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PowerHouse Energy closes in on first commercial contract

"Our planned delivery programme for the UK is that DMG systems will be bought by partners and customers and located on host waste sites, with revenues for PowerHouse arising from sales and licences"

Green energy
PowerHouse is in the process of progressing planning and permitting assessments on the potential clients’ sites that are under negotiation

Clean energy technology firm PowerHouse Energy Group PLC (LON:PHE) is eyeing signing its first revenue-generating contract next quarter.

The company said it has seen a pick-up in interest in its proprietary DMG process recently and is confident that the enquiries will result in a first commercial contract for DMG.

READ: PowerHouse Energy to engage in “advanced commercial discussions” with Toyota Tsusho

The group said it has also had strong expressions of interest from more than a dozen site owners who would like to establish DMG units on their sites once PowerHouse’s first unit is proven operationally.

PowerHouse said it is currently collaborating on detailed site operational requirements, delivery programmes and framework contracts for six client sites in the UK where it is anticipated that the DMG process will be used first. As part of this process, potential customers or partners are undertaking their own due diligence on the DMG process, potential operational savings and the speed with which plants can be delivered.

PowerHouse explained that when this process is complete, heads of terms would need to be agreed before signing a formal contract.

“We would anticipate reaching a head-of-terms with at least one customer in the next quarter,” PowerHouse said.

The signing of contracts would initiate revenue generation for PowerHouse.

It is envisaged that the assembly of each DMG unit on site would involve the collaboration of an engineering, procurement and construction (EPC) specialist, and PowerHouse revealed it had been approached by “several blue-chip” EPC specialists who would like to work with PowerHouse across the globe.

The global reach of the potential EPC partners is important because PowerHouse is not just restricting its ambitions to the UK; it has also targeted the established Japanese hydrogen markets. Its development partner Waste2Tricity (W2T) is now in commercial negotiation with Toyota Tsusho Corporation, which PowerHouse believes could lead to Toyota Tsusho agreeing to be one of the companies introducing the DMG technology for hydrogen generation into Japan and other parts of Asia.

“Considerable progress has been made in terms of us maturing negotiations towards final contract stage and in dealing with the substantial increase in commercial leads,” said David Ryan, the chief executive officer of PowerHouse.

“I am confident that we will sign heads of terms with at least one of these in the next quarter.

“Our core focus is on securing the first contract, and the significant strides we have made in recent months and weeks are a strong indicator of the solid progress being made towards building the first DMG plant,” Ryan said.

Quick facts: Powerhouse Energy Group PLC

Price: 0.871 GBX

LSE:PHE
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Market Cap: £17.84 m
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