Morphic Technologies: Morphic Tests Tomorrow's Wind Turbines on Oland

STOCKHOLM, Sweden--(Business Wire)--
Regulartory News:

As part of the continued development of Morphic's (STO:MORPB) fuel
cell-based energy systems, the company will be testing a proprietary
20 kW wind turbine this fall in the toughest possible conditions on
the island of Oland off the coast of Sweden. All components in
Morphic's energy system are developed for large-scale production and
Morphic is involved in discussions with various players in all
applications areas regarding the introduction of the Company's energy
system.

"The markets we are targeting will have very high quality and
performance requirements, so we intend to test our products based on
international standards. Technical quality and high performance will
be characteristic of the wind turbine as well as for other components
in our energy systems," Jonas Eklind, Morphic Technologies' President
and CEO, says.

The energy system offers continuous electricity production with
the help of fuel cell technology. The system is suitable for
small-scale facilities as an alternative to, for example, diesel
units, but is also suitable for larger facilities for the purpose of
storing energy and offering continuous electricity production from
individual or larger groups of wind turbines.

"We will also be testing the wind turbine in applications, for
instance as part of local energy supply solutions for telecom base
stations, in agriculture and for electrification of villages in
developing countries - all for the purpose of being able to offer a
product that meets the customers' stringent requirements," Jonas
Eklind adds.

The test environment venture on Oland became possible through a
positive dialogue with the municipality of Morbylanga, the research
leaders at Station Linne and the owner of Parboang farm.

"We are very pleased with Morphic's decision and with their
product development, which will create many opportunities to show why
Oland has the best possible conditions for this type of industrial
development," Kent Ingvarson, municipal commissioner at Morbylanga
municipality, says.

"Parboang farm grows organic produce and produces organic meat
with an emphasis on local production, so having our own production of
electricity from renewal energy is a natural next step for us," the
farm's owner, Johan Parboang, says.

Morphic's energy system in brief

Morphic's energy system represents an entirely new way of
converting, storing and using energy from renewable sources. The
system converts energy from a wind turbine or other power generator
into hydrogen, or other energy bearer through a chemical process. This
fuel can then be stored and converted back into electrical energy at a
later time using fuel cells.

The purpose of Morphic's energy system is partly to enable local
production of electricity at a predefined cost and partly to increase
the share of energy produced from existing renewable sources of
energy. In local electricity production the market for the system is
divided into two categories: areas with infrastructure for electricity
production and areas without infrastructure for electricity
production. In the first category Morphic's system can be used for
generating electricity from biogas energy, e.g. from treatment works,
recycling facilities and agriculture. In the second category Morphic's
system can replace diesel generators. This includes systems for
powering telecom base stations.

A three-stage market launch

The market launch of Morphic's fuel cell-based energy system will
take place in three stages.

The first stage is in the market for non-grid-connected solutions,
a majority of which are currently powered by diesel generators. The
dominant application for Morphic's products is the powering of telecom
base stations but there are also other markets, e.g. local energy
supply in isolated locations, such as islands or deserts or isolated
border control stations with radar equipment. However, the initial
focus will be on telecom, where there is significant market potential
in countries with poorly developed electricity grids, particularly in
Asia and Africa. In India, for instance, a single operator will be
building 18,000 new base stations in 2009 and of these about half are
not expected to be connected to the grid.

The second stage of the market launch will take place when the
energy system can be connected to the grid but the investment can be
covered by the need for standby power. The goal is that the variable
costs for the energy system, taking account of any subsidies, should
be lower than the price of grid electricity. The market can consist of
businesses with access to biogas and/or wind that have a need for
continuous operation, such as big farms, industries, waste management
facilities and sewage treatment plants. The third stage will take
place when the cost optimization of the energy system has reached the
stage where it is able to produce electricity and heat that compete
directly with electricity from the grid and costs for heating. This
would open up the market to end users. A modular energy system can
then be marketed as a cost-effective alternative for household
electricity and heating. The market for combined heating and power
(CHP) solutions is expected to expand rapidly in the next few years in
line with the rollout of biogas.

About MBD

Morphic Business Development (MBD), a Morphic subsidiary, was
established in 2007 and currently owns, following a series of
acquisitions in 2007, development and expertise in all parts of a fuel
cell-based energy system for renewable energy.

The goal is to establish Morphic as a leading supplier of
high-efficiency energy systems for local production of electricity
using renewable energy sources.

This is Morphic

Morphic Technologies is a growing Swedish industrial group with
operations in fuel cells, wind power, energy systems and production
technology. It has operations in Sweden, Japan, Greece, Italy and
Switzerland, and employs around 170 people. Morphic's B shares have
been listed on the OMX Nordic Exchange since March 4, 2008. The number
of shareholders is about 22,000. The company's fiscal year runs from
May 1 to April 30.

This information was brought to you by Cision
http://newsroom.cision.com

Morphic Technologies AB
Johannes Falk, Director of Investor Relations
Tel: +46 (0)706-767393
johannes.falk@morphic.se

Copyright Business Wire 2008