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Powerhouse Energy to enter waste plastic to hydrogen project

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Powerhouse Energy AIM:PHE, the Cottingley-based, AIM-listed waste-to-energy company announced that it had agreed a heads of terms agreement with Hydrogen Utopia International (HUI) to jointly develop a waste plastic to hydrogen project in Konin, Poland.

HUI, founded in 2020 is a UK-based plc listed on the Aquis Exchange, a stock market regulated by the UK Financial Conduct Authority and France’s Autorité des Marchés Financiers providing primary and secondary markets for equity and debt products. Aquis Exchange AIM:AQX is itself listed on AIM.

The agreement between Powerhouse and HUI will see the Konin Project located in the Wielkopolska province of Poland, developed on a 50:50 basis using Powerhouse’s proprietary technology that generates hydrogen from non-recyclable waste plastics.

Chemical Recycling

Powerhouse has been listed on AIM since 2011 and its primary product is Distributed Modular Generation (DMG) Technology, which is a form of chemical recycling of non-recyclable plastics, which are becoming a significant global pollution problem.

DMG is a form of advanced thermal conversion that takes unrecyclable plastics and recovers the maximum amount of calorific value, or energy, through an innovative approach to waste management. The end-of-life and unrecyclable plastics are exposed to high indirect temperatures causing them to break down into their constituent molecules, and through a series of endothermic chemical reactions, turn into energy-rich syngas which is similar to natural gas used for heating homes, cooking and after refining transportation fuel.

Powerhouse uses the gas rendered from the process to generate electricity – something that is a critical service given the current instability of the energy market due to the war in Ukraine. The chemical process also emits excess heat, which is captured and used for heating and cooling solutions locally.

Powerhouse opened trading at 1.77p. The company’s shares have ranged between 1.5p and 6.2p over 52-weeks, offering a year-to-date return of -60.7% and a one-year return of -53.4%. The company has a market capitalisation of GBP71.2m

HUI aims to become one of the leading new European companies specialising in turning non-recyclable mixed waste plastic into carbon-free fuels, new materials or distributed renewable heat. HUI’s activities will range across the full value chain, from the production of energy from non-recyclable mixed waste plastic for local communities, to the sale of its products, including syngas, hydrogen, electricity and heat to end customers.

Public-Private Partnership

HUI will target areas where there is significant private sector interest or potential, financial backing is accessible and or where substantial EU or government-funded sources of grants and loans are or may be available, such as the EU’s ‘Just Transition Fund’ which was set up to help fossil fuel dependent communities transition towards climate neutrality.

The global increase in fossil fuel-based energy prices reinforces the need for alternative, price competitive energy sources, which HUI’s business model can provide.

Powerhouse will not pay up front to enter the Konin Project, but HUI will be able to recover its costs when the project is commissioned, costs which to date to date are fixed at EUR250,000 (GBP 210,685) with a EUR250,000 premium. The intent is for the ongoing development costs of both parties to be capitalised at financial close and recovered through an appropriate mechanism to be agreed.

Skin in the Game

Powerhouse also recently entered a similar agreement with HUI at Lanespark, County Tipperary, Republic of Ireland, and it took a 50% shareholding in the Protos Plastics to Hydrogen No.1 facility in Ellesmere Port, Cheshire with Peel Environmental through its subsidiary Waste2Tricity, a company Powerhouse acquired in January 2020. The shareholdings represent Powerhouse’s policy to have skin in the game in all the projects where its technology is utilised.

Keith Riley, interim chairman of Powerhouse Energy said: “This formalises Powerhouse’s position in the Konin project and brings to an end speculation within the market on what Powerhouse’s role will be. We now have the task of agreeing the detailed documents for all three projects at Protos, Lanespark and Konin, which will conclude Powerhouse’s recently adopted policy of holding at least some level of control of the projects on which it embarks.”

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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