TIDMAFC
AFC Energy Plc
30 March 2015
AFC Energy Quarterly Newsletter - March 2015 - Replacement of
word 'annual'
Dear Shareholder,
I hope you found our inaugural quarterly newsletter helpful. It
is my intention to keep you informed of developments that have
taken place and also give you a bit more information about what to
expect over the coming months. In that newsletter, I took the
opportunity to introduce myself and clearly state my intention to
initiate an aggressive commercialisation strategy for AFC's
technology platform andcapitalise on the immediate opportunities
for AFC within the emerging hydrogen economy. For me, it's
important that AFC continues to regain and build on its credibility
not only with investors, but also with the global fuel cell market
and with our partners internationally.
To this end, when commencing at AFC as Chief Executive in
December 2014, I set myself four targets to be delivered within the
first quarter of 2015:
1. Re-establish clarity and focus on the timeline for execution
of the POWER-UP programme at Stade and deliver on the 101 fuel cell
stack;
2. Obtain our first building permit at Stade;
3. Execute an agreement to deliver AFC's first commercial fuel
cell project before the end of March 2015; and;
4. Re-engage with institutional investors and the private client
broker community to reinstate a clear business plan and objectives
for the Company over the next 12 months.
I'm pleased to say that we've now achieved each of these key
objectives. The next 12 months (and indeed the next quarter) will
no doubt carry a number of challenges in meeting a highly
aggressive deployment programme, but as ever, I remain confident of
success.
I hope this newsletter provides some further colour on the past
three months and what we might expect looking forward.
101 cell stack trial
So earlier this month, AFC announced the successful trial of the
101 fuel cell stack in Germany. What does this actually mean? Well,
for the first time we now have our fundamental building block of an
AFC fuel cell system up and running. With the operability of the
building block demonstrated, AFC is confident it will achieve its
goal of a full 24 cartridge commercial 240kW KORE system operating
and generating electricity revenues before the end of calendar year
2015.
Whilst I made note of this in the announcement a few weeks back,
I don't want to understate or undervalue the amount of effort and
time that went into the development of this stack by the AFC
technical team in an extraordinarily short period of time - I
congratulate them all for their efforts in this regard.
An important point which comes out of this 101 cell trial is the
fact that whilst in the past AFC has focused on the development and
deployment of its 240kW KORE system, which still remains an
important product in the large-scale fuel cell industrial market,
we are now able to say with some confidence that we have a fuel
cell cartridge which, with the correct balance of plant, can
deliver smaller scale market opportunities which AFC previously has
not sought to exploit. Following announcement of this milestone,
prospective partners and customers have already made approaches on
the potential for systems scaled between 10kW and 240kW: this is
potentially a new and exciting market for us to now consider.
POWER-UP
As part of the 11-milestone programme announced on 8 December
regarding the roll out of AFC's Stade 240kW KORE system, I'm
pleased we have now achieved five of the milestones and remain on
target for the remaining six by the end of the year.
The balance of plant is under construction and is scheduled to
be completed over the next few months. Work is also underway in
preparing for the manufacture of the necessary number of fuel cell
cartridges, which will be delivered out of AFC's facilities in
Dunsfold, UK.
I announced on 26 March the fact that we have now received the
first partial building permit from the Stade permitting
authorities, which is a significant milestone for the Company,
project and the technology. We now expect to commence construction
on site in the first week of April 2015.
We continue to hold discussions with German utilities for the
potential power offtakes for electricity generated from the KORE
system at Stade. The offtake arrangement will provide valuable
learnings into the dispatch of the fuel cell derived power into the
German power grid.
Samyoung-Changshin Deal
The day after the successful 101 cell stack trial release, we
announced a historic formal Project Development Agreement (PDA)
with two South Korean partners: Samyoung Corporation and Changshin
Chemical Co. for the deployment of an initial 50MW of fuel cell
generation capacity in Daesan, Korea. All three partners will be
taking equity stakes with AFC at 40%, Samyoung at 45% and Changshin
at 15%.
The first phase of the project is to supply 5 MW by the end of
2016 (subject to permitting), which will indicatively require AFC
selling 20 KORE systems into the joint venture. The second phase
for the remaining 45 MW is planned to be in place by the end of
2019 (again subject to permitting).
A lot of international attention has been received from the
announcement of this deal and has triggered interest from other
prospective partners and participants across the manufacturing and
production supply chain.
There are a number of important next steps in this deal which we
now need to start moving forward on. These include firming up on
the detail behind sourcing the fuel cell systems and our global
supply chain, which is likely to see AFC go to market for pricing
from prospective suppliers over the coming months for production
capability for the Korean and subsequent projects. We are also
addressing the issue of funding for the project. We have a number
of options available to us with regards to funding which I am
exploring at present, so as we progress through the feasibility
studies with regards to the Korean project, we hope to in parallel
be further developing and refining our strategy with regards to
each of these issues. Importantly, these are all challenges
associated with the commercialisation of new technologies and which
in and of themselves, create great learning opportunities for AFC
and our partners.
Again, I would like to thank both Mr. Dong Heum Keum, President
and Chief Executive Officer of Samyoung and Mr. Sang Do Bae,
Chairman of Changshin for their commitment and vision to this
project.
Moving forward
We have a lot of expected news flow coming up over the next few
months, both in the development of the POWER-UP project, and in
regards further growth in our project pipeline. With the
Samyoung-Changshin project now moving forward with negotiations on
the suite of project agreements expected to commence over the next
quarter, whilst in parallel continuing to work on engineering and
costing studies for the project, we hope to see good progress over
the next quarter as well. As mentioned, we are also working on
concluding further commercial agreements around the world and hope
to be making further announcement in this respect.
Ultimately, having seen the potential opportunities for AFC and
its leading alkaline fuel cell technologies, not only in Korea, but
internationally, I firmly believe that we will be able to achieve
our target of 1 GW (1,000 MW) of capacity under development by the
end of 2020.
Yours sincerely,
Adam Bond
Chief Executive Officer
This information is provided by RNS
The company news service from the London Stock Exchange
END
NRAEAKDEDSXSEEF
Afc Energy (LSE:AFC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Afc Energy (LSE:AFC)
Historical Stock Chart
From Apr 2023 to Apr 2024
