SOURCE: AlumiFuel Power Corporation

AlumiFuel Power Corporation

May 31, 2012 07:00 ET

AlumiFuel Power Expands Its Visibility in Multi-Billion Dollar Back-Up Power Market

More Major Industry Players Taking Note of Company's Technology

CENTENNIAL, CO--(Marketwire - May 31, 2012) - Early production stage hydrogen generation company AlumiFuel Power Corporation (OTCBB: AFPW) (the "Company") through its operating subsidiaries, announced today that it is pursuing an increasing number of opportunities to address industry back-up power applications with its AlumiFuel cartridge-based technology. Beyond what was reported in the AFPW news release of May 2, 2012, additional industry and government players have now expressed interest in validating the Company's unique hydrogen generation technology to provide a viable new source of hydrogen for these applications. A Non-Disclosure Agreement has just been signed with a major equipment supplier to the wireless telecomm industry, and another one is in process with a major wireless telecomm carrier.

The large and growing U.S. back-up power market, traditionally served by lead-acid batteries and gasoline or diesel generators, is increasingly adopting hydrogen PEM fuel cell systems to replace these earlier technologies. The size of this market is enormous -- $6.4 billion for the emergency response segment (police, fire, medical, disaster preparedness) and an even larger multi-billion dollar segment for the telecom and financial services industries. All of the national wireless telecomm carriers (AT&T, Verizon, Sprint Nextel, T-Mobile and Metro PCS) have begun installing fuel cell back-up power systems. As of early 2012, over 1,100 fuel cells had been installed at cell phone tower sites, most of which are 5kW systems. In addition, the U.S. Department of Defense has embarked on a pilot program to install fuel cell back-up power systems on 19 military installations. The principal fuel cell companies with products in this market include Altergy, ReliOn, Plug Power, Ida Tech, Ballard, Hydrogenics, Intelligent Energy and Nuvera. Also, companies such as Logan Energy serve as systems integrators in this market, matching various fuel cell products with customers' requirements.

This transition to fuel cell systems for back-up power is being driven by a number of important factors: (1) Lower fuel cell prices -- 80% reduction since 2002 and 35% reduction since 2008. (2) Cheaper life-cycle costs -- 25-50% over 10-15 year period. Verizon reports that use of a fuel cell back-up power system at its New York headquarters saved $680,000 over the first year of operation. (3) Higher power density and longer continuous runtimes. (4) Easier maintenance. (5) Remote monitoring capability. (6) Cleaner -- no dirty lead-acid batteries and no harmful emissions.

Today, most of these systems rely on K-Cylinders to provide the hydrogen for the fuel cells. Virtually all of the fuel cell companies and carriers are seeking a better hydrogen solution for back-up power systems. The use of K-Cylinders for these applications entails high logistics costs, handling difficulties, and continuous high-pressure storage risks. AFPW has developed a solution for a 5kW system which would replace 6 K-Cylinders with 6 large AlumiFuel cartridges (48"x 5" diameter). This solution results in a much cheaper logistics chain (the cartridges can be disposed of in city dumps), on-demand hydrogen under very low pressures instead of constant high pressures, twice the back-up power runtimes, and a lighter weight power cabinet. In this regard, AFPW has expanded its dialogue with key industry and federal government players. As an increasing number of potential collaborators become aware of the advantages of the Company's technology, AFPW is exploring various engineering development scenarios for integrating the Company's technology into fuel cell back-up power cabinets -- which would put the company into this marketplace.

The Company's Chief Technology Officer, Mr. John Boyle, said, "Back-up power applications represent an ideal extension of our lift gas hydrogen generation technology and products, and provide the Company with a very large and exciting new market segment to pursue."

About AlumiFuel Power Corporation
AlumiFuel Power Corporation, operating through its subsidiaries, is an early production stage alternative energy company that generates hydrogen gas and steam/heat through the chemical reaction of aluminum, water, and proprietary additives. This technology is ideally suited for multiple applications requiring on-site, on-demand fuel sources, serving National Security and commercial customers. The Company's hydrogen feeds fuel cells for portable and back-up power; fills inflatable devices such as weather balloons; can replace costly, hard-to-handle and high pressure K-Cylinders; and provides fuel for flameless heater applications. Its hydrogen/heat output is also being designed and developed to drive fuel cell-based and turbine-based undersea propulsion systems and auxiliary power systems. The Company has significant differentiators in performance, adaptability, safety and cost-effectiveness in its target market applications, with no external power required and no toxic chemicals or by-products.

Safe Harbor for Forward-looking Statements
This news release may contain forward-looking statements that are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. While these statements are made to convey to the public the company's progress, business opportunities and growth prospects, they are based on management's current beliefs and assumptions as to future events. However, since the company's operations and business prospects are always subject to risk and uncertainties, the forward-looking events and circumstances discussed in this news release might not occur, and actual results could differ materially from those described, anticipated or implied. For a more complete discussion of such risks and uncertainties, please refer to the company's filings with the Securities and Exchange Commission.

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