An ambitious initiative across 12 European nations, involving utilities, manufacturers and research institutions, aims to test the potential for fuel cell micro-CHP in the EU residential market, reports Robert Stokes
Although Elcore GmbH, a German maker of fuel cell micro-CHP units, only has a few of its products in homes in its domestic market, it already has high hopes of selling plenty on a fully commercial basis from later this year before spreading its wings into other European markets.
The Munich-based firm’s optimism rests largely on being among nine suppliers picked in the €53 million (US$71 million) ‘European-wide Field Trials for Residential Fuel Cell micro-CHP’ project (Ene.field).
Under the initiative, European Union (EU) utilities, manufacturers, research institutes and universities will collaborate on field trials across 12 EU Member States with fuel cell micro-CHP units ranging from 0.3–5 kWe, and powered with natural gas and, subsequently, hydrogen.
By September 2014, 960 units are due to be installed, with each running as a demonstrator project for three years, during which lifecycle costs and barriers to commercialisation will be assessed.
For fuel cell micro-CHP, the project has come at a good time. Currently, no units are being sold on a fully commercial basis in Europe. Full launch targets have been pushed back and investor confidence is low.
“Many people that we speak to in the industry feel that it’s now or never for the technology,” says Scott Dwyer, micro-CHP research manager at Delta-ee, analysts based in Edinburgh, UK.
“But with things like Ene.field and other national field trial projects – such as CALLUX and NIP, both in Germany, and one in Denmark – we think it’s justifiable to expect a wave of product launches in the next two to four years.”
A range of technologies is to be scrutinised under Ene.field: high-temperature (HT) solid oxide fuel cells (SOFC); low-temperature (LT) SOFC; HT proton exchange membrane fuel cells (PEMFC); and LT PEMFC. The units will be integrated into various European heating systems – both floor standing and wall hung – either in the home or in separate installation cabinets.
The goals are to demonstrate market potential and segmentation; gauge the manufacturing and operating costs, and the environmental benefits of fuel cell micro-CHP; develop product specifications and harmonised codes and standards; ready a supply chain for commercial deployment of fuel cell micro-CHP in the 12 participating Member States; and provide evidence to speed up policy support from governments and broader adoption by new and existing sales channels such as through utilities.
The European Commission’s Fuel Cells and Hydrogen Joint Undertaking (FCH JU) is committing nearly €26 million to Ene.field over 60 months from 1 September 2012, as one of the Joint Technology Initiatives (JTIs) under the EU’s outgoing 7th Framework Programme for funding research and development.
The European Commission’s Directorate General for Energy (DG Energy) expects this spend to leverage at least the same commitment from participating industries, half of whom are small and medium-sized enterprises (SMEs), such as Elcore.
Insight into new markets
For Elcore, contributing to Ene.field is a no-brainer, given the benefits it believes it will reap from installing about 135 trial units in households in Germany and three other countries yet to be decided.
“Ene.field will give us exposure to foreign markets so that we can learn what customers there like and do not like,” says Martin Eichelbrönner, Elcore’s Sales and Marketing Manager.
“It will also introduce us to different certification regimes. This will be valuable to us, though one of the ultimate challenges that needs to be addressed is standardisation of these throughout Europe.”
This neatly reinforces key points about Ene.field. It will share the knowledge gained from testing a range of technologies in highly varied residential markets, climates and types of houses throughout the EU. Take Germany, for instance. Elcore already has a few units operating in homes there and plans to offer many more systems from late 2013, quite separately from its involvement in Ene.field.
According to Eichelbrönner, these commercial units will be offered at about €9000 each, inclusive of value added tax. Subsidies for micro-CHP units in Germany currently only cover up to €500 per unit, but Eichelbrönner says experience suggests that German customers would find the €9000 price tag acceptable, especially set against a claimed payback time of only seven or eight years, as well as savings of up to 50 per cent on their electricity bills.
Its approach is to offer units that ‘sweat’ for customers by working 24/7 to deliver baseload electricity of 300 We and baseload heating of 600 Wth. This value proposition has already been validated in Germany but Ene.field means that households in several other countries will get to assess this approach for themselves, said Eichelbrönner.
In the UK, €9000 (£7780) could look a bit steep to consumers who tend to grumble about having to spend even £1500 ($2300) on a replacement hot water boiler. So Ene.field aims to reveal the nuances of such socio-economic barriers to the deployment of fuel cell micro-CHP.
