http://www.afcenergy.com/

Dawnay, Day Corporate Broking Research Note

Aim Admission Document

Just had another look and six months ago I would have bought around the year low. Must have been about 4 months ago when they started climbing cos I bought around about the current price.

Power Up and Trading Update

Air Products joins Power Up project
Trading and Operational Update

AFC Energy (AIM: AFC), the fuel cell energy developer for industry, is pleased to announce that Air Products PLC ("Air Products") has agreed to become a key strategic partner within the Power Up programme, the Company's leading project to generate and supply electricity by using surplus hydrogen produced at a major chemical plant.

Air Products, one of the world's top industrial gases groups, replaces Industrial Chemicals Limited, the Essex-based chemicals manufacturer, which had planned to participate in the €6.1 million EU-backed project, as announced by AFC Energy in June 2012. The project will install one of the world's largest alkaline fuel cell power systems.

As a result of the partnership with Air Products, the project will now be sited in Stade, northern Germany, where Air Products operates a major industrial gas processing plant that sources hydrogen from an adjoining major chemicals complex operated by Dow Chemicals.

The Company commenced its work on the Power Up project in April 2013 and remains on track to install the first KORE system in Germany during 2014 with it expected to become operational in the second half subject to local permitting. AFC will initially install two fuel cell systems in stages with a total 500kW electrical output.

This first system will be capable of running with 24 cartridges, expected to generate approaching 250kW when it reaches full power.

Ian Williamson, Chief Executive of AFC Energy, said: "The decision to move the project to Air Products provides us with the best possible opportunity to install and operate our KORE-branded fuel cell plant at a world-class industrial chemical/gases complex. It will also provide us with access and visibility to a significant quantity of clean hydrogen in a fully commercial setting. With our existing long term project with AkzoNobel continuing at Bitterfeld, Germany, we will soon have two installations in one of the world's most exciting and strongly government-supported markets for fuel cell energy."


Trading Update

AFC has continued to make strong technical progress although income in the financial year to 31 October 2013 will be lower than market expectations, whilst still ahead of last year. This is primarily due to the slower ramp up of the Power Up project and the desire of the South Korean market to have data from scaled-up systems, to facilitate larger opportunities more rapidly. Nevertheless, AFC has seen licence revenues improve and its existing grants delivered as expected. Despite bringing forward some spending in relation to the planned production of larger systems, AFC has maintained a tight control on the cost base. Net cash balances at the financial year end amounted to £6.9million (2012: £10.9million).

Ramp up of volume manufacturing

The Power Up project alone will - over time - necessitate the assembly of many thousands of fuel cells. Until now, AFC Energy's fuel cells have been hand-crafted but this is being translated to an automated process as the Company begins larger-scale, demonstration and commercial projects like Power Up. As a result, the planned investment in the scaling-up of manufacturing is being brought forward by approximately five months to introduce a more automated process.

AFC Energy will work with UK automation specialists, GB Innomech, who are developing automated stack assembly and stack disassembly systems. The result of this approach will be to enable manufacturing/maintenance facilities to be rolled out quickly and inexpensively.

To help facilitate this automated process AFC Energy has expanded its space at Dunsfold, by leasing an additional 4500 sq ft.


Markets / partners

In addition to Air Products, AFC Energy continues to work with several other partners to develop markets for the deployment of its fuel cells.

It is clear that there is a customer base in South Korea, and elsewhere, ready to take KORE systems on commercially attractive terms. AFC continues to actively pursue a number of possible strategic partners in South Korea and the local region.

AFC Energy took a further step towards establishing itself in the waste to energy sector with a £1.2 million licence agreement announced last week with the Thai subsidiary of Waste2tricity Ltd ("W2T"). The agreement will extend AFC's reach into the fast growing emerging markets of South East Asia, beginning with Thailand. AFC has also granted W2T a right of first refusal for the remainder of the ASEAN market where W2T intends to become active. This follows AFC's first licence deal of £1 million with W2T in respect of the UK market, announced in April 2012.

