Other AEC Products

In the early days of AEC's debut into the hydrogen industry, it developed a competitively-priced, on-demand and non-toxic hydrogen production unit (HPU) able to supply pure hydrogen to fuel a wide range of modified generators and engines. The Company intends to market these units at a time when the demand in alternative energy consumer and small commercial market makes it profitable to do so. Below is a more detailed description of AEC's proposed 'consumer' HPU.

AEC Hydrogen Production Unit (HPU) - H2 1500-A1

Described

AEC's Hydrogen Production Unit (HPU 1500 - A1) is a self-contained, semi-automated device that generates 99.99% hydrogen gas on an as-needed or on-demand basis. The HPU has unique flexibility in that it can be connected to a variety of hydrogen-fueled applications ranging from small power solutions such as fuel cells and converted internal combustion engines to large plants that require hydrogen for the hydrogenation of food-oils. Regulation of the HPU's hydrogen flow is computer controlled (PLC) and can be programmed to match the hydrogen requirement of the application being fueled.

To date, the Company has converted two internal combustion engines (ICE) to run on its hydrogen - a Honda 1 and 3 Kw genset. In addition, AEC's HPU 1500-A1 has run a 1 Kw and a larger Astris Powerstack 250 E8 2.4 Kw alkaline fuel cell. Both ICE and fuel cell generators emit water vapor as exhaust, with no toxic pollutants whatsoever.

AEC's demonstration unit has evolved significantly since the first unit was constructed in spring of 2005. Refinements to the computer interface and overall apparatus continue to be made by AEC's technical team with the long-term objective of a UL and CSA approved unit to be sold at the appropriate time (or leased) through prospective distribution channels.

Since AEC's expertise and strength lies in its ability to produce high quality and affordable hydrogen with its HPU technology, it has chosen not to focus on the power, or engine, side of the equation. Instead, AEC has decided that it will instead partner with existing reputable manufacturers of fuel cells and converted internal combustion engines to jointly offer a combined solution that meets the needs of prospective customers.

Applications

Fuel Cells

AEC's HPU has fueled a number of power solutions over the last 3 years, including fuel cells produced by Astris Energi Inc. (OTCBB: ASRNF), a leader in alkaline fuel cell development.

As mentioned earlier, due to the strict purity and volume requirements of a fuel cell, AEC's technical team worked with a number of recognized independent laboratories to ensure that outputs met acceptable levels for fuel cell application. Working with Astris Energi Inc, a world leader in alkaline fuel cell development, AEC used its hydrogen to power Astris' 1kw alkaline fuel cell. AEC further validated its proprietary process when its hydrogen successfully powered the Astris' 1kw golf cart on September 16th, 2003. As a result of this success, AEC went forward and purchased the first Powerstack 250 E8 2.4 kW Alkaline Fuel Cell from Astris' pre-commercial production facility in Vlasim, Czech Republic.

In May 2004, AEC and Astris entered into a VAR agreement, whereby AEC became a Value Added Reseller (VAR) for Astris' AFC Power Generator products. This VAR arrangement allowed AEC to demonstrate and make available a combined fuel cell or internal combustion engine power pack for sale to major corporate, industrial and energy utility customers, as well as demonstrations planned with U.S. Federal Government Energy and select Military authorities looking for a hydrogen-powered, fuel cell solution.

Internal Combustion Engines (ICE)

To date, AEC has fueled a variety of 'AEC-converted' off-the-shelf internal combustion generators ranging from 1 to 3.5 kW/h. Though these units have been exclusively used for research, development and demonstration purposes, they provide a practical example of a complete hydrogen-power solution, with a relatively low capital and operational cost when compared to a fuel cell. AEC's past road show included a number of successful demonstrations to several large manufacturers of internal combustion generators and engines throughout the country.

Future plans for AEC's power solution will be focused on the manufacturing of a hydrogen production unit which will combine with a hydrogen reciprocating engine, alternator, battery and inverter in an integrated package that can be located on-site for commercial, industrial or residential electricity customers. Ideally, at a competitive kWh cost for hydrogen, the unit may supply power to the building/home (5-7 kWh requirements) and mobile power application as a primary and backup power source. A smaller version of this generator package could potentially be used to recharge/run various small devices and machinery, portable generators (back up and primary), along with a battery pack to power electric vehicles.

Demonstrations

AEC has conducted demonstrations of its hydrogen production unit (H2 1500-A1). This unit successfully powered a 2.4kW Internal Combustion Engine and Astris Energi's model E8 2.4 kW Alkaline Fuel Cell for a variety of large commercial engine manufacturers. The demonstrations clearly proved AEC's ability to generate hydrogen and electricity to power a variety of devices.

Hydrogen Power Markets

Power solutions that utilize hydrogen for fuel fall into two principal categories: internal combustion engines or generators (ICE) or fuel cells. Currently, there are no retail or commercial generators that run exclusively on hydrogen. However, there are a number of internal combustion engines (i.e. vehicles) that have been converted and can run on gaseous hydrogen. The current generator market (non-hydrogen), including prominent OEMs and distributors (e.g. Honda, Briggs & Stratton generators) have an estimated market size in the several billion USD range. Fuel cells range widely in application and cost, and are currently the most readily used hydrogen power solution. Despite this, fuel cells currently have a limited market size due primarily to their comparatively high capital and operational costs per kwh produced. For this reason, at the time, AEC focused on the development of a HPU that would power an existing generator market.

HPU 1500-A1 - On Hold

As mentioned earlier, despite the potential of the AEC's HPU, the Company has decided to place the commercialization of this particular product 'on standby' until a more apposite time when there is anticipated to be a greater market appetite for hydrogen-powered products. Commensurate with this, certification (CSA and UL approval) of the Company's HPU 1500-A1 was also placed on hold.