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[July 2007]
Ceramic Fuel Cells Signs Deal with E.ON's Powergen
Ceramic Fuel Cells (CFU.L: Quote, Profile , Research) (CFU.AX: Quote, Profile , Research) has signed a deal with E.ON (EONG.DE: Quote, Profile , Research), the firm which runs UK utility Powergen, to develop domestic heating boilers that also generate power that can be fed back into the grid.
The deal, announced on Monday, sent Ceramic's shares up 6.4 percent and comes as utilities try to pick out the technologies which will win the battle to produce electricity in the home.
Fuel cells which make electricity have been around for more than a century. But high costs and technical challenges have limited their commercial use.
Ceramic Fuel Cells, and rivals such as Ceres Power (CWR.L: Quote, Profile , Research) believe they are making strides in developing affordable and reliable boilers that produce electricity, using the gas they already use to generate heat.
The boilers are called combined heat and power units and a Powergen spokesman believed they could eventually be installed in every home in the country.
Creating electricity in the home, called microgeneration, is a more efficient method of generating power for homes rather than transmitting it down the grid from central power stations, and is also a way of cutting greenhouse gas emissions.
Powergen, which has six million customers, believes the mircrogeneration market could top 1 billion pounds ($2 billion) a year once the technology is developed, a spokesman said.
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Centrica's (CNA.L: Quote, Profile, Research) British Gas -- which is developing an electricity-producing boiler with Ceres Power -- said in April the microgeneration market could reach the 1 billion pound figure within five years, including other techniques such as solar panels.
Fuel-cell boiler units -- Ceramic is developing one which can generate around 1 kilowatts (KW) -- can help meet peak household demand, when utilities buy in extra power from more expensive power sources, such as gas-fired turbines.
Ceramic's unit can be used to meet average household demand, around 900 watts, and export to the grid when household demand is low, and also help meet demand of around four to six KW seen at peak times, Ceramic's Chief Executive Brendan Dow said.
"We don't want to overhype this deal. We're very excited but there's still a lot of risk and we don't want people to get frothy about it until we have a commercial product," he said.
Ceramic is now developing its technology with three utility partners including E.ON's Powergen, Germany's EWE and Gaz de France (GAZ.PA: Quote, Profile , Research). A fourth is expected shortly, Dow said on Monday.
Ceramic's unit is seen as capable of producing at least 5,000 KW/hours of power a year, a Powergen spokesman said.
"Such super-efficient boilers help save the planet as well," he said. Powergen has been developing another boiler-based unit from New Zealand-based WhisperTech for several years. Its units are expected to produce around 3,000 KW/hours a year but would only be suitable for homes with at least three bedrooms.
Ceramic's technology is seen as more widely usable, he said.
Ceramic will supply E.ON UK with one of its fuel cell units and a boiler to develop a prototype which can be used in a field trial. E.ON UK will contribute the majority of development costs, Ceramic's Dow said.
E.ON will have first option to buy Ceramic's products for sale in Britain. The fuel cell is expected to be delivered by December 2007 and the field-trial prototype to be developed in the second quarter of 2008, Ceramic said in a statement.
It hopes to have units with the look and cost suitable for mass production by the first quarter of 2009 and to be mass producing later in the year, Dow said.
Shares in Ceramic were up 6.4 percent at 46p by 1128 GMT, valuing it around 143 million pounds.
Ceramic is planning to announce its partner to manufacture its fuel-cell units in due course, the firm said.
ENDS