http://www.afcenergy.com/

Dawnay, Day Corporate Broking Research Note

Aim Admission Document

Greek - it bodes well doesn't it - I'm quiet happy to have purchased recently and hopefully not have to look at them too often.

Hi Skinny,

My problem is that as investing is one of my main hobbies (I'm retired), when I'm at home I tend to have my computer on all day, so whenever I walk past it, I am tempted to glance at share prices.
I accept that your not looking at the AFC share price too often, is a better strategy!

Good job I'm a keep fit fanatic otherwise I would end up a computer potato (a bit like a couch potato, but more stressful).

Greekman - in case you hadn't noticed, I spend quite a bit of time on the computer :-)

Greekman,
You could probably use iPad and have it with you all the time.

Anyway, I prefer laptops or a proper PC as they are fully compatible with everything.

Hi Ahoj,

I have considered an ipad, problem is it would probably lead to a divorce, as my wife already refers to herself as a PC widow.

Hahaha,
Yes, the same problem here. I steer at my computer screen 100 times more, so the consequence can be a divorce ...

This is the new life, we are satisfied this way!!

GREAT NEWS
now lets hope some are more interested than just because the " AMO " is in

Issue of Share Options and

Exercise of Share Options and Warrants

Total Voting Rights

AFC Energy is pleased to announce that on 7 November 2012 the board of AFC Energy agreed to grant options over a total of 810,000 new ordinary shares of 0.1p each in the Company ("Ordinary Shares") (the "Options").

The Options have been granted to employees under the rules of the AFC Energy Plc Enterprise Management Incentive Share Option Scheme. The purpose of the Options is to recognize individuals' performance and to provide further incentivisation.

The Options are exercisable at a price of 35.75 pence per Ordinary Share, being the closing price on 6 November 2012 and are exercisable between 3 and 10 years following the date of issue. The exercise of the Options is not conditional.

The Company also announces that application has been made for 1,050,000 Ordinary Shares to be admitted to trading on AIM pursuant to the exercise of 500,000 options under the Company's EMI Share Option Scheme (the "Option Exercise") and 550,000 warrants (the "Warrant Exercise"). The options and warrants were originally issued in 2009 and have an exercise price of 3.1 pence per ordinary share.

The 1,050,000 Ordinary Shares issued pursuant to the Option Exercise and the Warrant Exercise will rank pari passu with the Company's existing Ordinary Shares and admission to trading on AIM is expected to take place on 14 November 2012.

Total Voting Rights

The total enlarged share capital of the Company following admission of the 1,050,000 Ordinary Shares will be 218,348,544 Ordinary Shares with no shares held in treasury. This figure may be used by shareholders as the denominator for the calculations by which they can determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the Disclosure Rules and Transparency Rules of the UK Financial Services Authority.

Following the issue and the exercise of the Options and Warrants there will be 11,140,000 options in issue and 11,006,000 warrants in issue, representing 9.21 per cent of the fully diluted share capital of the Company.

Ends

GM just cakme across thi,hope it helps?


beeezzz, 1MW of power from a fuel cell system operating at 60% efficiency is:

1 / 60 x 100 = 1.666666MW of fuel cells required

To check:

1.666666MW - 40% loss = 1MW output

----------------

1kg of Hydrogen contains 39.4kWh of energy
1.4m metric tonnes = 1,400,000,000Kg
1,400,000,000Kg x 39.4kWh = 55,160,000,000kWh
55,160,000,000kWh / 8760 (hours in a year) = 6,296,804kW
6,296,804kW / 1000 = 6,297MW of fuel cells required
Output would be 6,297MW - 40% loss = 3,778MW
3,778MW x 8760 = 33,095,280MWh a year of revenue
4p/kWh = £40/MWh (target price)
33,095,280MWh x £40 = £1,323,811,200 per annum (£6.09 per share)

Add waste Hydrogen from other industries like Chlorate, Ethylene, refineries. Add revenues from Waste-to-Energy, UCG and DG.

Now you can see why Ervington are piling in and why you won't find me selling any AFC stock for years. Might as well wait for the bidding war to maximise my gains.

and this

http://afr.com/p/national/abramovich_ponders_deal_with_linc_Uz3QmX8qyNwI5zYxBMKt7L

http://www.businessspectator.com.au/bs.nsf/Article/Macquarie-Mark-Bouris-Yellow-Brick-Road-BHP-Echo-pd20121108-ZTRWJ?OpenDocument&src=mp

http://www.proactiveinvestors.co.uk/companies/stocktube/1432/afc-energy-working-on-scaling-up-the-business-1432.html

Report from 3i on investor day.

