Micro-CHP technology aimed at single family households might, finally, be about to join the mainstream. As David Morgado and Jon Slowe report here, some products have emerged onto the market in Europe to join those already available in Japan, and units are now on sale in parts of the US too.
After many years of waiting, house-holds in several countries in Europe can now purchase a residential micro-CHP appliance – instead of a boiler – that is suitable for a single family. But the market’s growth rate and ultimate size is uncertain. Some European micro-CHP stakeholders foresee 2015 sales of only a few tens of thousands of units a year, while others forecast sales in hundreds of thousands.
This article sheds some light on European and wider global micro-CHP market developments and prospects. In summary, products are finding their way to market: there is some encouraging energy company and heating industry engagement, but in Europe and the US key uncertainties exist around consumer reactions to the micro-CHP offering, and how strongly governments will back micro-CHP.
While micro-CHP is set to establish itself in heating markets, a number of critical factors will determine whether it remains a niche product or becomes a significant part of the heating market.
THE LONG WAIT FOR PRODUCTS IS OVER
Boiler manufacturer BDR Thermea (the company formed by Remeha-De Dietrich and Baxi’s merger) is taking the lead, with the launch of its Ecogen and eVITA Stirling engine micro-CHP products. But it is closely followed by Efficient Home Energy with its new WhisperGen Stirling product. These firms have volume manufacturing and assembly facilities capable of manufacturing tens of thousands of units a year, with established channels to market. The primary target markets are the UK, the Netherlands and Germany.
Both these companies have mass production facilities in place, with their product available to households in 2010 – see Table 1. Several other boiler manufacturers are planning to follow this lead and are expected to enter the market within the next two years in France and Germany, the Netherlands and UK:
- Boiler manufacturer Vaillant has partnered with Honda to develop a 1 kWe internal combustion engine micro-CHP system for the German market, with expected commercialization in 2011.
Baxi’s Ecogen unit is built around Microgen Engine Corporation’s 1 kWe Stirling engine and comes with a hot water storage tank. It is available in Great Britain, primarily from utilities British Gas and Calor Gas.
- Both Vaillant and Viessmann are developing a 1 kWe Stirling engine micro-CHP system using the same engine as Baxi and Remeha. These units should be commercially available in 2011/2012.
- Bosch Thermotechnik and Ariston Thermo Group are trialling a Stirling based micro-CHP using Enatec’s engine.
All these systems essent-ially contain an engine and a supplementary burner. Under optimum operation, the engine runs as long as possible, with as few cycles as possible, and the supplementary burner meets peak thermal demands.
HOW DO THESE MICRO-CHP UNITS OPERATE?
The Stirling engine products – and the Vaillant-Honda system – all operate in heat-led mode. That is, they will run when the home has a need for heat – or, more accurately, when there is capacity within the hot water storage tank and the system controller calculates that the home will need this heat.
The one exception is Remeha’s eVITA system, which operates in ‘combi’ mode – a system that produces hot water for space heating, and instantaneous hot water for taps (without the need of a storage tank).
The advantage of this system is that it has no need for a hot water storage tank; the disadvantage is that the demand for hot tap water is met from the supplementary burner, rather than the Stirling engine, which reduces the amount of electricity that the system generates.
Even with these systems, there is potential to remotely control their operation according to the demands of the wider electricity system. As long as there is capacity within the hot water storage tank, the micro-CHP system could be centrally ‘dispatched’ if the wholesale electricity price is high, or if the distribution network is under stress, for example.
|1 kWe Baxi Ecogen|
|Built around Microgen Engine Corporation’s 1 kWe Stirling engine|
|Comes with a hot water storage tank|
|Available in Great Britain, primarily from utilities British Gas and Calor Gas|
|Stirling engine warranty for 15 years|
|1 kWe Remeha eVITA|
|Built around Microgen Engine Corporation’s 1 kWe Stirling engine|
|A combi unit – provides instantaneous hot water|
|Formally available in the Netherlands and Germany later in 2010|
|1 kWe Efficient Home Energy’s WhisperGen EU1|
|A 1 kW Stirling engine manufactured by EHE, a joint venture between New Zealand Stirling developer Whisper Tech and Spanish industrial group Mondragon|
|Available from distributors in Germany, Netherlands in 2010, and possibly from E.ON UK in 2011|
|Table 1. Three micro-CHP units available for European households|
OTHER PRODUCTS GET CLOSER TO MARKET
Other companies that are working hard to add to the list of commercially available products include Organic Rankine Cycle developer Energetix; solid oxide fuel cell developers Ceres Power, Ceramic Fuel Cells Ltd, Hexis and Vaillant; and PEM fuel cell developers Baxi Innotech and Hyteon.
Japanese fuel cell products may also arrive in Europe in the not-too-distant future.
Most European energy suppliers are still evaluating products. Some firms are testing a handful of units or tens of units in wider trials with staff and customers – with other companies watching from the sidelines.
