AFC Energy (AIM: AFC), a leading provider of hydrogen power generation technologies, is pleased to announce the strengthening of its partnership with ABB B.V. (“ABB”) in the area of high-power e-Mobility charging through execution of its first Sale and Development Agreement (“the Agreement”) in parallel with a subscription for new warrants in the Company.
- ABB orders first AFC Energy “S” Series fuel cell system for high power e-Mobility charging with a total contract value of £4m.
- Proceeds of the £4m order will be paid over a combination of system deployment milestones; first upfront payment of £2m invoiced immediately.
- The Agreement fast tracks AFC Energy’s high energy dense “S” Series anion exchange membrane (“AEM”) technology with delivery now expected ahead of schedule.
- Final system procured by ABB to have nameplate capacity of 200kW and be capable of hydrogen and ammonia fuelling.
- 200kW system to be engineered within 10ft shipping container (excl. ammonia cracker) illustrating market leading energy density of AFC Energy’s alkaline fuel cell technology.
- Order follows the successful integration trials of AFC Energy’s “L” Series fuel cell technology with ABB’s energy storage and high power EV charging platforms over the summer of 2021.
- £4m subscription by way of warrants at an exercise price of 58.8 pence per share gives ABB the option to increase their shareholding in the Company (“the Warrant Subscription”).
- Contracted delivery of “S” Series 200kW system scheduled for early 2023.
- Order builds on Joint Product Development Agreement and Commercialisation and Marketing Agreements signed with ABB in December 2020.
- 200kW “S” Series product specification to complement parallel use cases in data centres, heavy duty motive (such maritime) and off-grid power markets where ABB and AFC Energy are also collaborating.
- Both ABB and AFC Energy are engaging prospective customers of the new “S” Series system, highlighting the customer pull for the fuel flexible, high energy dense system performance.
Frank Muehlon, President of ABB’s E-mobility Division, said: “With the accelerating transition to electric vehicles there is an increasingly urgent need for additional fast charging capability and particularly in cost effective areas that are not grid connected or where the grid is constrained. Following our successful system integration in Europe over the summer, we believe AFC Energy’s new high power dense, zero-emission, hydrogen fuel cell system to be an important part of our solution that will allow us to make EVs accessible to everyone and further promote sustainable e-Mobility globally.”
Adam Bond, Chief Executive Officer at AFC Energy, said: “We are delighted to receive our first “S” Series fuel cell system order from ABB, following twelve months of high-quality collaborative work between our two companies. ABB’s £4m order enables AFC Energy to deliver a 200kW “S” Series charging system in early 2023 which is a material acceleration when set against our previous target of delivering a 10kW stack in the same period. AFC Energy is committed to supporting ABB in delivering sustainable e-Mobility infrastructure to the world’s growing fleet of electric vehicles. We believe our new “S” Series fuel cell platform will become the “go to” high performance fuel cell technology capturing multiple fuelling strategies, whilst affording best in class AEM power density and efficiency”.
Sale and Development Agreement – High Power e-Mobility Charging Applications
In December 2020, AFC Energy and ABB signed their first partnership agreements to create the next generation of high power sustainable electric vehicle (EV) charging solutions for grid constrained locations. These systems are to be powered by AFC Energy’s zero emission fuel cell technology.
The identified target market is ABB customers in regions where grid connectivity is absent or constrained for high power EV charging – a challenge becoming increasingly prevalent with the increase in vehicle electrification and the growing demand for rapid charging capability.
Over the summer, both companies successfully delivered a fully integrated charging system at ABB’s packaging facility in Estonia. AFC Energy’s “L” Series fuel cell technology was operated in conjunction with ABB’s energy storage and EV charging technology for the first time, validating the operability and communications architecture developed by the companies in the first half of 2021.
Following progress made by AFC Energy in delivering on its new high energy dense “S” Series AEM fuel cell technology, ABB and AFC Energy have now entered into a Sale and Development Agreement (“the Agreement”) for the purchase of a 200kW hydrogen powered fuel cell generator.
The fuel cell generator is expected to demonstrate a market leading energy density from an anion exchange membrane fuel cell and be housed in a container approximating the size of a 10ft shipping container. Importantly, the generator will be able to utilise both hydrogen and ammonia (as a hydrogen carrier) as its primary feedstock.
Proceeds received by AFC Energy under the Agreement will total £4m. Of this amount, £2m will be payable upon the signing of the Agreement, with two equal remaining milestone payments receivable on validation of system performance. Proceeds will be used to support the costs of system development and testing, together with recovery of AFC Energy overheads and the system’s overall purchase cost.
The 200kW system will be deployed at a customer or corporate location of ABB’s choosing.
To further align the interests of ABB and AFC Energy, ABB has been granted warrants to subscribe for 6,802,720 Ordinary Shares in the Company at an exercise price of 58.8 pence, being the market closing price on Friday 12th November 2021.
The warrants vest across three contingent tranches linked to receipt by AFC Energy of milestone payments under the Sale and Development Agreement, including the £2m payment receivable upon signing. The warrants have an exercise period of twenty-four months from the date of each respective tranche’s vesting date.
Any shares acquired under the terms of the warrants must be held for a minimum of 6 months following issuance. The warrants will not be transferable and will not be listed on AIM or any other exchange or market.
About AFC Energy
AFC Energy plc is commercialising scalable alkaline fuel cell systems, to provide clean electricity for on and off grid applications. The technology, pioneered over the past twelve years in the UK, is now deployable in electric vehicle chargers, off-grid decentralised power systems and data centre applications with emerging opportunities across maritime and rail as part of a portfolio approach to the decarbonisation of local electricity needs.
ABB (ABBN: SIX Swiss Ex) is a leading global technology company that energizes the transformation of society and industry to achieve a more productive, sustainable future. By connecting software to its electrification, robotics, automation and motion portfolio, ABB pushes the boundaries of technology to drive performance to new levels. With a history of excellence stretching back more than 130 years, ABB’s success is driven by about 110,000 talented employees in over 100 countries. www.abb.com