Direct Alcohol Fuel Cells offer the prospect of easily transportable and refuelable power for use in (for example) laptop computers and mobile communication systems where batteries now are becoming a limitation factor in performance. This market is projected to grow very rapidly when methanol fuel cells of acceptable cost can be made available, but the industry standard material for such cells remains Nafion®, a material that is costly and allows significant amounts of methanol to crossover the membrane reducing the efficiency and performance of the resulting fuel cell.

The DTI funding has allowed the Company to research, develop and patent additional materials specifically designed to operate with methanol as the
fuel.

ITM Power has produced new low cost materials, which have been tested as direct methanol fuel cells in both acid and alkaline forms. This is important because alkaline conditions allow for the use of lower cost, non-platinum catalysts, and ITM have successfully operated a laboratory scale DMFC using palladium in place of platinum on the fuel side as the catalyst.

ITM normally prefers ionic conductivity as the most important measure of performance for its materials and, as a result of this programme, the Company
has made low cost alkaline materials having conductivity values up to 40% greater than Nafion®. However, an alternative criteria commonly used for comparing materials for use in DMFC fuel cells is: the ratio of ionic conductivity/methanol cross-over (c/Dk); and alkaline materials developed during this programme and now subject to patent protection by ITM have been measured and found to have values of c/Dk 10 times that of Nafion® under similar conditions.

Jim Heathcote ITM's CEO said: 'ITM Power is most grateful for the support of the DTI in this successful project, which compliments the Company's work on hydrogen based fuel cells and electrolysers. The project has produced exciting technical results, which offer ITM access to a new, additional and potentially very valuable commercial area. In addition, it has allowed the Company to increase significantly its Intellectual Property portfolio and has illustrated the value of collaboration between industry and Government.'

About the hydrogen economy and ITM Power:

ITM is a leading technical innovator of fuel cell and electrolyser technologies for the hydrogen economy.

The future shape of the energy industry is being driven predominantly by the growth in the global demand for energy, the diminishing reserves of oil and by
the environmental impact of burning fossil fuels.

Hydrogen Economy:

  * Term used to describe the use of hydrogen as a critical element in the energy economy- of the future.
 
  * Benefit of hydrogen is that it has the potential to a be a totally 'clean' source of fuel
 
  * The vision is that low cost electrolysers produce hydrogen from 'clean' energy sources such as solar, wind and wave and fuel cells use this hydrogen to produce the electricity when its required
 
'If all the sunlight hitting the earth's surface in one hour was harnessed and converted into electrical power, it would be enough to fulfill mankind's energy
needs for a complete year' - BP Solar

Electrolysers, via an electrochemical process, convert electricity (from renewable energy inputs) and water into hydrogen (which can be stored) and oxygen and in turn fuel cells, via a similar process convert hydrogen and oxygen into electricity and water.

ITM announced in November 2004 that it had successfully produced and tested a Mark III electrolyser stack, which has been operated at a power rating in
excess of 200 Watts and are confident that the Company is well on track to achieve their milestone of 500 Watts by June 2006. On the basis of these
results, The Generics Group, an independent scientific consultancy, have estimated that in mass production it is possible to achieve $283 per kW. This closely approaches the 2010 US Department of Energy target of $300 for an electrolyser stack.

PEM fuel cells developed so far are currently estimated to cost several thousand dollars per output kW (for example, in February 2004, the US Department of Energy estimated the current cost of a fuel cell to be approximately $3,000 per output kW) whereas petrol engines are currently estimated at $50 per output kW.

ITM's Technology

ITM Power plc believes it has developed and patented the keys to revolutionise the hydrogen economy and is set to become one of the UK's leading innovators within the alternative energy sources industry.

ITM's ionically conductive polymer materials and manufacturing processes are used in the production of fuel cells and electrolysers, which are significantly
cheaper than those presently used in production. The technology offers high conductivity, hydration control and has the benefit of catalyst recycling. The Company has the ability to produce low cost fuel cells that meet the energy demands of a wide range of industries and specialist technologies including military, automotive and stationary fuel cell markets as well as the capacity to produce household items such as laptops, mobile phones and domestic
appliances.

ITM's has patented a new manufacturing process that allows a fuel cell/ electrolyser stack of cells to be made in a single process similar to a mass production casting process. The process is capable of producing cells or stacks of any shape that may also be flexible so that they can be moulded into smaller products, such as mobile phones. The Company has applied this technology to a low cost electrolyser that can convert carbon free energy into clean hydrogen fuel on site and on demand, therefore completing the circle of the
manufacturing process.