Ian Williamson commented: "We have an array of very credible development partners and many market opportunities. Our technical progress has been strong in the past year and we are cautiously and methodically putting all the building blocks in place to ensure successful commercialisation of our low-cost fuel cells for industrial energy."

Looks to be great news.

Initially the project with ICL was for 100kW of electrical output whereas now with Air Products its for 500kW electrical output.

The power up being bought forward by 5 months has to be down to forward looking demand getting ahead of possible supply.

Along with all the other bits mentioned, this has to be the blue touch paper that lights AFC's rocket.

A bit of a blip!

I know hindsight is a great thing, but when I saw this 'blip' I thought that the drop was so overdone that I was wondering if I had a spare grand to buy a few more.

Was still thinking about this when the sp went straight back to level.

As one of those who have slated AFC's PR of late, I do in this instance give AFC a big slice of leeway as no doubt the almost abandonment for the near future of placing the AFC system in the UK no doubt due to the procrastination of the main government players and the UK's usual total lack of foresight could not be released too early.

Once again the UK looses out to more forward looking areas of the world.

As for the main points, looks to be great news.

The project with ICL was for 100kW of electrical output whereas now with Air Products its for 500kW electrical output, and remember when it was 100kW it was still going to be the worlds largest installation of fuel cells.

Trouble is the market might just see the RNS as a none contract release and not for it's full benifit.

As to this effecting the sp, I gave up trying to read the effects of none contract RNS a while ago.

Looks like in my previous post I got KW mixed up with MW, so appologies.

A possible dilemma regarding South Korea.

I wonder if the success of the fuel cells longevity and power output has in a way gone against AFC in the short term.

I would think that S Korea was and still is happy to sit back for a few more months watching and waiting for the next fuel cell reliability update (15 months anytime now), whereas if the 9 or 12 month update had shown a sharp drop off in performance instead of a steady decline they would have been satisfied that it met their needs.

Strange logic, but logic all the same.

Directorate Change


AFC Energy (AIM: AFC), the fuel cell energy developer for industry, announces that Ian Balchin has resigned as a director of the Company with immediate effect in order to pursue his other business interests.

Tim Yeo, Chairman of AFC Energy, said: "We originally brought Ian into the Company to help it through its early stages of development and he has played a key part in transforming its prospects, building its profile and in particular in raising the funds required to take the business forward. Ian leaves us with the warm thanks of the Board and we wish him every success in the growing number of his other ventures."

Ian Balchin said: "I have relished the last five years with AFC Energy and leave the Company in good shape, well financed and in very capable hands ready for large-scale testing and scale-up. I shall continue to take a keen interest in the Company's progress whilst pursuing my other business interests."

No doubt he had signed a confidentiality agreement and although he is still on the board of wate2tricity, I would have though he would have stayed for a few more months to see AFC take off as has been hinted.

I would love to know a bit more detail on what his reasoning is, but obviously we are not going to find out.

Sp down today???

but probably yes...

.

Israeli scientists are claiming to have discovered a commercially marketable alternative to crude oil that could revolutionise energy usage within a decade.

On Wednesday, a team from Ben Gurion University unveiled a process to make an eco-friendly substance that will perform the same functions as oil.

The proto-fuel was created using a greenhouse gas and a chemical element that can be obtained from water.

“There is no magic here… this is viable,” said Moti Herskowitz, the chemical engineering professor who headed the research, just before publicising the discovery at the Bloomberg Fuel Choices Summit in Tel Aviv.

Dr Herskowitz’s process — which is yet to be patented — involves mixing carbon dioxide with water and synthetic gas, and passing it through a special reactor to create a “green feed” made up of liquid and gas. This feed will be used as the raw material for the refineries of the future instead of oil, he claimed. He added that it will be used to produce petrol, jet fuel and diesel.

