Clean Power Hydrogen Faces Funding Pressure After Test Incident as It Shifts to IP Licensing Strategy
Clean Power Hydrogen has confirmed a significant shift in strategy following a technical incident during factory acceptance testing of its MFE220 1MW electrolyser, alongside growing financial pressure that has left the company seeking fresh funding to support its revised business model.
The UK-based green hydrogen technology firm said structural damage occurred to the MFE220 unit during the final stage of factory acceptance testing at its test site, after a hydrogen-oxygen mixture is believed to have ignited during automated system depressurisation, leading to a loss of containment. The company stressed that no personnel were injured during the incident.
An initial internal assessment has indicated that the firm’s proprietary membrane-free stack and associated separators were not responsible for the failure. However, the root cause of the incident remains under investigation, with a full technical report expected by 31 August 2026.
Following the incident, the unit remains non-operational until a full review is completed and any remedial design changes are tested. The company said it will undertake further component-level testing before any attempt to resume full-scale operations of the MFE220 system.
Despite the setback, Clean Power Hydrogen said its earlier MFE110 unit had successfully completed both factory and site acceptance testing, which it believes demonstrates the underlying technical merit of its membrane-free electrolyser technology. However, the board acknowledged that the company currently lacks the financial and engineering resources required to complete large-scale manufacturing and commercial deployment of the MFE220 system.
As a result, the company plans to move away from a capital-intensive manufacturing model and instead adopt a more capital-light strategy focused on research, intellectual property development and global licensing agreements.
The company said it has now secured 16 patents across 12 jurisdictions, including the United States, Japan, India and several countries in the Middle East, with a further 17 patents still pending. It also highlighted existing licensing arrangements with three companies across 12 countries, alongside additional partnerships and ongoing commercial discussions with potential manufacturing collaborators.
Clean Power Hydrogen added that it is continuing discussions with insurers regarding a potential claim linked to the MFE220 incident, as well as negotiations with commercial partner Lagan MEICA Ltd concerning the original supply agreement for the unit.
In response to the strategic shift, the company has announced major leadership changes. Richard Scott, currently Chief Commercial Officer, is set to become Chief Executive Officer following regulatory approval, while James Hobson will remain Chief Financial Officer. Natalie Fortescue will assume the role of Non-Executive Chair, with Rick Smith continuing as Independent Non-Executive Director.
Outgoing Chief Executive Officer Jonathan Duffy and Non-Executive Chair Christopher Train have both offered their resignations and will step down following completion of a planned fundraising process.
The company also confirmed it is in discussions with investors and brokers regarding a potential equity raise aimed at strengthening its working capital position and supporting the transition to a licensing-focused model. The fundraising is expected to include institutional and retail participation via a bookbuild structure.
Clean Power Hydrogen warned that its current cash position is sufficient only to support operations until mid-July 2026, and said there is no certainty that the proposed fundraising will be completed successfully.
If successful, the capital injection would enable the company to continue development under a reduced cost base, focusing on monetising its intellectual property and forming strategic manufacturing partnerships rather than directly scaling production.
The announcement marks a pivotal moment for the company as it attempts to reposition itself within the competitive green hydrogen sector, balancing technical progress in electrolyser technology with urgent financial restructuring needs.
