Massachusetts-based Tecogen, a next-generation manufacturer of natural gas-fuelled, engine-driven, combined heat and power products is entering into a 50/50 joint venture with Czech firm Tedom, one of Europe’s largest and most established names in the packaged cogeneration industry.

The leadership of both companies spoke to Decentralized Energy about the mutual advantage of their collectively more comprehensive offering.

Under the deal Tedom will bring its specialized line of cogeneration equipment – with the power to operate on biofuel, a renewable energy source with a rapidly growing market. Tecogen is currently limited to pipeline natural gas and propane and to installations.
Jiris Jansa and Josef Jeleckik of Tedom with Ben Locke and David Garrison of Tecogen
The agreement is likely to entail Tecogen embarking on selling products in the EU, after its initial US focus. The bottom line is a collective partnership that presents a much stronger entity.

Benjamin Locke, Co-Chief Executive Officer at Tecogen told Decentralized Energy that the JV resolves a pain point the company has persistently faced – its ability to cater for smaller and larger offerings than it has had at its disposal.

“Tecogen has been a very long-standing CHP manufacturer for many decades with a history of innovation coming up with new and better products while Tedom has been doing the same thing in Europe. They are celebrating their 25th year in business at the moment and are our counterparts in Europe in terms of product innovation.”

“Tecogen’s product portfolio has been limited to 60 or 75 or 100 Kw units – we had some large installations that had five or six of our units, which enabled scale up to .5 mw or 1 MW, but we had nothing smaller than 60 Kw and nothing bigger than the 1 MW range even though our salespeople would come across those opportunities all the time.”

Locke says the company is sensing a growing appreciation of larger scale multi-megawatt products as well as the lowest wattage possibilities, the main motivation behind this link-up.

“We always contemplated having a larger product offering. With the advent of many regulations in terms of waste collection and biogas production, biogas driven large CHP systems are in demand- so  this agreement is really looking at Tedom’s ability to have large multi-megawatt systems operating off biogas, such as digester facilities and municipal solid waste facilities. Those units will be sold by the JV sales team and will be serviced by Tecogen’s nince services centres throughout the US.”

From the Tedom side, Josef Jeleck, General Director of the company, says they were always aware of the potential offered by such a venture, so long as the right partner could be found.

“Our success through the years is based on our strong relationship with partners and we know there is huge potential in the US for our systems- we finally found a really good partner for this market in Tecogen. It’s the perfect fit in terms of their experience, local presence and its the ideal way to approach this market.”

Geographically it changes the scene for both parties with Tedom products, be that large megawatt biogas systems as well as small systems for residential buildings, already available for sale in the US.

The parties are also contemplating joint technology development, making particular use of Tedom’s rich experience in engine technology. This also includes emissions technology, an important consideration as policymakers drive a decarbonisation agenda.

“Emissions technology is very important in the US,” says Locke. “Tecogen has developed second stage catalysts system getting criteria emissions such as NOx and CO2 to very low levels that meet and exceed the stringent limits set in California. As other states and countries start to adopt these very stringent limits for CO2 and NOx, stationary systems like CHP are going to have to meet very strict emissions standards. The agreement contemplated is using our emissions tech with the Tedom engines which also assists them in compliance.”

“We are also looking at building some of our chillers and heat pumps in Europe at Tedom’s facility to be sold by Tedom in that market.”

What’s going on in the policy domain has influenced an acceleration of the partnership.

In the US there is a national goal, by Presidential Order, to reach 40 GW of CHP by 2020. To enable that objective the Department of Energy announced their accelerator programme for CHP last week, and policy drivers in the EU are also increasingly encouraging towards the sector.

Bob Panora, Chief Operations Officer at Tecogen says CHP can play a prominent part in delivering energy efficiency targets across the world, complementing other technologies in the same space.

“I think CHP dovetails perfectly with any efficiency you do with a building. Insulation is great but you can only take that so far. The only way you can impact is with a CHP or PV system and none of those technologies are mutually exclusive- – they all work together fine.”

The partnership will facilitate more effectiveness for the engineers on the ground, and allows the shackles of being confined to medium range products to be taken off, potential-wise.

“Our sales people and the energy service company partners we work with and their engineers are exposed to projects large and small. Now we can be a one stop shop for everything form a 35Kw residential building to 3-4 MW for a very large digester plant,” says Locke. “Oftentimes it’s the same energy service company engineers and same people involved in these projects – so now it’s a much more efficient way for us to get this equipment installed and in the field.”

Locke is bullish about prospects now that the agreement has been tied up. That outlook is being fed by the avalanche of policy being developed in the energy efficiency area, something that is seeing no sign of let-up.

“Certainly the addressable market for the venture has quadrupled what the market was for our products beforehand. You only have to look at new regulations in place for waste management.”

“As an example New York recently implemented their zero waste initiative – that’s going to start getting traction whereby all the food waste from restaurants and grocery stores can no longer be put out in garbage. It all has to be collected and centralized to a digester facility made in to biogas an then there is a CHP system to consume the biogas and price that electricity and the grid is often incentivised or required to buy that power back from the facility.”

“The market potential for us is only going to increase.”