PowerHouse shares surge as it enters supplemental deal with Peel
Waste-to-hydrogen technology company PowerHouse Energy Group has entered into a supplemental collaboration agreement with Peel Environmental, it announced on Tuesday, which aims to accelerate the development of the Protos Energy Park and four further ‘DMG’ sites in the UK.
The AIM-traded firm said it had entered into the supplemental agreement with Peel, Waste2Tricity (W2T), and Waste2Tricity Protos, following the collaboration contract announced on 12 August.
It said the supplemental agreement would allow Peel to act as the developer of Protos, and four additional DMG sites in the UK, pending finalising the proposed acquisition of W2T by PowerHouse, with W2T relinquishing its entitlement to UK exclusivity for the technology and development rights of PowerHouse’s DMG technology.
The agreement was intended to prevent any delays in the development of Protos and the four further DMG sites, which had been identified as the most likely to be developed first.
PowerHouse said the remaining six sites under the collaboration contract remained unaffected by the supplemental agreement, although the technology and development rights would all revert to PowerHouse on completion of the proposed acquisition of W2T.
The board said the supplemental agreement contained arrangements for the monetisation of the DMG technology at Protos, which would include a £0.5m annual license fee payable to PowerHouse per project upon each project being commissioned.
Peel also agreed to pay PowerHouse £0.1m in historic back costs.
The PowerHouse license fees would include a 60-40 fee split with W2T, pending completion of the proposed PowerHouse acquisition of W2T.
PowerHouse’s board said in that context, due diligence and negotiations for the acquisition of W2T were proceeding.
An announcement would be made, and a circular convening a general meeting to approve the resolutions to effect the acquisition was expected to be posted to shareholders as soon as the arrangements are finalised, the directors confirmed.
“We very much welcome Peel Environmental taking on the role of developer for the Protos site,” said PowerHouse chief executive officer David Ryan.
“Their well reputed skills and experience of successfully developing major infrastructure projects will now be fully brought to bear on the roll-out of the first commercial DMG plastic to hydrogen facility at Protos and at future sites in the UK.”
Ryan said the current trial of the proposed plastic waste stream in the process demonstrator was continuing, with “excellent” gas production results for the output levels expected.
“This has facilitated our license fee negotiations resulting in this supplemental agreement.”
Tim Yeo, chair of Waste2Tricity, added that he was “pleased” to see the momentum continuing, as the details of the acquisition were being finalised.
“Peel’s Plastic Parks and the PowerHouse exclusive technology will be vital to help the UK tackle its unrecyclable waste plastic problem, so the acceleration of this activity is very much welcomed,” Yeo said.
Finally, Peel managing director Myles Kitcher explained that hydrogen was set to play “a major role” in the UK’s clean growth strategy, adding that his firm was “leading the way” in the north west of England.
“This agreement cements our relationship with PowerHouse and our support for their pioneering plastic to hydrogen technology.
“Working together, we will now be commercialising the technology at our Protos development in Cheshire before looking at other sites across the country where it could be rolled out.
“This is all part of Peel L&P’s contribution to the UK’s journey to zero carbon, where we can not only find a more sustainable way to treat plastic waste but also create a local source of low carbon transport fuel which will help tackle air quality issues in our communities.”
At 0930 GMT, shares in PowerHouse Energy Group were up 22.14% at 0.9p.