Clean Power Hydrogen plc (LSE:CPH2) has provided an update on its investigation into an incident involving its 1MW MFE220 membrane-free electrolyser during factory acceptance testing on 28 May 2026, identifying several potential contributing factors and outlining remedial engineering work.
The AIM-listed hydrogen technology developer said its internal investigation, which remains subject to external verification, identified gas velocity near valve V705, component specifications, system cleanliness and compliance with industrial gas guidance as the most likely factors associated with the incident.
According to the company’s preliminary findings, the incident was not attributed to a failure of its proprietary electrolyser stacks or separator vessels.
Clean Power Hydrogen has initiated additional research, redesign and testing activities to address the identified issues before incorporating changes into its technology and manufacturing processes.
Separately, the company announced changes to its proposed financing and commercial arrangements with Hidrigin, including the cancellation of a planned secured convertible loan note and discussions regarding an expanded technology licensing agreement.
Investigation Identifies Potential Factors Behind May Testing Incident
The incident occurred on 28 May 2026 during factory acceptance testing of Clean Power Hydrogen’s 1MW MFE220 membrane-free electrolyser system.
Following the event, the company conducted an internal technical investigation to assess the circumstances and identify potential contributing factors.
The investigation identified a combination of issues involving gas velocity in the vicinity of valve V705, component specifications, system cleanliness and the application of relevant industrial gas guidance.
Clean Power Hydrogen said these factors were considered the most likely contributors to the incident, although external verification of the investigation findings remains ongoing.
The company’s assessment did not identify a failure of the proprietary electrolyser stacks or separator vessels as the cause.
The findings remain subject to the outcome of the external verification process.
Engineering Redesign and Additional Testing Under Way
Clean Power Hydrogen has commenced remedial research, engineering redesign and testing activities following the investigation.
The work covers component design, system cleanliness procedures, manufacturing controls and operational monitoring arrangements.
The company intends to incorporate the results into a revised technical design package, which will be made available to existing technology licensees and prospective manufacturing partners.
The engineering programme is intended to address the factors identified during the investigation and establish updated specifications and procedures for future systems.
Clean Power Hydrogen has not provided a completion date for the redesign and testing activities in the supplied update.
The company continues to develop its membrane-free electrolysis technology, which is designed to produce hydrogen and oxygen without the membranes used in conventional electrolyser systems.
Hidrigin Convertible Loan Note Proposal Discontinued
In a separate commercial development, Clean Power Hydrogen and Hidrigin have agreed not to proceed with a previously proposed secured convertible loan note arrangement.
The companies have also addressed an interim payment associated with an existing sales contract, with the payment having been repaid.
Instead of pursuing the proposed financing arrangement, the parties are discussing an extended technology licence and a broader strategic partnership.
The revised commercial arrangements under consideration include rights for Hidrigin to use Clean Power Hydrogen’s technology for its own purposes in the United States.
The proposed changes represent a shift from the earlier financing structure towards a technology licensing and commercial relationship.
The company has not disclosed final terms for the proposed extended licence or confirmed that a definitive agreement has been completed.
Technology Licensing Remains Central to Business Strategy
Clean Power Hydrogen is continuing its transition towards a capital-light operating model focused on technology development and licensing rather than manufacturing electrolyser systems entirely in-house.
The company has developed proprietary membrane-free hydrogen and oxygen production technology over approximately a decade, supported by a portfolio of patents.
Its commercial strategy involves working with manufacturing and technology partners to develop and deploy electrolyser systems for hydrogen production applications.
The revised discussions with Hidrigin form part of this licensing-focused approach, while the engineering work following the May incident is intended to inform future system designs and manufacturing requirements.
Clean Power Hydrogen’s next operational steps include completing the external verification of its investigation findings, progressing the remedial engineering programme and developing the revised design package for licensees and prospective partners.
Further details of the proposed Hidrigin licensing arrangements remain subject to the outcome of discussions between the companies.
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