UK’s CPH2 abandons electrolyzer manufacturing after test incident

UK-based Clean Power Hydrogen has abandoned plans to manufacture its membrane-free electrolyzers after an incident during testing led to substantial damage to the unit, it said in a statement June 5.

The incident occurred during the third and final stage of factory acceptance testing of the company's 1-MW MFE220 unit, which it reported on May 29.

The electrolyzer was damaged during a standard shutdown procedure, and the company suspended test operations.

"A subsequent inspection at the test site and review of all available data indicate that the damage to the unit is significant and that it will not be possible to repair the system to allow the testing process to continue," CPH2 said in the June 5 statement.

The cause of the incident remains under investigation.

The company's chief technical officer and chief operations director said the unit would require "substantial redesign to ensure that the mixed gas system can be operated safely in all conditions."

As a result, the company will not recommence testing activities and will switch focus to non-manufacturing, commercial strategies for development.

"Whilst the board retains confidence in the potential of the technology, it has concluded that the company does not currently have the financial, engineering or technical resources" to carry out the redesign needed, CPH2 said.

The company said its intellectual property has "significant commercial value," and is exploring options to maximize value for shareholders and stakeholders, including potential licensing options.

CPH2 said its working capital remains constrained and there is "material uncertainty" over continuing operations. Discussions with capital providers are ongoing, it said.

As a result, trading in the company's shares on the London Stock Exchange's AIM remains suspended.

The company paused discussions with existing shareholders and prospective new investors on a potential equity capital raise following the incident, it said May 29.

Completion of factory acceptance testing was originally expected in May.

In March, the company signed a nonbinding memorandum of understanding with Siemens to scale up production of CPH2's technology.