By Julian Singer
Powerhouse Energy (PHE) has developed a system that generates synthetic gas from even the most obdurate waste material and then uses the gas to produce hydrogen, electric power or chemicals. For the last two years its share price had bounced around a level of about 0.5 pence, but in late May this suddenly jumped to 3.6p, a level it has held since then.
While no doubt pleased, the company felt obliged to put out an announcement that “…it was not aware of any material basis for this rise over and above the Company’s previous announcements”. There does indeed seem to be no obvious cause for the increase. Maybe investors suddenly woke up to the attractiveness of a product that not only gets rid of waste materials from plastic film to tyres but then produces a useful form of energy with a substantial reduction in CO2 emissions compared to current conventional methods.
PHE received a prototype of its Distributed Modular Gasification (DMG) system three years ago from Australia, but progress towards a commercial product has been slow. PHE has never been keen on manufacturing its system. At one point a few years ago it had no income and no employees, all work being outsourced. It has still not produced any income and only reported four employees in 2019. As explained by the Chairman, Dr. Cameron Davies, the company sees itself as “a technology provider, with paid services for engineering, licensing and operational support”. Its annual reports are full of discussions about alliances with other companies.
PHE has for a long time had close ties with Waste2Tricity (W2T), a private company that describes itself as a solutions provider in the energy-from-waste sector, with strong connections in Thailand and elsewhere in Asia. Directors and employees have been shared between the two. In 2017 W2T were granted the exclusive license to market the DMG system in the UK.
In May 2019 W2T facilitated an agreement between PHE, W2T and Peel, a private group that develops waste and environmental technology projects mainly in northern England. Contracts were signed that allowed for DMG installations at eleven waste-plastic-to-hydrogen facilities, the first one being at Peel’s Protos Energy Park in Cheshire. The vision of hydrogen-powered refuse trucks delivering waste and refuelling at the same facility is a powerful one.
Peel was to obtain the funding. However Peel ran into difficulties with funders, who did not like the divided ownership and insisted that Peel should be the sole developer with exclusive rights to the DMG technology for the eleven sites. To solve this problem PHE acquired W2T in June in an all paper deal using PHE shares, while Peel will pay a one-off fee of £500,000 for the exclusive rights and an annual fee of £500,000 for each DMG plant that it develops.
In the meantime, in the real world, planning permission for the Protos development was granted in March. Hopefully Peel can now obtain the financing for Protos and the project will go ahead, but no date has been given for completion.
Thus Peel will become firmly in charge. It is tempting to speculate that PHE would have progressed more quickly if it had taken a more direct role in promoting and developing its product. Also, without further investment in its product it needs to be careful that competitors do not catch up with it. In any case with this project on the way PHE can start looking outside the UK for other opportunities. At least its investors are happy, for now.