“In Japan for instance,” says Dwyer, “one of the main routes to market for fuel cell micro-CHP is through housing developers who build a huge number of houses each year and differentiate themselves, for example, by telling buyers they can generate their own power by having a fuel cell micro-CHP installed,”
But a larger proportion of people in Japan build or buy new homes rather than buying second-hand, which is more prevalent in Europe. “In Germany, a lot of heating systems tend to be sold by installers, who are generally quite loyal to manufacturers,” says Dwyer. “In the UK, France and the Netherlands there’s a low market for boilers as people just tend to buy them as a distress purchase and begrudge the price.”
And the end customer is more interested in their up-front cost and installation; the space that they take up; noise; ease of operation; energy savings; reliability; ongoing inspection, repair and maintenance costs; the service levels provided by installers and utilities; and, if they are sophisticated enough to take a long view, the payback time.
“Innovative business models will be crucial in Europe,” says Dwyer. “No-one knows which one will be successful, but we reckon that as soon as one takes off there’ll be quite a few companies trying to follow that.”
Targeting lower demand
Yet Ene.field is a large and expensive EU research project: €53 million is a huge sum for the trials, as is the €26 million from the EU, particularly when the private sector is already conducting extensive fuel cell micro-CHP field trials in Germany and Denmark.
Why invest so much? For one thing, DG Energy hopes the substantial public investment will catalyse the development of ways to overcome obstacles to the EU’s ambitious goal of cutting energy consumption by 20 per cent.
Based on the most recent figures available, EU households consumed 307.3 million tonnes of oil equivalent (Mtoe) of energy in 2010. Viewed another way, residential users consume 27 per cent of EU energy. Reducing this by a quarter would cut 6.75 per cent from EU energy consumption, more than a third of the targeted reduction.
Previous studies suggest this is achievable, according to DG Energy. It believes that policies adopted by the end of 2009 will help cut consumption by about 8 per cent by 2020. Some of the outstanding reduction can be reached through further measures on financing, more stringent implementation of the Energy Performance of Buildings Directive and the new Energy Efficiency Directive, says a spokesperson for DG Energy.
Across the EU, average energy consumption per household was 1.5 toe in 2009 and annual residential consumption for buildings was around 200 kWh per square metre. But, unsurprisingly given Europe’s varied climate and wealth, Member States showed considerable differences.
The share of micro-CHP in general in household heating and cooling currently ranges from zero to a fraction of a percentage depending on country, according to the Commission’s FCH JU. But DG Energy sees potential for all types of micro-CHP to yield collective “significant primary energy savings” in the residential and services sector through replacing less efficient heating and cooling options.
The Commission’s estimate of micro-CHP heaters’ market shares for space heating, based on devices with energy class labelling up to A+ are: 2010, 0.1 per cent; 2020, 1 per cent; 2030, 4 per cent. There is no differentiation between fuel cells and other types of micro-CHP in these estimates, but the anticipated trend is clear and fuel cell micro-CHP is of particular interest because of the alignment between its characteristics and residential energy use trends.
“The electrical efficiency of fuel cell micro-CHP is higher than for a normal CHP,” says Mirela Atanasiu, project manager at the FCH JU. “And we are moving towards everything being electrical, as it is in my own house. I do not need a boiler, and a fuel cell micro-CHP can provide more electricity and less heat.”
The current state of the art for fuel cell micro-CHP is 30 per cent electrical efficiency, overall efficiency of 70–85 per cent, a lifetime of three years, a capital cost per unit of €50,000 per kWe, and hand-made manufacturing. This is according to COGEN Europe, which co-ordinates and disseminates Ene.field on behalf of the FCH JU.
The expected performance with Ene.field will be 35-50 per cent electrical efficiency, up to 90 per cent overall efficiency, lifetimes up to eight years, capital costs ranging from €13,000 to €27,000 per kWe (excluding a 300 W unit involved) and with potential to get below €10,000 per kWe. The aim is to reach pre-serial to serial production too.
“The manufacturers do not see fuel cell micro-CHP as the only solution to cutting residential energy use, but as complementary to other solutions,” says Atanasiu.
Other features to Ene.field make delving beneath the headline spend instructive, according to Dr. Fiona Riddoch, COGEN Europe’s managing director. “It’s a big project by any standards, but a lot of the apparent complexity is in making the products themselves and that is something that the manufacturers are taking care of,” she says.
“Although the [financial] sums seem huge, much of that is because of the hardware involved. The advantage of Ene.field is that the manufacturers are taking responsibility for identifying implementation sites and carrying out field trials for their own units. So it is a fairly decentralised project with no central agenda and with everyone creating their own timescales within the overall remit.”