A small number have taken the lead. Examples include British Gas and LPG supplier Calor Gas in the United Kingdom. Both now offer micro-CHP to customers, with a typically installed price tag at a little over £6000 (€7200) for the Baxi Ecogen system. E.ON UK may join them in 2011 with the Efficient Home Energy unit.
Gasag, a Berlin-based gas company, has set up an energy services company subsidiary that is offering micro-CHP to customers in Berlin and beyond.
All three of the Netherlands’ major energy suppliers have run extensive micro-CHP trials, although none of them have solidly integrated micro-CHP into their wider home services businesses.
JAPAN STILL AT THE FOREFRONT, FUEL CELLS GAINING TRACTION
Japan continues to lead the world with micro-CHP, as gas and LPG suppliers such Osaka Gas, Tokyo Gas and Nippon Oil use it as a weapon to grow gas sales and defend their market from a strong utility electric heat pump attack. At the moment, the electric utilities are winning, by selling hundreds of thousands of electric heat pumps each year, while fewer than 20,000 micro-CHP appliances are being sold. Government support has also been crucial for developing the country’s micro-CHP industry.
The Honda internal combustion engine-based ECOWILL system has been the only product on the market until this year, when it has been joined by fuel cells.
|Figure 2. Global micro-CHP sales have been flat over the last three years Source: Delta Energy & Environment, 2010|
Based on PEM technology and known as Ene-Farm, these systems are being sold in their thousands to homeowners and homebuilders, despite their high cost. Solid oxide fuel cells, with higher electrical efficiency, are being trialled in tens of homes with market launch expected for 2011/2012. To trigger further customer interest, gas utilities are pairing the ECOWILL and fuel cell systems along with photovoltaic panels.
The US has also seen some interesting developments. Homes in the northeast can purchase the ECR freewatt micro-CHP heating appliance from regional boiler manufacturer ECR International, with a new variant being developed that can be remotely dispatched to help meet electricity system peaks. Like the Japanese ECOWILL system, this product uses a Honda internal combustion engine. In California, ClearEdge Power is now selling fuel-cell micro-CHP to top-end homes.
EMERGING GLOBAL MARKET REACHES 38 MW
Delta’s latest ‘Micro-CHP Annual Roundup and Outlook’ report shows that global micro-CHP sales actually fell slightly last year, to just over 20,000 units. However, the market size grew slightly, up to 38 MWe of capacity, as sales of 5 kWe products to the German market (a mix of multi-family homes, single family homes and small business) edged up, after the introduction of attractive incentives from January 2009.
|The WhisperGen unit – a 1 kW Stirling engine manufactured by EHE, a joint venture between New Zealand Stirling developer Whisper Tech and Spanish industrial group Mondragon|
The Honda ECOWILL in Japan has provided the vast majority of these sales, although annual sales have fallen from 20,000 to 12,000 due to the economic crisis and competition provided by electric heat pumps.
EUROPEAN MARKET COULD TOP 100,000 IN 2015
At one level, the overall opportunity for micro-CHP in Europe is huge – well over 5 million boilers are sold throughout the EU each year.
Even taking into account that only a subset of these will be appropriate for micro-CHP, the size of the market opportunity is still at least several hundred thousand units a year. However, to start to exploit this, a number of key challenges must be overcome:
- Proving the product performance, reliability and lifetime of products from newly established manufacturing plants;
- Establishing a strong micro-CHP brand that excites customers, and understanding how to position micro-CHP to maximize sales;
- Strong energy industry and heating industry – including installer – engagement;
- Managing high initial product costs, and quickly rising volumes to drive down costs to acceptable levels;
- Securing state support to help manufacturers move down the volume-cost curve and enable the full value of micro-CHP to be captured.
Participants at Delta’s Fifth Annual ‘Micro-CHP in Europe’ Summit – held in June 2010 – had a range of views about how the market would emerge. Estimates for the European annual market size in 2015 ranged from less than 50,000 to more than 150,000 units per year. Much will depend on the above five factors. With European micro-CHP markets in their infancy, much uncertainty still remains about how quickly these markets will grow. The summit was attended by 50 European and Japanese energy firms, Europe’s leading boiler manufacturers, and several micro-CHP developers.
David Morgado and Jon Slowe are with Delta Energy and Environment, UK. Email: email@example.com
A wide range of technologies
Micro-CHP comes in some very different flavours – all having in common simultaneous generation of heat and power, but with some very different characteristics. One of the key differentiators is the combination of thermal and electrical efficiency. Figure 1 shows how the key technologies vary.
At one end of the spectrum, solid oxide fuel cells can produce more electricity than heat – effectively electrical generators with some heat recovery. At the other end of the spectrum, external combustion engines produce around 5 kW of heat – or more – for every unit of electricity generated.
The heat to power ratio is one differentiator of the different technologies – others include cost, size, weight, noise, reliability, lifetime and how quickly the system can modulate/start up/shut down.
|Note: Efficiencies shown are higher heating value Source: Delta Energy & Environment|
Figure 1. Technology options