For homes in the northern half of the US and Canada à‚— where climates demand significant space heating à‚— micro-combined heat and power (micro-CHP) is becoming an increasingly viable alternative energy option along the path towards greater energy independence.
By taking a comprehensive approach to residential energy management, micro-CHP technology simultaneously addresses four leading energy issues in these regions: energy use for space and water heating, energy use for electric power production, peak capacity demand on the electric grid, and energy security.
No other alternative energy technology, including on-site harvesting of solar and wind energy, offers the cost-effectiveness, practical deployment opportunities and potential for energy conservation of micro-CHP. Designed for both new construction and retrofit applications, micro-CHP technologies can be placed into the majority of US homes today.
In fact, micro-CHP is applicable to at least 80% of the current stock of US single family homes and nearly all new homes, and can be installed without the physical and aesthetic limitations that are sometimes associated with solar panels or wind turbines. Because micro-CHP does not have these limitations, it has the potential to make the maximum short-term and transitional impact needed to eventually make renewable technologies universal.
How it works
With a focus on maximizing fuel energy, micro-CHP technology combines an Energy Star-rated advanced warm-air furnace or boiler with a gas-fired Honda generator in its dual approach of generating electricity while heating a home. Natural gas or propane is first used in specially developed, ultra-quiet (47 dBA) small engines to produce 1.2 kW of electrical power. The waste heat energy produced in this electrical power generation process is used to heat the home. In other words, two energy outputs are achieved from a single energy input, resulting in the production of both heat and electricity.
This dual approach doubles the value of fuel used and dramatically cuts the amount of primary energy needed to heat and power the home. During the cogeneration process, electrical power is generated at about 85% efficiency, which is approximately three times higher than the electricity grid. The ratio of heat to electric energy production with micro-CHP is approximately five to one, which is ideal for the needs of an average home.
Figure 1. The freewatt device comprises a generator, boiler and indirect water heater, with controls
Working within the highly developed natural gas and propane delivery infrastructures, micro-CHP also offers a solution for total primary energy conservation and reduced demand on the electrical grid, while offering homeowners security from electric power outages.
Micro-CHP provides grid support and reliability to electric power systems that are already approaching capacity, and can also help electric utilities meet mandates à‚— which require them to meet target reductions in emissions by certain dates.
Modern micro-CHP systems meet all Underwriters Laboratories (UL) requirements for direct coupling to the electric grid as a power generator and have a very simple electrical installation. It has been well established that micro-CHP systems can meet the heating needs of homes with as little as 1 kW electric output, while generating one half of a typical homeà¢€â„¢s annual electrical needs.
By providing a low level of continuous heat, supplemented as needed by an auxiliary burner, micro-CHP systems now achieve about 4000 hours of continuous power generation annually in typical homes. Advanced models now also feature a black-start and grid de-coupled mode of electrical generation that can maintain home comfort and security during extended grid power outages à‚— something that cannot be provided by any other alternative energy system.
Maintenance and internet connectivity
Advanced micro-CHP systems, like Freewatt, can be connected to the internet using a homeownerà¢€â„¢s in-home network, which also provides many advantages not available with other home heating systems. For example, each Freewatt system can have its own web page, whereby homeowners can monitor its power generation and energy savings, adjust settings, and even set their programmable thermostat. This feature also enables them to monitor temperatures inside and outside their homes while they are away.
Homeowners who have a service contract can allow their dealer to be alerted if any issues arise with their micro-CHP system. For instance, if a bird decided to make a nest in the exhaust flue pipe and the vent became blocked, the dealer would receive a message. With an ordinary heating system, the homeowner may not become aware of the situation until it became a major issue. The web-connected system also sends an alert when a routine service is needed.
Micro-CHP systems are designed to be relatively low maintenance. Service requirements on the heating side are similar to other residential furnace or boiler systems. On the engine-generator side, a routine service is required every 6000 operating hours, which is about every one and a half to two years. Similar to an automotive tune up, the routine service includes oil and filter change, air filter cleaning, breather/separator change, spark plug replacement and routine adjustment. When a homeowner purchases a Freewatt, three years of routine maintenance are typically included by the dealer in with the sale and installation of each system.
