Technical Update

ITM Power PLC
08 January 2008



For Immediate Release                                             8 January 2008


                                 ITM Power plc

                            ('ITM' or 'the Company')

                      Progress Report and Technical Update


ITM Power Plc is developing technology to alleviate the present dependence on
hydrocarbon fuels. The technology facilitates the production of hydrogen by
electrolysis from sustainable resources and its re-conversion using heat engines
or fuel cells.

The Company announces today a progress report on the Demonstration Home
Refueller Electrolyser Unit and that it has successfully achieved the milestone
objectives previously announced for the end of December 2007. These milestones
include:


   • Construction and demonstration of 100W fuel cell stack design (with
     passive hydration system);
   • Development of a hydrogen-oxygen fuel cell - with estimated production
     costs of <$250/kW;
   • Development of 25kW electrolyser stack at production costs of <$200/kW;
   • Development of one-step Membrane Electrode Assembly (MEA) production
     process;
   • Further development of hydrogen/petrol bi-fuel car.


These results are important steps in the Company's progress from pure research
to the development of commercially viable fuel cell and electrolyser systems.


FUEL CELL DEVELOPMENTS

A development of a pre-production fuel cell stack and hydration system

ITM has successfully developed a cell stack design which it believes is suited
for high power density operation in commercial devices and this design has been
used to construct a 100W stack. In addition, the Company has sought to reduce
the cost of the entire system by designing a passive hydration management system
based upon its low cost hydrophilic materials. The resulting fuel cell employs
the '$500/kW' membrane catalyst technology announced in June 2007 and has
operated repeatedly at powers above 100W in a number of stack configurations
(including a 5 cell, high current and a 10 cell, high voltage array).

The development of a Hydrogen-Oxygen fuel cell with an estimated production cost
of less than $250/kW

The Company is pleased to announce that it has succeeded in meeting the fuel
cell stack cost reduction target for December 2007 of less than $250/kW if
produced in accordance with the assumptions set out previously on the 18 October
2006. The reduction in cost has been achieved both by increasing the power
density per unit area of the cell and reducing the loading of the platinum
catalyst. The Company has successfully operated cells using the lowest catalyst
loading currently available from commercial suppliers.


ELECTROLYSER DEVELOPMENTS

Development of a 25kW stack.

The milestone to develop a 25kW electrolyser stack was proposed on the 31
January 2006 and was intended to provide the Company with the technical basis
necessary to approach the next significant market area which interfaces with
commercial scale renewable energy systems, either Photovoltaic or wind powered,
and commercial transportation.

A 25kW stack has been constructed using ITM's nickel (hydrogen) catalyst and low
density platinum (oxygen) catalyst, which allows it to meet the projected
production cost (for the stack) of less that $200/kW. It has operated
successfully at low pressure when tested using inputs in excess of 25kW and a
transient (i.e. 30 minute on-off) load cycle. The unit proved well able to
handle the large gas volumes associated with low pressure operation without
excessive heating or hydraulic problems.


THE 'ONE-STEP' PRODUCTION PROCESS

The basic concept of a 'one-step' method of manufacture in which the ionic
membrane is polymerised in-situ within the catalyst, electrode structure to form
the MEA or cell, is a basic part of ITM's primary patent portfolio which has now
been granted widely around the world.

Development in this area has progressed steadily with the initial objective of
supporting the engineering of the prototype Home Refueller Unit. ITM is pleased
to announce that MEAs made by a one-step process can now be produced in
pre-production batches with excellent reproducibility and performance. These
MEAs have been extensively tested in electrolyser cells as incorporated into the
25kW electrolyser stack referred to above. On this basis the 'one-step' process
is now considered by the Company to be suitable for the electrolyser production
team to utilise as appropriate.

75 bar 10kW DEMONSTRATION HOME REFUELLER UNIT

The refuelling unit involves two separate engineering activities:

(i) the development of an injection moulded cell module to house the ITM
electrolyser cells and


(ii) the development of the associated balance of plant which controls the
pressure, manages the gas flows and maintains control to ensure safe operation.

The Company appointed external design experts to lead the design and production
of the injection moulded cell modules. Two complete pre-production units have
now been built and are currently being subjected to evaluation in a rigorous
engineering test programme. In the course of this extensive programme, the units
are being tested through a sequence of increasing pressures, temperatures and
gas production rates, at each stage being critically evaluated for effective
operation and safety.

At the end of December, these units have operated repeatedly at pressures up to
50 bar, as required by the evaluation programme. In addition, all the system
components have been proof tested to the maximum design pressure of 75 bar,
while the ITM electrolyser cells had operated satisfactorily at the maximum
design power and gas production rate.

The Company and its external consultants have experienced problems of quality
control, (particularly) in the manufacture of the prototype injection moulded
cell units and, ITM now believes that these problems are understood and are
amenable to solution in the production phase.

The Hydrogen Petrol Bi-fuel car development plan has continued with further
improvements to component reliability. The car is ready for public demonstration
and this will happen once we are satisfied we have completed the refuelling
system.


Jim Heathcote, CEO ITM Power, said :

'Overall in 2007 we have made tremendous strides in the development of fuel cell
and electrolyser systems. Especially pleasing is the progress in Hydrogen Oxygen
fuel cells where we have combined very low Platinum catalyst loadings with high
power densities to achieve the $250kW Fuel Cell Stack milestone, while in
parallel developing a working 100W demonstration fuel cell based upon the MEA
technology announced in July. This is a very important first step in developing
a low cost and durable fuel cell system for widespread commercial distribution.'

'The externally sourced injection moulded cell modules for the demonstration
Home Refueller have exceeded our requirements for safe operation at pressure of
50 bar. In addition they have been tested above our target of 75 bar but at this
pressure we do not feel we have yet achieved an acceptable safety margin due to
quality control issues. We expect to be able to announce we have resolved this
issue shortly.'



For further information please contact:

ITM Power plc                                                   01799 542 222
Jim Heathcote, Chief Executive Officer

Panmure Gordon & Co.                                            020 7459 3600
Katherine Roe

Buchanan Communications                                         020 7466 5000
Ben Willey

Richard Darby

Ben Romney



Notes to the Editors:

ITM Power is a developer of low-cost hydrogen technologies. The Company has
developed new materials and processes that dramatically reduce the cost of fuel
cells and electrolysers. The patented membrane materials used in the devices
have higher performance and are 1% of the cost of the industry standard
materials.

Electrolysers work by converting water and electricity into hydrogen and oxygen.
The hydrogen produced can be used as a replacement for fossil fuels and
facilitate zero carbon homes and pollution free motoring.

ITM Power was founded in 2000 and floated on the London Stock Exchange's
Alternative Investment Market in June 2004.



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