AFC Energy
Your Penny Sleuth’s latest outing has taken him to Dunsfold Park in the leafy Surrey countryside near Guildford.
This was built by the Royal Canadian Army as an emergency airfield in 1942 and after the war became a repatriation centre from which 47,000 prisoners of war were returned to their homelands.
Today Dunsfold Park is the location for Top Gear, but it is also a business park and I was there to visit AFC Energy, an AIM-listed company that believes it can radically reduce the cost and improve the reliability of fuel cells. Fuel cells combine a fuel – for example hydrogen – and oxygen in an electrochemical reaction, producing electricity, heat and by-products such as water. They hold the potential for efficient energy production that does no environmental damage, but they are not new.
The Alkaline fuel cell dates back to 1839 and has been followed, in chronological order, by the Solid Oxide fuel cell, the Direct Methanol fuel cell, the Molten Carbonate fuel cell, the Phosphoric Acid fuel cell and the Polymer Electrolyte Membrane fuel cell.
But the original Alkaline fuel cell, which was used in the US space program to produce energy and water on board spacecraft, has the advantage of operating at the relatively low temperature of 70°c, and this was a principal reason why it was chosen as the basis for a new design by Gerard Sauer.
In the 1990s, Sauer, a Dutchman, worked for Eneco on the integration of fuel cells into vehicle engines before he began to focus on the design of the fuel cell itself. When Eneco decided to concentrate on bringing hybrid power
systems to the market, Sauer and his team left and AFC Energy was formed by entrepreneur Howard White to take forward their work.
White explained to me that the ambition ‘is to produce the Model T Ford of the fuel cell industry’ - meaning that, like Henry Ford, they mean to use knowledge and techniques that exist today to design a fuel cell cheap enough for the mass market.
Electrode is the key
There is one crucial innovation within AFC’s fuel cell and this is the electrode. This is based on a substrata of non-woven plastic material coated with a metallic layer upon which is deposited further layers of critical materials that include the catalysts and conductors.
This electrode, which looks a bit like the silver paper you find in a cigarette packet, is just 200 microns deep, compared to the 1.5mm thickness of standard alkaline fuel cell electrodes. The projected cost of the electrode material is just $30 per kw, a 98% reduction from the $1500 per kw cost of conventional alkaline electrodes.
As well as their initial manufacturing costs the drawbacks of fuel cells have always included their unreliability and the consequent need for maintenance. Alkaline fuel stacks have shown sufficiently stable operation for more than 8,000 operating hours but to be economically viable in large scale utility operations, they need to reach operating times exceeding 40,000 hours.
This has not been achieved due to inadequate durability of the component materials. AFC believes that it has overcome this in two ways.
First of all by using the low temperature Alkaline fuel cell model it has been able to build fuel cells using low cost plastic rather than stainless steel, ceramics or precious metals. Secondly, it has designed the fuel cell in such a way that individual electrodes can be removed and replaced one by one in the event of their failure.
Existing fuel cells are closed stacks of electrodes and once there is any failure the entire system must be replaced. What AFC envisages is a low cost annual maintenance program under which the electrodes are changed every year, ensuring that the life span of the fuel cell exceeds ten years.
In addition to this AFC has designed a fuel cell that has substantially fewer components, has a unique system for managing the water that is produced as a by-product and has eliminated the need for a nitrogen pacification system to shut the system down. Thanks to these and other refinements, independent experts believe that AFC can halve the cost of fuel cells and meet many of the price targets for residential and light commercial markets. Next month AFC will deliver its first fuel cell system to Akzo Nobel, in Germany. Akzo is a producer of chlorine, an industry that is a voracious user of electricity and also produces hydrogen as a by-product.
The vision is to capture this hydrogen, convert it into electric power on site, and feed it back into the process of chlorine production. AFC’s vision is to take its fuel cells to the point where hydrogen is being produced and with the chlorine industry moving away from huge central plants to a larger number of smaller sub-stations the opportunities within this industry are growing.
If all goes well with the initial deployment for Akzo, AFC will then be ideally placed to target the global chlorine industry, which produces enough hydrogen to support 3,000MW per year representing a potential market of £1bn.
AFC is also studying the possibilities of the waste-to-energy market, and in May it found sufficient enthusiasm in the City to raise £4.4m in an oversubscribed new issue of shares at 11p.
Today, in common with shares of other innovative companies in the fuel cell industry, it has seen its shares slide to just 6p, valuing AFC at just £8m. If the initial installation with Akzo is a success then this should prove a bargain. This is definitely one to watch
Regards,
Tom Bulford
for The Penny Sleuth
