further increase energy efficiency and commercial value. Please visit our website for further information, www.afcenergy.com.