Current consumer attitudes
According to recent consumer research conducted by ECR (manufacturers of the Freewatt micro-CHP system, Utica, New York state), 87% of US respondents are not currently using any alternative energy sources. Most cited installation costs, maintenance, availability, unreliability, size and unsightliness as the biggest drawbacks.
However, approximately 92% expressed an interest in generating electricity in their home and sending excess generation back to the electric grid. Lower fuel consumption and a reduction in utility bills were among the top reasons in their consideration for micro-CHP. More than 70% of the homeowners surveyed said they are willing to pay more for energy-saving devices if it is the most cost-effective option for them in the long term.
In terms of priority, consumers believe that finding ways and means of using green energy resources should be a high priority, for both their electric utilities and the government, and a medium priority for their households. The majority believe that the US needs to become less energy dependent on foreign oil by finding better uses for its domestic resources, and that it is just as much the responsibility of utilities to be working toward ways to improve energy resources as it is individuals.
The CHP energy concept and practice à‚— which is both old and well-established in the commercial and industrial sectors, that is the simultaneous on-site generation and use of both heat and electric power, and the fundamental overall energy efficiency of such cogeneration à‚— has been only previously possible/available with large-scale energy technologies used on college campuses, hospitals, etc. However, with changing consumer attitudes and recent technological advances, the adoption of micro-CHP as the next step in home weatherization and energy conservation is on the horizon.
In just the last few years, the practical miniaturization of cogeneration systems to a scale suitable for individual homes has become possible à‚— as demonstrated by the approximate 100,000 micro-CHP systems currently deployed around the world, outside of North America.
Unlike other alternative energy strategies, the practical application of micro-CHP running on natural gas and propane does not require any form of either electrical or thermal energy storage, making the technology much easier for a homeowner to adopt into their living space. Micro-CHP appliances are now quiet, reliable and affordable. Technology leaders, like ECR and Honda, have designed the advanced power electronics à‚— the ultra-clean and high-endurance engine technology and the modern communication practices needed to produce a home energy solution that was unthinkable just a few years ago.
Additionally, regulatory agencies in the US and Canada have been playing a large part in opening the door for micro-CHP, by providing simple interconnection and tariffs for eco-conscious residential electric power generation. For example, the United States Environmental Protection Agency is encouraging the acceptance and adoption of micro-CHP by designating the technology as its first à¢€ËœClimate Choiceà¢€â„¢ technology for the home. Climate Choice is a new partnership programme that recognizes emerging technologies with the potential to substantially reduce greenhouse gas emissions once they are more widely adopted.
Consistent with the environment-focused objectives of the Obama administration and the American Recovery and Reinvestment Act, a proposed federal personal tax credit measure would also help accelerate the development, acceptance and deployment of micro-CHP. In fact, more than 50% of consumers say receiving a personal tax credit is important to them when making energy-saving home improvements.
To continue the push for widespread adoption of micro-CHP, some states have also implemented net metering programmes that include this technology. Recognizing the community energy and environmental benefits of micro-CHP, about a dozen states in the US have already extended the operational and economic benefits of net metering of electricity use and production to homeowners with micro-CHP systems, and hopefully more will soon follow their lead.
Actual deployment of available micro-CHP technologies and products to the tens of millions of individual homes in the US and Canada is now the real challenge. The benefits and rationale for choosing micro-CHP for the next generation of energy technology for North American homes are just beginning to be recognized by the larger public. Like all other home technologies that have swept through the country in recent decades, including flatscreen televisions, personal computers and central air-conditioning, achieving the levels of use that maximize production and deployment efficiencies is the present challenge for micro-CHP.
Today, micro-CHP is a very cost-competitive alternative energy strategy. In an average-sized home in the northern US, micro-CHP can generate half the homeà¢€â„¢s annual electrical needs, effectively cutting the homeownerà¢€â„¢s electricity bill in half. As its use in North American homes grows, micro-CHP will compete economically with the traditional and more energy-intensive approach of simply using fuel for heating and relying entirely on the electric utility to burn even more fuel to remotely generate and deliver electric power.
