What is the status of the development of micro-CHP technology based on fuel cells? As Stefano Campanari and Leonardo Rosés write from Italy, activity in Europe and the US is overshadowed by developments in Japan, but progress is being made on both SOFC and PEM devices.

Fuel cell (FC)-based micro-CHP (mCHP) systems are experiencing continuous progress, with the aim to move from R&D stages to demonstration and market deployment. Field testing and demonstrations are pushing ongoing cost reduction in FC-based mCHP technologies. For instance, Toshiba reported that the cost of its systems has fallen from 2004, to a fifth in 2007, as a result of the Japanese METI-NEDO-NEF programme. Similarly, the Vaillant systems employed in the European demonstration project ‘Virtual Fuel Cell Power Plant’, have achieved a 41% cost reduction, as a result of the project. The remaining costs are expected to decrease to more attractive levels by 2015, by which time a strong market growth is expected with acceptance of kW-scale units for residential applications.

As a measure of global R&D efforts, in fiscal year 2007 global funding for fuel cell industry was in the order of US$1.2 billion, this was made up in part by $360 million, $330 million, $156 million and $140 million for the US, European Union (EU), Japan and Germany, respectively.

In 2005, the European Hydrogen and Fuel Cell Technology Platform (HFP) defined future research and deployment strategies for this sector. An integrated 10-year programme of research, technological development and demonstration was outlined in pursuit of technology leadership; a total public and private resource of €7.4 billion is required for the proposed programme between 2007 and 2015. The programme is divided in four Innovation and Development Actions, one of them realtes to fuel cells for CHP and power generation. An important milestone is having 80,000 1-10 kW fuel cell systems for residential CHP installed, at a cost of under €6000/kW by 2015.

Within Europe new legislation frameworks, such as those derived from the European directive on the promotion of cogeneration (2002/91/EC), contribute to a growing market for residential micro-CHP. As examples of a government initiatives promoting, cogeneration, the UK government has lowered VAT from 17.5% to 5% for households that install mCHP systems, while Italy has developed a net metering approach to electricity tariffs for high efficiency CHP units up to 200 kW.

In the US, the Department of Energy (DOE) has the ‘Hydrogen Programme’. The DOE-EERE Office, within its Hydrogen, Fuel Cells & Infrastructure Technologies Programme, is the lead agency for directing and integrating activities in fuel cell R&D. Moreover, the DOE-FE Office, within its Solid State Energy Conversion Alliance (SECA) that was created in 1999, promotes development of solid oxide fuel cells (SOFC) for mCHP, amongst other applications.

Japan however, stands apart from the rest of the world in leading the installation of fuel cell technology, with the government playing a very active role in funding cooperative ventures. The Ministry of Economy, Trade and Industry (METI) supports R&D programmes in partnership with various other agencies.

Durability assessment and cost reduction for FC-based mCHP systems are the main obstacles to overcome in demonstration projects. In respect to durability, a maximum efficiency loss of 10% after 40,000 hours of lifetime would represent for a standard fuel cell a decay of 70 mV – from 0.7 V to 0.63 V, which represents a mean degradation rate of 1.75 µV/h. Ballard Power Systems Inc., which carried out demonstrations with polymer electrolyte membrane fuel cell (PEMFC) systems operating on simulated methane reformate, achieved a degradation rate of as low as 0.5 µV/h over 13,000 hours of operating time. Also on PEMFC systems, Osaka Gas reported a degradation rate of 2 µV/h over more than 12,000 hours of operation using simulated reformate. For mCHP SOFC systems, an average degradation rate of 10% per 10,000 hours of operation over a period of 12,000 hours test has been reported by Global Thermoelectric.


Future Cogeneration (2001) and the MicroMap (2002) studies are market oriented reports that developed assessment simulations issued by COGEN Europe. Results showed that between 5 million and 12.5 million mCHP systems could be installed and operating commercially in EU countries by the year 2020. This would result in carbon dioxide emissions savings of between 3.3-7.8 million tonnes per year. In addition, there is the potential to install 700,000 units in Central and Eastern European countries. Other EU research projects, such as ‘FLAME SOFC’ to develop SOFC with great fuel flexibility – from natural gas (NG) to biodiesel – and ‘NetGenCell’ that focuses on high temperature PEM fuel cells, deal with the development and testing of new FC-based mCHP systems.

