BAXI HEATING UK

CHP – The Microgeneration Boom?

Ian StaresBusiness Development Director – New Technologies

Baxi Heating UK

Chairman; MicroCHP Forum, CHPA Deputy Chairman; Fuel Cell UK

Chairman; Climate Change Working Group; EIC

CHPA National Conference16th November 2006

BAXI HEATING UK

Political Context for Microgeneration• 2003:

• Energy White Paper– Climate Change, Fuel Poverty,

Competitive Markets, Security of Supply

• 2005: • Building Regulations for HE

boilers• Biomass Task Force Report

• 2006: • Microgeneration Strategy• Low Carbon Building

Programme• Climate Change and

Sustainable Energy Act • Energy Review 2006• Stern Report; October 2006

BAXI HEATING UK

“Polices are required to support the development of a range of low carbon

and high efficiency technologieson an urgent timescale”

“… . policies to support the market for early-stage technologies will be

critical”

BAXI HEATING UK

Energy Savings Trust Report onPotential for

Microgeneration*

•25% of UK electricity supply from micro generation

o MicroCHP will be the single biggest contributor

o MicroCHP not dependent on long term subsidy or market distortion

*November 2005; E-Connect, Element Energy, Cambridge University for EST

BAXI HEATING UK

Primary Energy Input 100%

Power station losses - 50%

Transmission losses - 10%

Available to the home: 45% of the original

energy.

Gas

Primary Energy Input 100%

Available to the home >90% of the original

energy.

Gas

Centralised Power Generation

“Locally Grown” Generation;

“Prime Mover Engine” producing electrical power and the generated heat for space heating and hot water for domestic requirements

BAXI HEATING UK

Potential UK CHP Applications

1kWe 3kWe 5kWe 10kWe‘Micro’ ‘Mini’

Households ?Schools ? ?Guest HousePub/Restaurant ?Offices ? ? ?

TOTAL ~12M ~5M ~90K ~ 80K

BAXI HEATING UK

Principal Benefits for MicroCHP( with mass market penetration)

• Consumer;– Additional costs recovered by savings

• Electricity generation and export potential.• A ~£100 - £125 per annum energy saving.

– Secure small, centralised energy supply in the house• Individual taking part in a National policy

• Whole Economy;– Potential for less demand on national grid – Potential for less demand on power stations– Reduction in CO2 emissions

• ~ 1 tonnes per annum per customer c.f. to the conventional boiler

• ~ 6 million homes by 2020 ~ 5MtC carbon equivalent

BAXI HEATING UK

MicroCHP UK Market Forecast• Heating & Hotwater Industry Council; September 2005

– 2010• Mid range scenario - Realistic• ~120,000 units• Depending on product availability, export reward, government incentives.

– 2020• 5.6M installed base• 6MtC cumulative saving

• BSRIA; September 2006– 2010

• ~ 50,000 units• Depending on key players signing commercial deals

BAXI HEATING UK

Evolution of CHP Prime Mover Options-Overview

• Internal Combustion – ‘Here and Now’ technology– Products on the market

• Baxi – Senertec DACHS, EC Power, ecopower

• External Combustion – “Commercially” available – More products available over the next few years– Stirling engines, Rankine Cycle engines

• Baxi, Whispergen, Energetix

• Fuel Cell – “Prototypes” on the market– Commercially available 2012 – 2015– Proton Exchange Membrane (PEM), Solid Oxide (SOFC)

• Baxi, CFCL, CERES Power

BAXI HEATING UK

Internal Combustion

ecopower4.7kWe;12.7kWt

EC Power4-13kWe;17-29kWt

Honda; ECOWILL1kWe; 3 –25 kWt

Baxi SenertecDACHS5.5kWe;12.5 kWt

Baxi acquired Senertec in 2002;Over 15,000 units installed

in Europe;Over 100 units installed in the UK;

Independent reports“materially reduces carbon”

~5 tonnes per year

Launch in Japan in 2003;~27,000 units installed in JapanFew tested in Europe;Launch in 2008 in the UK?

Valliant PowerPlus Technologies

Launched 1999~1,000 units installed

in EuropeActive in the UK in 2007?

