Business Update

ITM Power PLC 01 September 2004 1 September 2004 ITM POWER PLC RESULTS OF ELECTOLYSER TESTING AND BUSINESS UPDATE ITM Power ('ITM' or 'the Company'), which aims to provide enabling technology for the hydrogen economy announced at the time of its flotation in June 2004 a number of important milestones for the Company that, if achieved, would indicate to investors its progress. Today it announces important progress in two key areas of its technology as well as developments in other areas of the business, that are an important first step towards the realisation of a cost competitive hydrogen economy. Electrolysis ITM has now successfully produced and tested a Mark III electrolyser stack, which has been operated at a power rating in excess of 200 Watts. 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 (an objective cost which includes 'necessary balance of plant'). Mark IV, an evolutionary development of the existing system, has now entered the design, build and evaluation process. Further progress in performance and increased cost reductions are anticipated. Additionally, ITM has commissioned the construction of an electrolyser test facility and is on track to undertake longevity testing work. Further announcements on the progress of the longevity tests will be made in due course. Jim Heathcote, CEO, ITM Power commented: 'It is important to have both low cost systems and good longevity results before we can fully assess the commercial potential of our scientific advances, but the fact that our Mark III system has been run at a power input in excess of 200 Watts indicates that we are well on track to achieve our milestone of 500 Watts by June 2006.' Materials ITM has formulated and produced a range of hydrophilic alkaline solid polymer electrolyte materials, which have now been operated in fuel cell mode. These materials provide a revolutionary starting point for the development of alkaline electrolysers with the potential for additional cost savings over and above those available to the acid based electrochemistry of the existing ITM systems as costed by The Generics Group. Jim Heathcote added: 'It is encouraging that we are also able to announce the creation of an alkaline fuel cell using ITM's materials. Alkaline electrochemistry opens the route to new lower cost catalysts which promise further cost reduction potential.' Other business development ITM is in discussions with a number of universities to outsource research into two peripheral but important areas of research; photoelectric devices using ITM materials which builds upon the recently granted ITM patent for photon augmented electrolysis systems; and secondly research which will focus on the production of tertiary hydrocarbons using electrolytic hydrogen and carbon dioxide recovered from the atmosphere. Taken together these projects will significantly extend the range of interests available to ITM without deflecting the Company from its core research programmes. For further information please contact: Jim Heathcote David Rae/Katherine Roe Gemma Smith/John West ITM Power Plc Durlacher Limited Tavistock Communications Tel: 01780 740574 Tel: 020 7459 3600 Tel: 020 7920 3150 fjh@itm-power.com gsmith@tavistock.co.uk Notes to Editors: The Generics Group The Generics Group is a leading integrated technology consulting, development and investment organisation, with an international reputation for successfully commercialising emerging science and technology. This information is provided by RNS The company news service from the London Stock Exchange