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Baxi Innotech is involved in the German federal government’s Callux ‘lighthouse’ project, which aims to prepare the route to market for residential FC-based mCHP systems

The most noteworthy activity to date in Europe in terms of application of fuel cell technology has been the EU FP5 Project ‘Virtual Fuel Cell Power Plant’, which ran in 2004-2005. This cooperative, entrepreneurial €8.3 million project was pushed forward by 11 European partners and included Vaillant and Plug Power. In this project, 31 Vaillant 4.6 kWe + 9 kWth decentralized stand-alone residential PEMFC-based mCHP systems were installed in Germany, Portugal, Spain and the Netherlands. The systems were fed with NG, which was converted to a hydrogen-rich reformate stream for later use in the fuel cell.

Project successes included no system failures during the programme, overall efficiencies of up to 90% and electrical efficiencies greater than 30%. The trial achieved 138,000 hours of cumulative operation and produced almost 400,000 kWh of electrical energy.

In the UK, the Carbon Trust developed the Micro-CHP Accelerator programme over a period of five years (2003-2007), which aimed to investigate the potential benefits of the mCHP solution, testing field installations of 1-10 kWe systems, including fuel cells. By the end of prioject in November 2007 around 33,000 hours of system operation had been analysed.

The UK-based Ceres Power, through a $4 million programme with Centrica (British Gas), has integrated a SOFC into a 1 kWe + 1 kWth wall-mountable NG-CHP unit and aims to roll out the product to market in the second half of 2011. Based on a similar arrangement with Calor Gas, Ceres Power also established a $3.7 million programme to develop a liquefied petroleum gas (LPG) CHP variant, with its introduction to the market anticipated to begin in 2012.

In September 2008, Acumentrics reported field trials on its SOFC system AHEAD had begun. The system is said to be the first fully enclosed residential CHP unit designed to meet power and heating needs of an average European home, using a 1 kW tubular SOFC in combination with 24 kW condensing boiler operating on NG. The system is a joint creation by the US based SOFC developer Acumentrics and Italy’s Merloni TermooSanitari (MTS), which specializes in heating appliances. A unit comprising the tubular fuel cell on its own has already been tested for more than 10,500 hours and satisfying the minimum performance targets of the SECA programme.

Now, the tests on the whole CHP unit will be carried on by six operators, Centrica (British Gas), EnBW and E.ON in Germany, GDF Suez in France, the Netherlands’ Kiwa Gas Technology (representing the Dutch gas trading company GasTerra) and ENMAX Energy Corporation in Canada.

In February 2009, the Italian heating and boiler industry expert ICI Caldaie, in partnership with Exergy Fuel Cells, a subsidiary of Morphic Technology AB, and several other companies and research institutes won the Italian selection ‘Industria 2015’ with the project MICROGEN 30. The project, which was granted €6 million by the Ministry of Economic Development, is a 30 kWe + 50 kWth sized PEMFC-based mCHP system designed for residential applications. It will be developed and tested throughout the project, based on the experience of prototype units already developed by ICI Caldaie.

The German Federal Ministry for Transport, Construction and Urban Development (BMVBS) launched its Callux ‘lighthouse’ project, to help prepare the route to market for both manufacturers of residential fuel cell-based CHP systems and energy suppliers in September 2008. Callux is one of the major components of the German National Innovation Programme for Hydrogen and Fuel Cell Technology (NIP). Large-scale field trials will see more than 800 demonstration units in operation in single-family houses. The task of coordinating the NIP is being managed by the National Organization for Hydrogen and Fuel Cell Technology (NOW GmbH). Callux comprises a consortium of heating system manufacturers, Baxi Innotech, Vaillant, Viessmann and Hexis, together with gas and electric companies and the ZSW Center for Solar Energy and Hydrogen Research in Stuttgart.