And while the scarcity of oil is a constant concern for world leaders, the ingredients for Dr Herskowitz’s “green feed” are in plentiful supply. Hydrogen can be obtained from water — comprised of two hydrogen atoms for every oxygen atom — by “splitting” the chemical compound. And carbon dioxide can be “captured” from places where it is generated — an eco-friendly process as it means less of the gas is released into the environment. “This is a truly renewable fuel in terms of the environment,” said Dr Herskowitz.

While Dr Herskowitz has established the scientific basis for his process, he says that its true commercial potential will be realised in a few years. This is because various groups of scientists across the world are working on cheaper and more energy-efficient ways of dividing the elements within water, which is expected to bring down significantly the price of hydrogen derived from water.

“It’s all economics at the end of the day, because you’ve got to be competitive,” said Dr Herskowitz, who is in the process of establishing a start-up to bring the process to market.

“I believe that in five to ten years we’ll be able to be very competitive because of advances with water-splitting technologies.”

Professor Christopher Hardacre, a chemist at Queen’s University Belfast, said: “The efficient conversion of CO2 into fuel via reaction with H2 is very valuable and has the potential to be a significant development in the replacement of fossil fuels,” adding that the process developed by the BGU team was an “exciting prospect”.

Water-splitting has hitherto not been seen as sufficiently efficient to drive a viable fuel production process.

I caught this on the news this morning.

Toyota eyes mass production of fuel cell car by 2015

Grant of Share Options

AFC signs MOU with Allied New Technologies

Co-operation agreement is the first inroad made by AFC Energy into the US market

AFC Energy plc, the industrial fuel cell power company, is pleased to announce that it has signed a non-binding Memorandum of Understanding with Allied New Technologies Inc ("Allied"), a US chemicals manufacturer, to undertake a feasibility study for a fuel cell system to generate clean energy from surplus hydrogen produced at Allied's plant in Florida.

The co-operation agreement marks AFC Energy's first move into the US market and is aimed at lowering Allied's energy costs by utilising hydrogen produced as a by-product at its chlor-alkaline facility. The hydrogen by-product can be used as a fuel-rich source with AFC Energy's fuel cells to produce electricity with zero carbon emissions.

AFC Energy will work with Foster Wheeler, a leading engineering and construction contractor, in carrying out the study. The project will examine how electricity produced from stored hydrogen will enable Allied to optimise its chemical plant operations by lowering energy costs.

Ian Williamson, CEO of AFC Energy, said: "This study gives AFC Energy the opportunity to assess the commerciality of its low cost fuel cell technology in the US. We will investigate whether stored hydrogen can be an effective energy time-shift mechanism, automatically providing varying levels of energy to meet the changeable demand that occurs in the chlor-alkali industry. The ability to use such hydrogen 'buffer' storage technology is fundamental to all non-baseload renewable generating technologies so that energy can be made available effectively during periods of shortfall or greatest need."

Allied's Florida plant produces sodium hypochlorite (bleach) used in water treatment and the pool industry.

Michael Koven, Chief Financial Officer of Allied New Technologies, said: "This opportunity will enhance Allied's ability to lower its unit production cost via use of by-product hydrogen, while simultaneously showing Allied's commitment to being an energy efficient company."

Ends

I hope AFC will supply Allied with the technology data that they gained from the Akzo Noble trials, as Akzo have procrastinated for far too log in signing a contract with AFC, although this might just give Akzo the kick up the bum they need.

Greekman - it's been a long and frustrating wait!

Hi Skinny,

Frustrating, very true, but it's like sex, the longer you have to wait the better it is when you get there (or so they tell me).

The USA is still the 2nd biggest trade market in the world after China, although it is expected that China will slide back a bit this year allowing the USA to become number 1 again, so this could be a nice foot in the door to the country.

Also in the case of Florida (Allied's base) as with many states there are several 'green grant policies' just put USA green energy grants into google and see what you get, also for a Florida example see

http://www.c-jet.org/72/florida-renewable-energy-grants.html


If the MOU becomes a contract it will mean more than a single deal as it will surelly result in plenty of free publicity, as I am sure that Fuel Cell Energy is still very much under the radar in many companies plans.