Thu 16:39
Re: Investor day

polterlooser
19UP
Having attended now 3 investor days and the afternoon session to-day I think I can add a little more.
The new skid mounted unit is for ICL. It will be much easier to have a test unit un the UK near AFC's main base.
I found that there was more of an air of confidence with the staff I met without any loss of enthusiam. Many things have progressed since last year and the new production facility was working well. Electrodes were being produced as we went through. The many small improvements that have been made since last year will greatlly improve the product.
We did not get any clear answer as to when the AZKO testing will be complete because that facility will be necessary for some time yet. Every time a new improvement is made to the design it will need more endurence testing. However we must appreciate that these improvemnets are necessary to increase the competitivness of the sysytem

Some more.



oldernowiser
16UP
Thu 22:02
Investor's day 1130

jimmynan
36UP
Well here is my own account of today's tour. I apologise if there are a lot of already well known facts included but I just want to put all my jottings down. Any newbies will get some insight too. Appologies for it being so long as well!!

After the intro by IB, IW and then GL said a few words. Notably GW had just returned from a FC conference in USA, I believe, where he said AFC were a well known name now and the chair of the conference said to GL that she felt AFC were in the best position to become the first FC company to make a profit. This is when taken in context that $billions has been spent on the technology and not a single profit has been made by a FC company to date. Part of this is clearly due to the low cost design of our FC which was repeated several times during the tour.

We were then split into two groups, one led by IW and one by GL. Interestingly IB disappeared off to to conduct a tour with several members of ICL - clearly things are moving forwards here nicely.

I went off with the IW group where we were first taken to a room containing the frame of the next FC system that was going to be sent out to a customer. This customer was clearly ICL although not mentioned in name. It had only arrived this week and there was clearly a buzz about it's arrival. I asked IW if this would be a similar system to the one at Akzo to which he replied he couldn't answer this but clearly his tone suggested they were getting a new system - is it a beta ++ or delta system - who knows. Costs are already coming down, the frames now cost 2/3 of what they originally did however the frame only counts for 10% of the system cost - any saving though must be a good thing! He was very keen to say how they are working very hard to reduce the 'parasitic' power costs reducing efficiencies which mainly comes from the pump which pushes the KOH to the top of the system, after that gravity pretty much takes over.

Next we headed off to see the working fuel cell with 2 fitted cartridges. Apparently the cartridges weren't full size so they could be accommodated in the test room. We could actually touch the system we got that close! Currently they are having to use bottled hydrogen which costs £100/cylinder and each cartridge gets through 15 cylinders a day!! Clearly testing at Akzo and soon at ICL is very cost effective compared to the current set up at HQ. ICL being only 1 1/2 hours away will make site visits much more practical.

After seeing the FC system we were shown through to the labs which have expanded into a second room since last year's investors day. Here they test 5cm x 5cm electrodes which essentially provide similar dynamics to full sized electrodes so provide small scale test beds. They are currently trying to develop techniques to speed up electrode testing so they don't have to be run for months on end to work out their lifespan. They were also in the early stages of testing electrodes being run on impure hydrogen. The one impurity tested so far didn't seem to effect the performance of the electrode although he didn't state what exactly they were testing. He did say they were looking at ammonia and natural gas as feed gases. IW was very particular about data collection stressing how important it was for data to be accurate and reproducible before releasing it to the market.

Next we headed to the production facility which is in fact 3 large prefab style garages. We only saw the first one which is where the electrodes are produced. The second building was an office for the production staff and where the cartridges were assembles. The third building was were the electrodes were going to be recycled. The team of 4 we saw in the facility were had at work producing the black pellety dough and rolling it out using dough rolling machines. Again they pride themselves in using commonly available machinery which keeps costs low. They are already planning how to best automate the system but are clearly positive that this challen

Thu 22:24
Re: Investor day

oldernowiser
16UP
I went this morning and would agree that there is a general feeling of restrained optimism and confidence. As far as the trials with Akzo are concerned IW said he does not really want them to end - certainly not anytime soon. The level of co-operation between Akzo and AFC is clearly very high and IW says that they have a completely open relationship with Akzo and as a result get access to all of their fount of tecnical knowledge dealing both with Hydrogen and Potassium hydroxide and Sodium hydroxide. The value of gaining deep industrial operations experience with Akzo is proving extremely valuable.

They also confirmed that finance from the EU with ICL is just a matter of dotting is and crossing ts (there was an ICL man present when the FD confirmed this)

More
View thread 7
Respond
Login to Vote up

Re: Investor day

richlist
23UP
Thanks to Jimmynan for feedback from the Investor's day yesterday. I also went and have a few more bits of observation, comment for the information hungry among us. Again, I was struck by the optimism and enthusiasm I saw. There has been huge progress since the Investors Day a year ago and our spot checks are just little windows of the ongoing fast moving progress they are making.

On the topic of when will we hear about the akzo trial. It sounds as if the lab test bench already has a newer recipe for electrodes, which was said to have increased longivety and power output. Numbers were not specified, but I imagine we are already ahead of the projected timeline graph in the Peat report. This is very exciting. This has not gone to Akzo yet.