EC Power A/S owned byStatoil A/S

EC Power UK owned byEC Power A/S

300-500 units in Europe20 – 30 units in the UK

BAXI HEATING UK

External Combustion

BG Microgen1kWe;15kWt-36kWt

Whispergen1kWe;8kWt

Disenco3kWe;30kWt

ENATEC1kWe;9kWt

Microgen Energy Ltd, BG GroupMicrogen/Baxi deal announced in 2006

Baxi bring to market a Stirling engine based wall mounted microCHP in 2008;

Demonstrated savings and low carbonControlled Prototype trials are underway

Large scales trials planned for 2007

E.ON UK /Powergenlimited commercial launch in 2004

40 units on trial showing good results in target market >20,000 kWh thermal

1.1 -1.5 tonnes carbons savings~£150 savings per year~ 3 – 4 year payback.

Commercial deal announced with Magic Boiler, Netherlands

ENATEC/ Rinnai and Infinia Corp;Floor standing design free piston

Stirling engineTrials in Netherlands showing results

0.7 – 1.0 tonnes CO2Market introduction in Japan; 2007Market introduction in Europe 2008

with a boiler manufacturer, MTS Group

Disenco floated on the Toronto Stock Exchange in 2006;

“Home Power Plant” floor standing designfield trial unit obtained GAD approval

in June 2006;The unit is in the Carbon trust field trials

and a further five units are planned in 2007.Commercial launch in 2008

BAXI HEATING UK

External Combustion

Cogen Microsystems2.5kWe; 11kWt – 22kWtRankine Cycle; 17% electrical efficiency90% plus overall efficiency

Energetix Group;

1kWe Genlec module integrate with a boiler to give a microCHP unit

Energetix founded in 1997Originated in BNFL plc;

AIM flotation of two Companies in Aug 2006

raised £6M;Organic Rankine CycleWall mounted design

Australian CompanyNegotiating with several Italian Manufacturers including a major

boiler manufacturer for the European market in the near future

BAXI HEATING UK

Fuel Cell

Valliant AGPEM; 4.6kWe

ViessmanPEM;2kWe

Baxi /european fuel cellsPEM; 1.5kWe; 18kWt

Baxi acquired efc in 2002€30m on technology development to date;

10 beta units installed in Germany;

1 beta unit installed in a “real”house in the UK

Market ready 2010

Substantial “closed” field trialsIn Germany.

Partnership with ZSW

Over thirty field trials withthe 4.6kWe in Germany

and working with Plug Power.Partnerships with Webasto for

solid oxide fuel cell for lower rated units

BAXI HEATING UK

Fuel Cell

Ceramic Fuel Cells (Europe) LtdSolid Oxide; 1Kwe

CERES Power:Intermediate Solid Oxide;

ASX Listing July 2004Raised $25m

AIM Listing March 2006Raised £37m

A$160m on technology development4 early units on demonstration10 NetGen units sold to EWE20 tonne powder plant to be installed in the UK Jan 2007

Founded in 2001 fromImperial College

Private funding raised £10mAIM listing raised additional £15m in 2004

Market capitalisation ~£140m£2.7m programme with Centrica (with DTI)

Wall mounted CHP designOperation proven on NG,LPG and Hydrogen

UK Focus with expansions plans

BAXI HEATING UK

Government Developments• The Government has implemented a number of measures in support of

microgeneration i.e.– Low Carbon Buildings Programme– Climate Change and Sustainable Energy Act…

• …but very limited support of microCHP even though: – economic case & low carbon credentials has been demonstrated

• MicroCHP has been included in the Low Carbon Building Programme Phase 1

• …… but no accreditation process in place but other technologies have transferred accreditation from Clear Skies & absorbed all the money in Phase 1

Why is MicroCHP not included in Phase 2 ?

BAXI HEATING UK

Summary• “Responsible” manufacturers are investing in microCHP.• Investor community interested and see potential of

microCHP• MicroCHP technologies are near market ready with routes

to market being devised.• MicroCHP is showing results in terms of carbon mitigation

and energy savings in the real world• Government needs to:

– implement appropriate support measures for micro CHP commensurate with potential benefits in accordance with the Stern review.

– Give positive commitment and messages• Important contribution to the future energy mix of the UK.• Helps in achieving national energy and environmental

objectives

BAXI HEATING UK

CHP – The Microgeneration Boom?

Thank you for your attention