AFC Energy getting nearer to commercializing its fuel cells

Fuel cells maker AFC Energy plans to begin field testing of its ‘Beta’ fuel cell system in the second half of this year as it moves towards commercialisation of its technology.

Independent broker Merchant Securities commented: “Shipment should see AFC regain the top spot in investor’s minds seeking fuel cell exposure.”

AFC said today that after constructing and successfully completing the first stage of commissioning of its Beta Fuel Cell at its site in Dunsfold, Surrey, and it expects shortly to have finished the necessary hazard and operability (HAZOP) study to be able to deploy a Beta unit in the field for testing.

The firm’s low-cost alkaline fuel cell systems use hydrogen to produce clean electricity as well as heat and water. The fuel cells are targeted at large-scale industrial applications, with the objective of producing the lowest possible unit cost electricity.

AFC claims its cells have high efficiency levels: using readily-available hydrogen and air as the source of oxygen electrical efficiency is up to 60 percent, which compares to approximately 30 percent for conventional electricity-generating technologies. The cells are also able to operate at temperatures of less than 100 degrees centigrade, enabling AFC to use low-cost polymer mouldings for many parts.

AFC also said it has been awarded its first patent and that it is confident it will be granted additional patents relating to its core technology. To date, the firm has filed 12 families of patents.

Reporting its interim results today, AFC said that post-tax losses during the six months to 30 were £1.8 million (H1 2010: £1.3 million). The firm explained that the increased operating loss was attributable to a planned increase in expenditure relating to the further strengthening of its technical team, expansion of its Dunsfold facilities and the construction of its first two Beta systems.

Merchant Securities said that today’s numbers were “virtually irrelevant” as the group is still approaching the first shipment of its Beta unit to its launch customer Akzo Nobel. “We believe the time taken by Akzo Nobel to write the operating procedures (HAZOP) bodes well for the scale of future adoption – not only by Akzo Nobel but other major players in the chlor-alkali industry,” added the broker.

At the end of April AFC had cash of £3.7 million on its balance sheet, compared with £2.7 million a year earlier. Since then, the firm has raised almost £4 million from a share placing on 27 May so that its current cash position is £7 million.