This is not 'delay to get to the perfect product'. It is an ongoing process of iterations. Microsoft have had many of these to keep ahead. Any new recipes will just be new electrodes which need replacing every few months anyway. It is all very good news.

When we visited the running cartridges IW said that the hydrogen costs upto £1500 per day to run tests at Dunsfold. With two test beds at Akzo on free hydrogen, the testing there is therefore worth £1m per year of AFC (and our) money. (Might have been more, I was not sure if this was for testing with a full stack of electrodes).

This means that time at Akzo is very valuable. IW specified that it is used to collect a lot of different kinds of data of use to the company. I got a new insight into why they would not choose to carry on with a longivety test there when they already have something better in the pipeline. I felt very reassured that progress is very good and the absence of an Akzo trial '3 month' rns is not because there is anything wrong.

Regarding any RNS about a contract with Korea, it was said that they have not yet chosen their definitive partner, so not about to get this any day probably. However, IW said this was 'complicated'. The Peat report mentioned that companies cannot operate in Korea without a partner and not clear how a deal should be organised. This may give an insight into how the structure of any agreement needs to be right. It suggests there may be more than one partnership option. It is important for the longer term that the deal is the best for AFC. I felt reassured that there are options there and they will end up with what is best for AFC and not rush into anything.

We saw the new production facility. (I had not seen it before). We were shown the rubbery 1cm diameter pellets of the secret recipe. There were two enthusiastic people operating the rolling machines. One machine was called a 'dough' something. They were said to be used for making pancake roll casings. There seemed to be repeated rollings between transparent non stick sheets (computer aided, so I imagined that accurate and even thickness is important). The recipe seemed to have the properties of a rich shortcrust pastry or shortbread, in that it rolled with a bit of crumbling at the edges. So looked to have capacity to crack if not treated properly. Possibly the 'lightness' and therefore gas permeability would be affected if the 'pastry' is rolled with too heavy a hand. The pieces of 'rolled dough' were then transferred to an oven to dry for 4 hours. We did not see the part where they are attached to the metal plate with a layer of glue or the electrodes assembled.

The process is being managed by a very enthusiastic production managed who is maintaining consistency and not letting the scientists alter things and tinker with the recipe. This a a marked step change from lab excitement to real production.

The process looked very time consuming. It is easy to see that this could be automated using the type of machine that would produce lasagne sheets (eg) but also the need to be careful of thickness, lightness and cracking to get a uniform quality product. I am sure they will be able to scale this up without difficulty, but are ta

:01
Re: Thanks for feedback.,

polterlooser
7UP
First let me endorse the various reports on the BB in last 2 days.

As for the mass production, though we were not told this some asides with their Landlord in the local council it appeared to me that AFC are haggling with the airport for more space. That will be needed for the mass production. In the meantime they are obviously learning a lot from running the smaller unit. For instance they havve had to try several mixers for the catalyst paste. The current macine that presses the paste on to the metal electrodes does so by passing them both between two rollers. For mass production the will need a much longer machine with mulitple rollers. Also they want to do automatic stacking. That is going to involve much more mechanical handling and will also need much more space.
There is no doubt in my mind that GL and his boys can manage all this but they will want to learn as much as possible from the smaller set up.
I will say the even though the current set up is in buildings that look very unpreposessing fro the outside all is very slick, very clean and very professional inside. It reminded me of plants I have seen to manufacture nulear fuel elements.

Just to add my thanks to those who attended and posted.

">

Considering taking a new position,from the above,seems the EEC Grant is imminatent?
If so i can see a spike in the SP,although i feel this is still couple years away from
proving it's tech,with regards to longativity of life? Something which is imho the
real test,along with cost of the feul cell?

only thing you guys are ignoring is the lead time to when there is something commercially and economically viable in production - still 3/5 years?

http://www.dailymail.co.uk/money/investing/article-2237613/INVESTMENT-EXTRA-Put-energy-AFC-shares.html

http://www.proactiveinvestors.co.uk/companies/news/50838/afc-energy-fuelled-by-hydrogen-and-powerful-backers-50838.html#

AFC Energy fuelled by hydrogen and powerful backers
Tue 11:50 am by Ian Lyall AFC’s fuel cell technology works a little like a large alkali battery that is able to use hydrogen created from chlorine production, biomass and coal.AFC’s fuel cell technology works a little like a large alkali battery that is able to use hydrogen created from chlorine production, biomass and coal.

AFC Energy (LON:AFC) has changed the purpose of a great deal of equipment to produce its state-of-the-art hydrogen fuel cells.

It is unlikely to have repurposed anything quite so bizarre as the croissant maker that became a talking point between management and the company’s new cornerstone investor, Roman Abramovich.