Final Results and Notice of AGM

AFC Energy (AIM: AFC), the industrial fuel cell power company, is pleased to announce its audited results for the year ended 31 October 2013.

FY13 Highlights

· Extended the life of fuel cells to twelve months in the laboratory
· Finalised award of up to €6m from the EU to support the Power Up project
· Finalised award of up to €2m from the EU to support a research project for the development of ammonia-fed alkaline fuel cell systems
· Revenue more than doubled to £768k (2012: £361k)
· Loss before tax £4.5m (2012: £4.16m)
· Research and development expenditure increased to £1.48m (2012: £1.45m)
· Diluted loss per share of 1.88p (2012: 2.05p)
· Net cash amounted to £6.9m as at 31 October 2013 (2012: £10.9m)
· Announced a working partnership with Foster Wheeler to develop fuel cell systems for industrial applications
· Entered into a commercialisation agreement with Waste2Tricity International (Thailand) Ltd ("W2T Thailand") extending our reach into the fast growing emerging markets of South East Asia
· Acquired asset and intellectual property of Diverse Energy plc ("Diverse Energy"), to complement AFC Energy's European Union ("EU") funded ammonia-fed fuel system project
· Opened first sales office in South Korea in partnership with Intralink Ltd
· Established a research relationship with Lancaster University
· Appointed Jane Dumeresque as Finance Director and Company Secretary

Post Period Highlights

· Announced strategic partnership with Air Products PLC ("Air Products") within the Power Up programme
· Signed a non-binding Memorandum of Understanding with Allied New Technologies Inc ("Allied") to undertake a feasibility study for a fuel cell system
· Expanded the Dunsfold complex, allowing the company to move towards a more automated form of production
· Intellectual property portfolio expanded to 30 patents

Tim Yeo, Chairman of AFC Energy, commented: "The global fuel cell industry is continuing to show strong growth which provides a favourable backdrop for AFC Energy. We made excellent progress last year to commercialise our fuel cell technology which is aimed at supplying low-cost power for large scale industrial markets. During the year we extended the longevity of our fuel cell to 12 months, while also substantially improving its power efficiency. At the same time, we have launched new demonstration projects with world-class partners and opened new potential markets. AFC Energy has a unique, patented technology, a growing reputation and many commercial opportunities around the globe. With a strong balance sheet, the Board remains very confident of the Company's future success."

Notice of AGM

AFC Energy also today gives notice that its Annual General Meeting will be held at the Clarke Suite, Chelsea Football Club, Stamford Bridge, Fulham Road, London SW6 1HS at 2pm on 4th April 2014.

The Annual Report and Accounts and Notice of AGM will be sent to shareholders in March and will be available for download from the Company's website, www.afcenergy.com, in accordance with AIM Rule 20.

Progress. From IW's blog

18 February 2014

Our full year 2013 results represent another building block on the road to commercialisation of our fuel cells. We are pleased with the progress made last year and excited by our projects and plans for 2014.

We have strengthened the development team, upgraded our R&D resources and are expanding our production capabilities.

Just by way of a quick update on our new equipment. The first parts of the KORE are beginning to be delivered to Dunsfold now and we will put out some pictures on the website to keep you in touch with our progress. The next stage is to bring in our new production equipment. Pre delivery trials of our stacking robot are beginning at GB Innomech and our extruder is due to come to site next month. So, as expected, its full steam ahead on Power Up down here.

Our strong partnerships with global companies such as AkzoNobel, Air Products, Foster Wheeler and the recently announced, Allied New Technologies will continue to develop and help us target the key international markets where our low cost systems are on the verge of becoming commercially viable thanks to the availability of incentives.

We have a deliberate strategy in place to prepare the company for long term, sustainable growth.


Lots of nice little titbits in there, I especially like the comment, 'Key international markets where our low cost systems are on the verge of becoming commercially viable thanks to the availability of incentives'.

Its always nice to hear those three lovely words 'ON THE VERGE'.