Delphi Reaches Development Milestone For Fuel-Flexible Solid Oxide Fuel Cell Power System
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Delphi Reaches Development Milestone For Fuel-Flexible Solid Oxide Fuel Cell Power System

SOFC auxiliary power systems can save 85 percent of the billion gallons of fuel consumed annually in the U.S. during extended idling of heavy trucks

TROY, Mich., June 20 /PRNewswire/ -- Delphi Corp. has reached an important milestone in bringing solid oxide fuel cell (SOFC) technology to market by 2011, according to the U.S. Department of Energy (DOE).

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A Delphi-led team working jointly with DOE's Office of Fossil Energy has achieved all Phase 1 goals of the Solid State Energy Conversion Alliance (SECA), according to Wayne Surdoval, DOE's SECA program manager.

The Phase 1 test, completed by Delphi in April and validated by the DOE in May, included four key performance and cost goals. The DOE determined that Delphi's SOFC unit met them all:

* Peak Power Performance -- Delphi's SECA demonstration system produced peak power of 4.24 kW on methane, the primary constituent of natural gas, achieving the goal of 3-10 kW.

* Peak Efficiency -- Delphi's system demonstrated a peak efficiency of 37 percent, exceeding the Phase 1 goal of 35 percent.

* Power Degradation -- Delphi's demonstration system matched the durability goal with power degradation of just 7 percent over 1,500 hours of operation.

* Factory Cost -- For factory cost, Delphi also met the Phase 1 goal of $800 per kW for the total power unit, assuming volume production, by achieving an estimated $770 per kW.

"The Delphi team has passed an important test," said Surdoval. "In meeting SECA's Phase 1 goals, Delphi has delivered to DOE's National Energy Technologies Laboratory a fully operational, highly compact demonstration system, capable of meeting the space constraints of many potential mobile and stationary power applications. Their leadership at the systems level has greatly advanced this team's progress toward a modular, broadly applicable SOFC power system by 2011."

Under SECA, Delphi has teamed with science and technology developer Battelle, its Pacific Northwest Division, and the DOE to aggressively reduce the SOFC system's cost, as well as its mass and volume, while increasing its efficiency and durability.

The DOE identified the SOFC as one of the more promising ways to generate electrical power more cleanly and efficiently for a wide variety of stationary and mobile power applications. Coordinated by the DOE, SECA is currently undergoing a 3-phase, 10-year program that began in 2001 to develop the SOFC technology to help reduce U.S. dependence on foreign oil, while mitigating environmental concerns. SECA's Phase 1 goals called for industry-led development teams to make meaningful progress in achieving cost, performance and durability improvements.

A major challenge is that the technology is difficult to develop, as it is based upon a whole new class of multi-layered ceramic materials. Additionally, the SOFC unit must be powerful and small enough for practical applications -- yet durable enough for years of trouble-free operation, as well as cost-effective to manufacture and for customers to buy.

"We're proud of the progress we've made during the past seven years developing this technology and we remain committed to maintaining our leadership in bringing this innovative SOFC technology to the global marketplace," said Guy Hachey, president, Delphi Powertrain Systems. "We have a fantastic opportunity to make cleaner and more energy-efficient electrical power systems, not only for vehicles and other mobile equipment, but also for stationary power generation."

Next Step: Delphi, DOE move into Phase 2 of the SECA program

Delphi and the DOE will continue its partnership under SECA, said Mary Gustanski, director of engineering, Delphi Powertrain Systems.

"Working with the DOE, we will proceed to Phase 2 of the program," Gustanski said. "Phase 2 will be a 3-year, cost-shared contract between Delphi and the DOE, valued at more than $45 million. Phase 2 goals will be to reduce the SOFC system factory cost to less than $600 per kW, to increase efficiency to 40 percent or more, and to further increase power density. The Delphi team will also work to increase durability, particularly to withstand more thermal cycles."

Ultimately, SECA's final goal in Phase 3 is to deliver an SOFC power system capable of 40 percent or greater efficiency at a factory cost of $400 per kilowatt. This performance will open up a wide range of mobile and stationary applications for this ultra-clean power generation technology, from small-scale multi-kilowatt auxiliary power systems for vehicles and homes to larger-scale multi-megawatt industrial and utility fuel cell power plants.

"Achieving the goals of the SECA partnership is important for U.S. economic, environmental and energy security concerns," said DOE's Surdoval. "Not only will Delphi's fuel-flexible SOFC system provide clean, efficient electrical power for vehicles of all sizes, but its modularity will enable economies of scale in manufacturing SOFCs for near-zero emission, larger-scale stationary power plants as well, a key objective for the FutureGen initiative."

Delphi's history in developing SOFC technology

Delphi has been developing SOFC systems since 1999. After demonstrating its first generation SOFC power system in 2001, Delphi teamed with Battelle under the SECA program to improve the basic cell and stack technology, while Delphi developed the system integration, system packaging and assembly, heat exchanger, fuel reformer, and power conditioning and control electronics, along with other component technologies.