“Roman walked in and immediately recognised the piece of kit,” recounts chief executive Ian Williamson.

“A lot of the expertise we intend using is based in the food industry as our electrode resembles short-crust pastry.”

It may go down as the most oddball use of kitchen equipment, but the Chelsea FC owner wasn’t put off by the revelation.

His investment vehicle Ervington later acquired a 15% stake in AFC Energy, via a share placing that injected £8.7 million into the business.

Williamson describes AFC’s fuel cell technology as working a little like a large alkali battery that is able to use hydrogen created from chlorine production, biomass and coal.

“You have a continually producing battery,” he adds. “There are different ways of producing power using a reaction.

“We have centred on the alkaline one because it is the oldest and the most trusted and tried. There are more costly modern alternatives such as proton exchange membranes and solid oxide fuel cells.”

The challenge is getting the cost down to be competitive with traditional energy sources. The company is confident it can do this.

AFC won’t simply be a fuel cell maker; there have been too many failures in this endeavour, chief executive Williamson points out. The business will make its money as a generator.

It is partnered with the Dutch chemicals giant Akzo Nobel at a site in Germany where the fuels cells are being used to turn waste hydrogen from chlorine production into electricity.

AFC estimates that if plants such as Akzo’s used all the hydrogen this way they would get back 17% of the power used in the process.

Williamson calls the collaboration at the Bitterfield facility “a technical demonstration and proof of concept”.

The commercial application of AFC’s technology will occur in Essex.

Earlier this month it received a £4.9mln European Union grant to create the world’s largest alkaline fuel cell energy generation system.

It will be built in Thurrock on the site of a new plant owned by Industrial Chemicals Limited.

The low-cost fuel cell system will be installed in stages at the ICL facility with the aim of eventually generating around one megawatt of electricity, or enough energy to power 500 homes.

“Our main partner is Akzo and we are in negotiations to make that happen on a bigger scale,” says Williamson.

“We have what I would call a technical demonstration with them; a tech proof of concept.

“We are moving to the next stage – a scale up from technical demonstration - to a commercial demonstration. We are going to install a slightly different chor-alkali plant at ICL in Essex.

“In West Thurrock they have Europe’s newest chlorine plant that delivers enough hydrogen to produce a megawatt of power.

“This scale-up is interesting for us. We are putting the first fuel cells in at ICL at Christmas time, and scaling over a period.”

Now this brave new world of generating electricity from hydrogen (be it from chlorine, waste products or the gasification of coal) is not without its challenges.

The first and most obvious is being able to produce the electricity at a competitive rate. The City research firm MC Peat believes AFC is “on track” to produce electricity at 4 pence per kilowatt hour or lower.

To put this in context, industrial power users pay around 40% more for their energy, while you or I (the Great British consumer) are charged around 60% more for our electricity.

So there is a margin to be had here in the UK if AFC is able to produce at 4p per kilowatt hour.

Key to getting those costs down is the longevity of the electrodes and the power extracted from them.

AFC is aiming to increase the lifespan from three to 12 months, along with a 75% improvement in power output.

“But we do have to go along our development curve for all of this,” Williamson cautions.

“Currently we sit in the lab at three months electrode length, and in order to be commercial in the UK I need to get it to 12 months.

“In terms of output we have to go on a transition for an improvement of another 75%. We have already improved 150%. So we don’t see this as a problem.”

In the UK, green energy schemes are eligible for a form of subsidy called ROCs (renewable obligation certificates), which makes them more financially attractive.

However, the best geography in the world to build a project based around AFC’s fuel cell technology is Korea. “Their feed-in tariff is better than double ROCs,” said Williamson.

He also confirms the group is “seeking a commercial partner” in Korea.

So far we have only really addressed the potential of AFC’s technology in the chlor-alkaline plants such as Azko’s and ICL’s.

Abramovich has been quick to spot the potential opportunity here.

His Ervington Investments subscribed for 33m shares at 26.6p in a placing last month that leaves AFC £8.7mln richer. He has already made a profit on this investment.

The cash injection gave the group £11mln in the bank, which gives the company enough funds for almost four years based on the current rate of consumption.

But as we have hinted above, it might be deployed to use the synthetic gas that is now generated by the underground gasification of coal beds, or the hydrogen gleaned from recycling biomass.

Its 12% shareholder is Linc Energy, an oil and gas company with a focus on clean energy, while it is also a partner of and shareholder in Waste2Tricity, which is developing technology to turn municipal solid waste into energy.

All of this points to the huge latent potential of AFC’s fuel cell technology.

However, Williamson doesn’t want to expand on too many fronts.

“If you grow too quickly you can get those horrible growing pains that you can’t afford as a small company,” he says.

“I have seen fuel cell companies over-expand and find themselves simply supporting the products out in the marketplace as opposed to doing any development. We can’t afford that.”