Ene.field gets underway
Manufacturers Hexis AG, Switzerland, and Baxi Innotech, Germany, will be first into field trials under Ene.field, says Atanasiu. “They were just waiting for the first payment from us, and they will deploy in the first quarter of 2013. We expect most of the project’s units to be in the field within two years to run for three years.” Hexis has been talking to municipalities in Slovenia, which could be the first locations involved, she adds. The Trento province of northern Italy is another location that has engaged strongly with the project, says COGEN Europe’s Dr. Riddoch.
On current plans, 233 units will be installed in the UK, 179 in Germany, 167 in Italy, 130 in The Netherlands, 90 in Denmark, 70 in France, 30 in Austria, 20 in Spain, 15 in both Luxembourg and Slovenia, six in Ireland and five in Belgium.
“HyER [Hydrogen Fuel Cells and Electro-mobility in European Regions Association], which promotes the use of hydrogen as an energy source, is an important partner in Ene.field in this regard,” says Antanasiu. “They have very good contact with regions and municipalities and have helped manufacturers find places to install units and put them in touch with utilities. So we now have all the actors in the project and some of the commercial interests will reach the point where they can really take the step forward to full commercialisation.”
COGEN Europe’s role is key, adds Antanasiu. “Because there are a lot of competing commercial interests involved, COGEN Europe is really the only one that can co-ordinate it.”
Its job is to work with the EU institutions funding Ene.field and to gather and disseminate information to interest groups for use by the industry.
Dr. Riddoch also points out the strong interest and commitment being shown by municipalities that are keen to be testbeds and which could eventually help to drag through a fuel cell micro-CHP market by choosing these systems for municipal housing and other public buildings.
“A market is no more than friends talking to each other about a product or hearing about it from some source. In that sense, regions are ideal multipliers of awareness and communication,” she says.
To win EU funding, the Ene.field partners had to confirm upfront that they had identified installation sites. “So the core sites have already been identified and the process is understood,” says Dr. Riddoch. COGEN Europe will be representing Ene.field at Hannover Messe industrial fair in April. “Come and see us,” she urges. The Ene.field plan foresees opportunities for increasing co-operation at Member State and regional level with a range of participants in the supply chain to the customer, she adds.
Big in Japan
As Ene.field springs into action, it has the Ene.farm field trials example from Japan to inspire it. Japan was installing 5000 fuel cell micro-CHP units in 2009 but is expected to bring 50,000 on line this year, according to Delta-ee’s Dwyer.
“In Japan, we saw huge corporations such as Panasonic sharing information with the big gas utilities and co-branding products, which has worked really well for them. Ene.field is the first time we’ve seen something similarly co-ordinated in Europe and it’s a step in the right direction.”
With this kind of lead in know-how, and with volume production bringing down their unit costs, could the Japanese enjoy a headstart in Europe if a real market develops? Is Europe just kidding itself that it can build an indigenous fuel cell micro-CHP industry of significant value?
“Japanese companies looking at Europe have a number of hurdles to jump” says Dwyer. “The gas quality’s different in Europe, the energy markets are different, the way people buy their heating systems, mean the Japanese can’t just sell a fuel cell micro-CHP product in Europe as they would a television.”
“So they will ask what part of the fuel cell unit could they have a cost advantage for? They could end up using the same pumps, pipes and casings as a European company. So they have to make the modifications and establish partnerships. “Nobody knows who’s going to have the ultimate advantage.”
Fuel cell mCHP suppliers to Ene.field are Germany’s Elcore, Bosch Thermotechnik, Baxi Innotech, Riesaer Brennstoffzellentechnik (RBZ), and Vaillant; Switzerland’s Hexis; the UK’s Ceres Power; Denmark’s Dantherm Power; and Italy’s SOFCpower.
The research partners are: The UK’s Imperial College, London, and Element Energy Ltd; Germany’s EIfER Europäisches Institut für Energieforschung, Gaswarme-Institut Essen EV, Gastechnologisches Institut gGmbH; Denmark’s Danmarks Tekniske Universitet; Italy’s Politecnico di Torino and ENVIPARK environment park.
Utilities that are full partners in Ene.field are: the UK’s British Gas; Italy’s Dolomiti Energia; Denmark’s Dong Energy; and France’s GDF Suez. Utilities that have signed letters of intent to participate include: Italy’s Edison, PVB, and ACEA; Slovenia’s GIZ DZP; Kiwa and Eneco, both of the Netherlands; Spain’s Gas Natural Fenosa; Germany’s Stadtwerke Rüsselheim; and Ireland’s Bord Gáis.
Co-ordination and dissemination roles are covered by COGEN Europe, HyER, Slovenia’s Development Centre for Hydrogen Technologies, and the UK’s Energy Saving Trust.
Robert Stokes is a freelance journalist, who writes on energy matters.