The total funding for Callux amounts to €86 million, with BMVBS contributing approximately €40 million. Overall, BMVBS will provide up to a total of €500 million over the next 10 years to promote hydrogen and fuel cell technology through the NIP, with industrial partners required to commit at least the same amount.


In the US, the Industry Teams is one of the three groups forming the SECA, which is managed by the National Energy Technology Laboratory (NETL). Its goal is to develop SOFC system prototypes with a 3-10 kWe output within a three- phase programme ending 2008, 2010 and 2015, respectively. Six industrial teams are involved, working independently and therefore competing with each other, although all are committed to the concept of mass customization as the route to reducing the cost of fuel cell systems. Among the six teams, the ones working most intensively on stationary mCHP applications are Acumentrics, Fuel Cell Energy, General Electric Power Systems and Siemens Westinghouse Power Corporation.

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Phase I of the SECA programme was successfully completed before 2008. The six industry teams have successfully finished a series of rigorous tests on their SOFC prototypes, to evaluate system performance with respect to efficiency, endurance, availability and production costs. The prototype tests and system cost analyses were subjected to independent audits between June 2005 to December 2006, with additional validation testing performed at NETL’s fuel cell test facility. The Industry Teams’ prototypes surpassed the DOE Phase I targets, demonstrating average efficiency of 38.5%, peaking at 41%, which exceeds the DOE target of 35%. Average steady-stage power degradation was 2% per 1000 hours (target was 4%), with system availabilities averaging 97%, easily topping the 90% DOE target. The projected system cost estimates range from $724-$775 per kWe, fulfilling the $800/kWe DOE intermediate target.

The US Department of Defense together with the Engineer Research and Development Center (ERDC) and the Construction Engineering Research Laboratory (CERL), ran the Residential PEMFC demonstration project between 2001 and 2004. In total, there were 56 sites where five manufacturers installed 93 fuel cell systems, from which 27 were used in cogeneration. Results from the project were mixed but important experience was gained from its successes and failures. In their 2005 report, ERDC/CERL quoted that high availability was an aspect that had proved to be difficult to achieve, noting as a lesson learnt, the need for a strong, reliable communication system with the fuel cell for monitoring and being able to respond quickly, or in other cases the requirement for a specialized technician on-site. With respect to system efficiencies, these systems were intended basically for electricity generation: the mean heat recovery was as low as 11%, indicating that the systems were not optimized for heat recovery in a domestic application. Another take home message from the project was PEMFC systems were suitable for back-up power applications, in particular when used in a hybrid configuration with a battery array.

The US company Plug Power, in its partnership with the international natural gas and electric utility National Grid, is to conduct the first field trial of its new high temperature PEM-based 5 kWe mCHP system, GenSys. The firm received a $1.4 million award from the New York State Energy Research and Development Authority (NYSERDA) to install and operate three NG-fuelled units, providing electricity and heat to National Grid customers in New York. The three units are expected to be operational this year.


The METI-NEDO-NEF ‘Large Scale demonstration project’ for stationary fuel cells, which started in 2005, has installed 1 kWe fuel cell systems for demonstration tests in about 600 households. The government project, which concluded on March 2009, recorded millions of accumulated hours of power generation operation. The systems were supplied by different technology providers, utilizing three fuel cell types.

Further installations in fiscal year 2008 took place for another 1120 systems. As a result, fuel cell producers, energy providers and gas and oil companies worked closely, feeding all generated field data back to the NEF for analysis, promoting system advances and cost reduction, while allowing the end users to develop experience in operation and maintenance. The achievements of this united effort materialized when two of the developers announced the market release of ENE-FARM, the FC-based CHP system for residential use. Toshiba, on June 2009, and Eneos Celltech in the following September announced their 700 W NG-fuelled system at a price of ¥3,255,000 (€24,000) from which ¥1,400,000 (€10,500) will be subsidized by METI. This initiative is planned to be followed by the other manufacturers involved in the project.

