I was very interested to come across your critical review.

It sounds as though the Ceres boiler would do well to link-up with Good Energy (or similar) to deal with the problem of matching supply with demand (see http://www.good-energy.co.uk/gyo_home_gen ).

I have just looked at their latest press release regarding their boiler from their website - http://www.cerespower.com/

I have particular interest in this as I am about to do some research in Canada, the UK and the USA about how people think, feel and act towards climate change (I am happy to send you the plan, and briefly discuss it here - http://www.haddock-research.com/node/6 ).

Anyway, I am planning to get some public reaction to this product profile (and can share some top-line results in Sep 08).

PRODUCT TEST FOR MARKET REEARCH

HYDROGEN FUEL-CELL HOME BOILER
Looking much like a typical home boiler, it is compact and designed to be mounted on a wall. It converts natural gas piped into the home into heat and electricity. It can provide all the hot water and central heating required in a typical home as well as much of the electricity. Since the electricity is created at the home, it is created at two or three times the efficiency of the electricity provided by power stations which have to travel through large distribution networks.

- This hydrogen fuel-cell boiler is designed to save more than 25% on the total energy bills compared to the best current gas boilers.

- It does not require any lifestyle changes – the connections and maintenance contracts will be the same as for existing gas boilers.

- Please assume that any excess electricity that you produce can be sold to your electricity provider.

Best,

Peter

Peter Winters, President
Haddock Research and Branding Inc.
Measuring & Mobilizing Public Opinion to Fight Climate Change

Isn’t a more sustainable solution to generate electricity ‘carbon-free’ by installing solar PV on domestic houses? Either like Germany, with a feed-in tariff which does actually stimulate investment by homeowners, or to borrow your theme, provided by the utility companies under a rental / service contract arrangement. Or by ESCO’s. I know there are barriers to universal PV installation like roof orientation and shading, but I prefer solutions that keep the carbon in the ground rather than burning it!

From what I heard, the early versions of micro-CHP using the Stirling Engine were not reliable enough to be deployed on a wide scale at prices competitive with condensing gas boilers.

Carbon Trust published a study in November on the application of Micro-CHP - it reported on field trial showing greatest carbon savings for commercial applications and older, larger homes.

I have not read the report, just the summaries provided in press releases.

“This report updates policy developers, device manufacturers, suppliers
and installers of Micro-CHP technologies on the findings, analysis and
implications of the Micro-CHP Accelerator. It identifies the most
suitable markets for the currently available domestic and commercial
Micro-CHP technologies to maximise their carbon saving potential and it
provides recommendations to stakeholders on how best to accelerate large
scale roll-out of these technologies in these markets.”

Micro-CHP Accelerator - Interim report -Executive summary:

http://www.carbontrust.co.uk/publications/publicationdetail.htm?productid=CTC727

http://www.carbontrust.co.uk/publications/publicationdetail.htm?productid=CTC726

“For small businesses, the trial has demonstrated that Micro-CHP systems
can cut overall site CO2 emissions by 15 to 20 per cent when installed
as the lead boiler in appropriate applications, such as care homes,
community housing schemes and leisure centres. These types of Micro-CHP
installations can also reduce energy bills by thousands of pounds each
year due to the reduced demand for grid electricity.”

“For domestic users, the results show that the current generation of
Micro-CHP systems is best suited to larger homes with three or more
bedrooms, or older houses where it is not currently cost effective to
improve insulation, such as housing with solid brick walls. In such
homes, Micro-CHP can potentially deliver carbon savings of between five
and ten per cent - with typical reductions between 200kg and 800kg of
CO2 each year. However, the currently available systems appear to offer
limited benefits for smaller and newer houses.”

Robert

Thanks for a very interesting and thorough analysis. As you say, Ceres Power seems to have developed some neat technology, but you’ve raised some questions about the ‘value’ it generates.

The key problem you’ve identified is that CHP units cannot cover rapidly fluctuating demand for electricity, especially during peak times. The critical assumption here is that the household buys, installs and controls the CHP unit, a bit like any other appliance. But there is more than one way to deploy CHP units….

The CHP model makes more sense if the unit is thought of as a ‘mini power station’, which just happens to be in a home. The unit is owned and operated by a utility, exporting all electricity to the grid, all the time, with a low amount of heat output. The home imports power from the grid as normal. The utility saves money because CHP generates power more efficiently than other sources (50% electrical efficiency vs say 35% for the grid) - even without an in-feed bonus. The heat is a useful by-product, and adds to total system efficiency of 80-85%, but the main value is power, not heat.

The utility is also better placed to aggregate and ‘monetise’ the other benefits of distributed CHP generation, eg credits for CO2 savings, reduced network / T&D costs, load ‘balancing’ benefits etc.

The householder does not pay for the unit, but signs up for a bundled power and heating contract for say 3-5 years, during which time the utility depreciates the unit (as a tax deductable expense). (New UK laws allow CHP units to be 100% depreciated in the first year but the utility would want a longer term contract to reduce customer churn.)

The utility shares some of its savings with the householder as a form of ‘rent’ - eg free or discounted heat, discouted power, fixed prices or capped increases, ‘green’ bonuses etc - whatever the utility needs to ‘give away’ to entice the household to sign up. (A bit like early mobile phone sales…or set-top boxes. Some European utilities already use this model to sell home heating units.)

This is the strategy being adopted by Ceramic Fuel Cells Ltd (also AIM listed). They are developing fuel cell CHP units with utilities and appliance companies in Germany, France, Holland and UK. Their UK partner is Powergen (E.On UK). They have CE approval for pre-commercial products.

This strategy avoids the problem of trying to match CHP output with household demand. Instead of the household buying a unit and then ‘losing’ electricity to the grid or having the unit idle, the utility ‘gains’ efficient power by running the unit constantly, even when the home does not need power. (CFCL’s heat output is apparently only about 300W heat per 1kW electricity.)

So yes, there are some challenges to deploying CHP units, but they can be overcome by thinking differently about the real ‘value’ of the product and who benefits most.

Regards

Andrew

Thanks for the comment.

1) The Ceres combined fuel cell will work best when it is used in a building with a high need for hot water and a constant electricity demand over 1kw. Few houses will achieve this, but a small hotel might. In these circumstances, the carbon and cash benefits would rise to the maximum figure mention above (about half a tonne of CO2 a year). Unfortunately, the Ceres boiler will not be perfect for these buildings because it will not have the power to meet maximum space heating needs.

This is a general problem - CHP struggles because to make really good sense it needs to be pumping out constant volumes of heat and power but the needs of single buildings generally fluctuate strongly. A community CHP scheme is a much better idea because needs are much more predictable.

2) Very high ‘feed-in’ tariffs would help the economics. Both the Conservatives and LibDems have said that they think the government should offer over 40p a KWh. But for the country, this would be utter madness. It would certainly make sense for every householder in the country to install a Ceres unit and throw away all the excess heat. One would pay back the cost of the boiler within a year. But there wouldnt be any carbon saving at all since the Ceres CHP unit is actually less efficient at generating electrcity than the average UK power station! It is only the fact that the householder can capture the waste heat that makes it sensible to use. As a microgenerator, it is no great shakes.

Best wishes,

Chris Goodall

Chris