Residential-sized micro-CHP systems are designed for simple installation by existing home heating contractors, helping to ease the deployment process. Business models and enterprises to make this happen are just beginning to take shape now that practical micro-CHP technology is available.
ECR, for example, now has a team of regional sales managers to serve the US and Canada. These sales managers work with distributors and their sales forces, including Freewatt specialists, who are dedicated employees at the distributorà¢€â„¢s location that solely support Freewatt sales, marketing and management. Each distributor works with a set of dealers in their area, who serve both new home and retrofit markets, consisting of both builders and homeowners.
The energy and environmental benefits of combined heat and power, whether on a micro or macro scale, are undeniable. Unyielding laws of thermodynamics dictate the energy advantages of the simultaneous production of electric power and heat when both can be usefully applied, as they can be with micro-CHP applied to residential homes in the northern US and Canada. As large numbers of micro-CHP systems are deployed in a community, they also can be remotely dispatched as needed to help meet peak electrical demands on the grid, becoming an important part of smart grid and demand response programmes.
Some have already recognized that micro-CHP and solar energy will have a future working together in homes as part of a total alternative energy solution, with micro-CHP providing the most efficient use of energy during the colder seasons and solar taking the lead in the summer.
Compared to a conventional heating system and grid-supplied power, micro-CHP typically reduces carbon dioxide emissions by 60% or more. Based on the most recent research, using micro-CHP in a home will cut 4000à‚—6000 lb (1800à‚—2700 kg) of carbon emissions annually.
The technology and practicality of micro-CHP is also well established. All that remains is the facilitation of its deployment in quantities sufficient enough that they drive the economics for homeowners to a level that makes it the only rational choice.
With more than 50 million homes across North America as good candidates for micro-CHP and more than 90% of consumers interested in generating electricity in their home and sending excess back to the electric grid, there is no shortage of opportunities.
Michael Paparone is the president and CEO of ECR International, manufacturer of the Freewatt micro-CHP system, Utica, New York, US.
Micro-CHP in Europe
The development of micro-CHP in Europe is at a critical stage, writes Vikas Ravindran, research analyst for the Energy and Power Systems Group at Frost & Sullivan
It is just a matter of time until search engines around the world add à¢€Ëœrecessionà¢€â„¢ and à¢€Ëœclosureà¢€â„¢ to their list of the most searched keywords. Since September 2008, these words have made headlines and experts across the industry feel that the worst is yet to come. Although there has not been a direct impact on the energy industry so far, manufacturers and utilities are taking a step back and re-contemplating any further investments. This trend is also visible in the renewable and alternative energy markets with a decrease in research and development expenditure, and production being cut down by half.
Figure 2. The UKà¢€â„¢s Baxi Ecogen domestic CHP boiler has cutting edge technology, so while it heats the home it also generates electricity
Micro-combined heat and power (micro-CHP) technology has always been considered a à¢€Ëœkillerà¢€â„¢ technology, especially when it is viewed as an ideal replacement for traditional condensing boilers. But the global sales of micro-CHP units, though on a rise, are still at a nascent stage of the power generation landscape and the growth rate has been declining year on year. Installed capacity in 2004 was close to 24 MW, which increased to 31 MW in 2005, a growth of 29%. However, installed capacity only reached 38 MW in 2006, a growth of around 22%, 7% less than in 2005.
Currently, Japan (with three-quarters of the worldwide sales) is the leader, with Hondaà¢€â„¢s ECOWILL and Yanmarà¢€â„¢s Genelight units accounting for the majority of the sales. This is mainly due to a strong distribution strategy, wherein gas companies offer the product to houseowners and developers. The German market contributes to just under one-fifth of the global sales, with SenerTec and Power Plus Technologies being the primary companies operating in this country.
Focus on Europe
The prime movers in the micro-CHP market are internal combustion engines, external combustion engines and fuel cell-based systems.
Internal combustion engines account for the bulk of sales and the major reason for this growth is technological. The internal combustion engine-based micro-CHP units have a long history of use, and long life times have also been demonstrated. The external combustion engine-based micro-CHP units are also showing some shades of development, as manufacturers are dealing with the challenges in making a transition from trials to mass manufacturing.