Compared to its first-generation system in 2001, the Delphi-led team has reduced system volume and mass by 75 percent. By January 2005, the Delphi team was able to demonstrate test cells to DOE with power density more than required to meet the SECA 2011 goals.

"The latest testing demonstrates superior power density again, but this time in the form of complete fuel cell stacks, packaged and operating in highly compact, complete power units, about the size of a medium suitcase (2.3 cubic feet / 65 liters)," said Gustanski.

In addition to its compactness, another key advantage of the SOFC is its high system fuel-efficiency, particularly when its high temperature co-product heat can be used in combination with its high electrical output. For example, SOFCs can be teamed with gas turbines driven by the SOFC's co-product heat to potentially generate power at 55 percent to 80 percent thermal efficiency (depending on scale and fuel used). This is significantly more efficient than today's typical coal-fueled power plant thermal efficiency of 35 percent to 40 percent. By co-generating power on-site at industrial facilities, commercial businesses, or even residences, the SOFC's high-grade co-product heat will enable up to 90 percent efficiency in distributed, combined heat and electrical power (CHP) generation. Similarly, heavy-duty trucks will be able to utilize SOFC auxiliary power systems for both heat and electrical power when parked, to save 85 percent of the fuel that today they consume when idling their main engine, and likewise reduce idling emissions.

For the United States in total, extended idling of truck engines today consumes around a billion gallons of fuel annually, so the national potential for saving fuel and reducing emissions is significant.

While size and efficiency advantages are important for many potential applications, perhaps the SOFC's most significant advantage overall is its very broad applicability due to its inherent fuel-flexibility. With relatively small changes, SOFC systems can potentially operate on a full range of conventional and alternative fuels. This includes natural gas and conventional petroleum-based fuels like low-sulfur gasoline, diesel and propane; high-sulfur military fuels like JP-8 and jet fuel; low-CO2 renewable fuels from biomass like ethanol, methanol and bio-diesel; synthetic liquid fuels from coal and natural gas; and non-hydrocarbon fuels such as hydrogen and ammonia.

For more information about Delphi Corporation (Pink Sheets: DPHIQ), visit http://www.delphi.com .

FORWARD LOOKING STATEMENT

This press release, as well as other statements made by Delphi may contain forward-looking statements within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, that reflect, when made, the company's current views with respect to current events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the company's operations and business environment which may cause the actual results of the company to be materially different from any future results, expressed or implied, by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the company to continue as a going concern; the ability of the company to operate pursuant to the terms of the debtor-in-possession ("DIP") financing facility; the company's ability to obtain court approval with respect to motions in the chapter 11 proceeding prosecuted by it from time to time; the ability of the company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 cases; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the company to propose and confirm one or more plans of reorganization, for the appointment of a chapter 11 trustee or to convert the cases to chapter 7 cases; the ability of the company to obtain and maintain normal terms with vendors and service providers; the company's ability to maintain contracts that are critical to its operations; the potential adverse impact of the Chapter 11 cases on the company's liquidity or results of operations; the ability of the company to execute its business plans, including the transformation plan described in the Company's March 31, 2006 press release, and to do so in a timely fashion; the ability of the company to attract, motivate and/or retain key executives and associates; the ability of the company to avoid or continue to operate during a strike, or partial work stoppage or slow down by any of its unionized employees; and the ability of the company to attract and retain customers. Other risk factors are listed from time to time in the company's United States Securities and Exchange Commission reports, including, but not limited to the Annual Report on Form 10-K for the year ended December 31, 2004, and its most recent quarterly report on Form 10-Q for the quarter ended September 30, 2005, and current reports on Form 8-K. Delphi disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events and/or otherwise.

Similarly, these and other factors, including the terms of any reorganization plan ultimately confirmed, can affect the value of the company's various pre-petition liabilities, common stock and/or other equity securities. Additionally, no assurance can be given as to what values, if any, will be ascribed in the bankruptcy proceedings to each of these constituencies. A plan of reorganization could result in holders of Delphi's common stock receiving no distribution on account of their interest and cancellation of their interests. Under certain conditions specified in the Bankruptcy Code, a plan of reorganization may be confirmed notwithstanding its rejection by an impaired class of creditors or equity holders and notwithstanding the fact that equity holders do not receive or retain property on account of their equity interests under the plan. In light of the foregoing and as stated in its October 8, 2005, press release announcing the filing of its Chapter 11 reorganization cases, the company considers the value of the common stock to be highly speculative and cautions equity holders that the stock may ultimately be determined to have no value. Accordingly, the company urges that appropriate caution be exercised with respect to existing and future investments in Delphi's common stock or other equity interests or any claims relating to pre-petition liabilities.

CONTACT: Marie-Pierre Ygrie of Delphi Corporation, +33 1 49 90 47 52,
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Web site: http://www.delphi.com/
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