SOFC technologies are also being brought forward to market by the Japanese government through demonstration research programmes, although less intensively than PEMFCs. Projects budgets speak for themselves: NEDO awarded in 2008, ¥2.71 billion (€20 million) for the ‘Demonstration of Residential PEMFC Systems for Market Creation’ but only ¥0.8 billion (€6 million) for the ‘Demonstrative Research on SOFC programme.

Panasonic, based on the results of METI’s large-scale field testing conducted since 2006, introduced improvements to its CHP system. The latest results based on household operations in Japan, indicate that the new system can achieve primary energy savings of 22% and carbon dioxide emission cuts of 12%, representing 3.26 kWh of primary energy and 330 kg of carbon dioxide with year-round operation. The company reported its intention of introducing its CHP system into the market by March 2010, and intends to sell 10,000 units in 2010, rising to at least 100,000 units in 2015.

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Australian-based Ceramic Fuel Cells Limited (CFCL) announced in July 2007 its partnership with E.ON, and later in the November of the same year, a joint venture with heating appliance developer Gledhill Water Storage on a combined project for the achievement and testing of 1 kW mCHP systems based on CFCL’s NetGenPlus technology. Moreover, last year CFCL signed an agreement with the gas appliances firm Paloma Industries in Japan to evaluate and develop its NetGenPlus integrated SOFC-based mCHP product under real-life conditions. CFCL also has product development agreements with other appliance partners and utility customers in Germany, France, UK and the Benelux countries.

Furthermore, the firm recently released its 2 kWe +1 kWth BlueGen product, and has a memorandum of understanding with VicUrban, the sustainable urban developer agency for the southern Australian state of Victoria, to showcase this CHP unit. When mass-produced, the BlueGen is forecast to cost around A$8,000 (€4700), with an approximate seven-year payback period and a 15-year operating lifetime.


Table 1 summarizes the most significant demonstration projects carried out on FC-based mCHP systems in recent years. At a glance, two observations can be made. Firstly, the fact that Japan has carried out more field trials than other governments, and secondly that the experience is being gathered mainly on NG-fuelled PEMFCs rather than on SOFCs.


Although mass commercialization has not yet been achieved by any of the fuel cell developers, some already have quite systems that are nearing deployment to the market.

European companies have been slower than North American’s ones in developing and patenting their technology. Germany and the UK have the greatest capability at present, although Germany has a more developed supply and value chains, with both large and small companies such as PEMEAS, MTU and Siemens Westinghouse, as well as a number of energy supply companies, which are committed to evaluating fuel cells in the field. Hence, 75% of all European installations are in Germany. Inter-European companies such as RWE, E.ON and Baxi, may, however encourage the market in the UK for stationary applications.

North America has been at the forefront of fuel cell development through Ballard Power Systems in Canada and UTC, FCE, Plug Power and Idatech in the US. The leading demonstrations of PEMFC technology for residential distributed generation applications have been conducted by GE Fuel Cell Systems in a joint venture with Plug Power.

In Japan, there were initially few companies actually producing fuel cells, with components being procured in the US for use in value-added systems. However, domestic systems are now under development. Market leaders in Japan are Panasonic, Eneos Celltech (Sanyo), Toshiba Fuel Cell Power Systems (TFCPS) and Ebara Ballard (EB), all of which have a PEMFC platform in the 1 kW range and account for 96% of the market – a market that is expected to grow from 1000 installed units in 2007 to 60,000 by 2010.

Although, the Ebara Ballard joint venture is being dissolved this year, Ballard will continue to sell its FCgen-1030v3 fuel cell product, including supplying Baxi Innotech GmbH for the German Callux Project. Also worth highlighting is the fact that the ENE-FARM from Toshiba and Eneos Celltech is the first system to become available to the residential user, which happened in June 2009.

Table 2  provides a summary of the most significant proposed FC-based mCHP systems from a wide variety of manufacturers and system integrators.


This work was funded by Fondazione Silvio Tronchetti Provera, within the framework of a PhD programme and by the Italian Ministry of Research and University under the PRIN2007 project.


Stefano Campanari and Leonardo Rosés are researchers at the Dipartimento di Energia of the Politecnico di Milano, Milan, Italy.
e-mail: stefano.camapanari@polimi.it