To clarify basbas's previous post to any readers not aware of what he's referring to [6 Green Boxes] story posted below.
September 10, 2008
ITM Power Is Testing Home Refuelling Electrolyser Units And Hopes To Begin Shipments To Partners Soon
By Rue Swabey
Aim-traded fuel cell company ITM Power is struggling to convince investors that it can commercialise its hydrogen technology. In April the company announced an agreement with automotive engineering company Roush Technologies which involved trialling hydrogen-powered vehicles in the UK. Roush will modify existing vehicles to run on hydrogen and also research new types of hydrogen power units. Shortly after the announcement, in July, ITM Power gave a demonstration of its home refuelling system, and its hydrogen petrol bi-fuel vehicle, to journalists and trade customers.
ITM Power, which has developed a low-cost membrane for its fuel-cell stake and electrolyser that eliminates the need for expensive platinum, has attracted a big institutional following. While sentiment was high (the shares reached a high of 351p in 2006), the company was able to tap the market and it now has £26.9 million on the balance sheet, equivalent to four years cash burn. But sentiment turned in January when management revealed problems with the manufacturing of ITM’s 10kW home refuelling unit. That resulted in a further delay to the long-awaited demonstration which only took place six months later.
Although these problems have been addressed, the market is still nervous and ITM Power’s share price has slid from 114p in January to 47.5p today. ITM Power is not the only fuel cell company to have lost value, and other companies, such as Acta and Voller Energy Group are down sharply as investors grow impatient with the inevitable delays in commercialising fuel cell technology. ITM posted a £4 million loss for the year ended 30 April 2008, up from the £2.7 million loss booked a year ago. And management is guiding for an increase in operating costs in 2009, given recent hires and an increase in engineering development work.
In addition to the Roush partnership, ITM Power also has an agreement with the United States Naval Undersea Warfare Centre to help develop advanced power systems for unmanned undersea vehicle applications. While there are no revenues attached to the agreement, the interest of the US Navy underscores the technology’s potential.
ITM Power is currently constructing six home refuelling electrolyser units for internal testing at its production facility in Sheffield. It is a complex process as it involves components from numerous suppliers and safety requirements need to be met. Once the units have been tested internally, ITM will be in a position to book orders from partners for demonstration and testing.
Management expects to demonstrate a refuelling system for commercial vehicles, fork lift trucks and local public transport, in the coming months. In addition to the residential and commercial refuelling systems the company is working on other applications such as hydrogen homes. It is developing a 10kW system that could be used in the home to supply hydrogen to a gas boiler, to a cooker and a small fuel cell. ITM has an agreement with Renewable Energy International (REI) to work on solar hydrogen homes. REI has built the world’s first hydrogen home in the US, and is building a second home in the Cayman Islands.
ITM Power is also developing a small electrolyser which it calls “the chip”. This 1-3kW system has the potential to generate hydrogen on-site for industrial processes. Jim Heathcote, ITM Power’s chief executive, points out that the development is customer-led, and underscores the potential to generate cash flow for the company while more complex applications are being developed and commercialised. If ITM Power is able to move into the delivered bottled hydrogen market, which is worth US$2 billion annually, it would provide much comfort to shareholders and take some pressure of the share price. However in the short-term the market will be waiting for the results of the electrolyser tests.
AI
