Technical Update - Milestones

ITM Power PLC
10 January 2006


Embargoed, for release at 0700h, 10 January 2006


                                 ITM Power Plc
                 Technical Update - Progress Against Milestones

ITM Power Plc ('ITM' or 'the Company'), which aims to provide enabling
technology for the hydrogen economy was admitted to AIM in June 2004. At that
time, the Company set out in the IPO prospectus a number of technical milestones
against which shareholders would be able to measure progress. These milestones
were:

(i)   a 20 watt flexible fuel cell June 2005 - successfully achieved and 
      announced on 30th June 2005
(ii)  a 250 watt electrolyser to be achieved by December 2005
(iii) a 250 watt fuel cell, also to be achieved by December 2005
(iv)  a 500 watt electrolyser by June 2006

ITM today announces the fulfilment of the three remaining technical milestones
(ii, iii & iv above).


Electrolyser Developments

During the past two years, it has become apparent to the Company that the
absence of a low cost, durable electrolyser is the single largest technical
obstacle to the implementation of the hydrogen economy. If available, such an
electrolyser would control the supply of fuel from time-varying renewable
resources (wind, wave and solar) and thus provide the potential to transform the
economics of the existing alternative energy supply system.


Power
As a consequence, ITM has devoted considerable effort to its electrolyser
programme. This effort has resulted in the production of an electrolyser (the
ITM Mark 4) which the Company is pleased to announce has been operated in excess
of 500 watts input as a steady state rating and at 1kW on a transient basis. ITM
therefore believes that it has achieved both of the outstanding electrolyser
objectives set out at the time of the IPO.


Longevity
The Mark 4 electrolyser employs the patented ITM ionomeric materials, which have
been subject to longevity testing and for which 500 hours was announced on 3rd
October 2005. These tests are ongoing and the Company is now pleased to announce
that the material has achieved in excess of 1000 hours of operation without 
external evidence of failure; these longevity tests continue.


Costs
In June 2004, ITM made public an estimate of production costs for the then
current electrolyser design (the ITM Mark 3), which was independently estimated
to be capable of production for US$283/kW. An independent costing analysis
(currently in draft) has now been provided for the improved technology used in
the Mark 4 device. This has allowed the Company to estimate a cost of production
of US$275 per kW for a device produced at the rate of 100,000 1 kW units per
annum.


Fuel Cell Developments

Power
The Company has successfully developed a hydrogen/oxygen fuel cell stack that
has achieved a peak power output in excess of 250 watts (fulfilling ITM's power
output IPO milestone) using conventional fuel cell architectures and some
recently developed proprietary radiation grafted materials (Technical Update
30th August 2005). The system was not optimised for cost, efficiency or size.
ITM believes that following further work, it will be able to build such higher
power fuel cell stacks using the Company's patented one shot production process
and low cost materials with a number of different fuel options. The precise
timing and nature of this fuel cell development work will depend on the outcome
of the durability testing of the Company's patented materials, which is ongoing
in the electrolyser programme.

Jim Heathcote, ITM's CEO, commented: 'One of the most exciting aspects of our
progress to date is the outstanding success of the electrolyser programme. I
believe that this technology holds the key to the efficient integration of
renewable non-oil energy supplies into the existing energy system. However, for
this to happen, low cost-over-life modular electrolysers are needed.
Cost-over-life is directly determined by initial capital cost and durability in
real life environments and that is why the independent costing of our
electrolysers and the longevity trials - now at 1000 hours of operating time in
an intermittent operational cycle - are so encouraging.

'In the fuel cell programme, we have achieved all the original IPO objectives
and have additionally demonstrated ITM's ability to make fuel cells which
operate using all the commercially significant fuel systems now under
development (hydrogen-oxygen; alcohol, and sodium borohydride). Our portfolio of
patented intellectual property and know-how give us a potentially invaluable
base from which to begin the next development phase of the Company.'

A briefing on the technical update will be held at 12 noon today for analysts
and investors at Tavistock Communications, 8th Floor, 131 Finsbury Pavement,
London, EC2A 1NT, please contact Gemma Chandler or Simon Hudson if you would
like to attend.

                                     -Ends-
                                        

For further information please contact:

Jim Heathcote           Gemma Chandler / Simon Hudson  Katherine Roe
ITM Power Plc           Tavistock Communications       Panmure Gordon & Co
Tel: [phone]       Tel: [phone]             Tel: [phone]

or visit www.itm-power.com



Notes to Editors
----------------

About the hydrogen economy and ITM Power:

ITM is a leading technical innovator of fuel cell and electrolyser technologies
for the hydrogen economy.

The future shape of the energy industry is being driven predominantly by the
growth in the global demand for energy, the diminishing reserves of oil and by
the environmental impact of burning fossil fuels.


Hydrogen Economy:

   • Term used to describe the use of hydrogen as a critical element in the
     energy economy of the future.
   • Benefit of hydrogen is that it has the potential to a be a totally
    'clean' source of fuel
   • The vision is that low cost electrolysers produce hydrogen from 'clean'
     energy sources such as solar, wind and wave and fuel cells use this 
     hydrogen to produce the electricity when it's required

'If all the sunlight hitting the earth's surface in one hour was harnessed and
converted into electrical power, it would be enough to fulfil mankind's energy
needs for a complete year' - BP Solar

Electrolysers, via an electrochemical process, convert electricity (from
renewable energy inputs) and water into hydrogen (which can be stored) and
oxygen and in turn fuel cells, via a similar process convert hydrogen and oxygen
into electricity and water.

ITM announced in November 2004 that it had successfully produced and tested a
Mark III electrolyser stack, which has been operated at a power rating in excess
of 200 Watts and has now achieved its milestone of 500 Watts. On the basis of
the Mark III results, The Generics Group, an independent scientific consultancy,
have estimated that in mass production it is possible to achieve US$283 per kW.
This is below the 2010 US Department of Energy target of $300 for an
electrolyser stack.

PEM fuel cells developed so far are currently estimated to cost several thousand
dollars per output kW (for example, in February 2004, the US Department of
Energy estimated the current cost of a fuel cell to be approximately $3,000 per
output kW) whereas petrol engines are currently estimated at $50 per output kW.


ITM's Technology:

ITM Power plc believes it has developed and patented the keys to revolutionise
the hydrogen economy and is set to become one of the UK's leading innovators
within the alternative energy sources industry.

ITM's ionically conductive polymer materials and manufacturing processes are
used in the production of fuel cells and electrolysers, which are significantly
cheaper than those presently used in production. The technology offers high
conductivity, hydration control and has the benefit of catalyst recycling. The
Company has the ability to produce low cost fuel cells that meet the energy
demands of a wide range of industries and specialist technologies including
military, automotive and stationary fuel cell markets as well as the capacity to
produce household items such as laptops, mobile phones and domestic appliances.

ITM has patented a new manufacturing process that allows a fuel cell/
electrolyser stack of cells to be made in a single process similar to a mass
production casting process. The process is capable of producing cells or stacks
of any shape that may also be flexible so that they can be moulded into smaller
products, such as mobile phones. The Company has applied this technology to a
low cost electrolyser that can convert carbon free energy into clean hydrogen
fuel on site and on demand, therefore completing the circle of the manufacturing
process.




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