The fuel cell-based micro-CHP system has not seen the impetus that the industry pundits had predicted. Slow growth of the stationary fuel cells market in the European Union (EU) can be cited as a prime reason. The systems are still falling behind in parameters such as longevity and efficiency, against the traditional condensing boilers. Ideally, the fuel cell-based units are expected to see commercial growth post 2015.
Although the European micro-CHP market holds immense potential for growth, certain developments in the past two years suggest otherwise. Microgen, a leading BG Group-backed micro-CHP manufacturer, closed down in 2007. The board could not see the product coming into market and felt that the technology was another five years and à¢â€š¬100 million away, and thus the financer decided it was not worthwhile. This exemplifies the fact that even with a sound technology, continuous financial backing is of great importance.
In the case of SOLO Stirling GmbH, the company was unable to meet its launch deadline. The company had budgeted à¢â€š¬10 million and two years to market the Stirling micro-CHP units. Though it spent the money, it still had two years to manufacture a market-ready product. As is the case with every new technology, awareness at a customer level is quite low and people who could possibly steer consumers towards micro-CHP are either not prepared or not trained for the micro-CHP revolution.
The industry has started looking at Whisper Tech units with renewed interest. In September 2008, the company partnered with the Spanish-based Mondragon Cooperative, and this joint venture, known as Efficient Home Energy, has now become an exclusive manufacturer and distributor of Whispergen micro-CHP units. This move is expected to revive the market for Whisper Tech units, which are aimed at the residential market with a power output of around 1 kW.
The recent economic downturn has sent global markets in a downward spiral and it is logical to assume that this would have an effect on the energy industry as well. However, the micro-CHP market hasnà¢€â„¢t seen a major impact so far and most of the companies feel pretty secure and well-insulated from the recession.
British Prime Minster Gordon Brown recently stated that the global economic meltdown would not affect the governmentà¢€â„¢s drive to reduce the countryà¢€â„¢s carbon emissions. In fact, due to the economic slowdown, the EU can afford to set tighter limits on emissions, since slower economic activity will lower the emission permit prices.
The à¢€Ëœgameà¢€â„¢ at hand
Paper à‚— in order to ensure there is no obstruction to the development of micro-CHP in most European countries after 2010, a clear regulatory framework for the system, in terms of efficiency and durability and the connection to the local grid, must be put in place.
Scissors à‚— a high price of the micro-CHP system leads to lower demand, thereby forcing manufacturers to curtail production. However, a fall in prices cannot be attained without economies of scale, thus creating a à¢€Ëœcatch 22à¢€â„¢ situation. The issue of additional capital costs can be solved by introducing financial incentives to stimulate market growth. Another way to cut costs is by ensuring an optimal supply chain. Moreover, the preferred route to market via service providers, which comprise of a consortium of manufacturers, installers and energy supply companies, might need to be revisited as it appears that few efficient service providers exist at the moment.
Rock à‚— finally, it is with much anticipation that the energy industry awaits US President Obamaà¢€â„¢s developing views on energy policy. Though this might not have a major impact on the European economy immediately, in this age of globalization it would always serve better to take some pointers from the energy industries and economies around the world.
Micro-cogeneration is a nascent industry. Companies need a minimum five year incubation period to come out with a final product. Manufacturers such as Whisper Tech and Baxi-Senertec having been in the industry for a while, understand the market nuances, and are expected to play pivotal roles in shaping the future of micro-CHP industry.
With the economic downturn which is expected to last till 2010, most of the leading players and new entrants alike are looking to revamp their corporate strategies to capitalize on this slump. To achieve this goal they can start of by answering these three questions:
1. Will they be able to reach a cost target to get a level of mass market, without the support from their government?
2. What is the risk exposure of this new technology five years from commercialization? Will there be a guarantee for the industry?
3. In the current economic climate will the government continue supporting this technology?
Both the industry and governments must work in tandem. At present governments have a huge role to play; if they cut their support while the market is still fragile, it might just kill the market.