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Linc Energy (LNC) is pleased to announce that it has signed an exclusive agreement with the UK-based Fuel Cell Technology company AFC Energy Plc and its related company, B9 Coal. AFC Energy is a UK based company developing low cost alkaline fuel cells that generate clean electricity from hydrogen. The agreement gives Linc Energy the exclusive right to test the AFC Fuel Cell Technology on hydrogen produced from Underground Coal Gasification (UCG). The AFC Energy fuel cell (known as the Alpha Fuel Cell System) is a compact Alkaline fuel cell system developed for the commercial power generation market. AFC Energy has granted to Linc Energy worldwide exclusive rights to utilise and operate AFC Energy Fuel Cells in conjunction with any UCG application for a period of 24 months (with an option to extend this agreement to 3 years if required).

Linc Energy will purchase the first Alpha Fuel Cell System for £200,000, payable in instalments based on delivery milestones, with delivery to Linc Energy’s demonstration facility in Chinchilla, Australia anticipated by late March 2010 but no later than five months from the date of the agreement. Linc Energy will have the option to extend the exclusivity period in perpetuity. To exercise this option Linc Energy must invest £2.3 million into AFC Energy stock at a price determined in reference to the market price at the time of exercise. Linc Energy will own the AFC Energy stock and have the right to freely trade the stock as appropriate.  For Linc Energy owned sites, Linc Energy will pay to AFC Energy an upfront payment calculated on the cost of delivery of fuel cell systems, and a royalty based on profits generated from the use of AFC Energy fuel cells. The project capital expenditure for power stations using AFC Energy fuel cells is forecast by AFC Energy to be less than traditional coal fired/IGCC power stations with lower long term operating costs and virtually no emissions, particularly when using UCG gas as the hydrogen source, ensuring a very competitive commercial model.

Linc Energy’s Chief Executive Officer, Mr Peter Bond said “It makes infinite sense to marry the cleanest power generation technology with the cleanest gasification technology. The picture of success is that you have a UCG field producing cheap and efficient UCG gas, with this UCG gas piped aboveground a short distance on the same gas field, adjacent to the fuel cell installation. There the gas is cleaned and put through a membrane to enhance the hydrogen percentage that is fed into a smart and compact Fuel Cell power generation facility that produces virtually no CO2 emissions. In fact the by-product that this power generation plant does produce is in high demand, and that is clean demineralised water. The green power produced will then be fed into the local transmission grid. The future of this concept is simply staggering. It could easily be the ultimate answer for clean coal power many of us are looking for, and it’s only one to two years away from reality.”

Linc Energy is an innovative, forward-thinking company developing a significant energy business based on the production of cleaner energy solutions. Linc Energy has successfully combined two known technologies, Underground Coal Gasification (UCG) and Gas to Liquids (GTL) and has demonstrated its vision of being a leading supplier of a new source of cleaner liquid transport fuels for the future. UCG technology provides access to coal, deep underground and by in-situ gasification  produces a high quality synthesis gas (syngas) containing carbon monoxide and hydrogen.

www.lincenergy.com.au