Transformational Energy Futures

Efficient and clean energy for the world

Helen Millicer, I&PR Manager

Who is CFCL?

• Based in Noble Park (Melbourne), Australia

• Established 1992

• IPO July 2004

• 9000m2 of R&D and prototyping facilities

• Pilot SOFC production plant

• 100 employees

• European subsidiary established September 2004

Summary of Presentation

• Trends in world energy market

• New challenges of efficiency and emissions

• Disruptive technologies:

1. Micro-CHP and distributed generation

2. New energy for the future - fuel cell generators

World Energy Market Trends

Challenges:

Increasing population and industry activity

Pressures and mandates on efficiency, greenhouse and particulate emissions

Increasing price of fuels and electricity

Falling supplies of conventional fuels

Ageing energy infrastructure

Solutions:

More efficient and cleaner systems

New energy sources

World Energy Trends – Government Actions

UK’s Prime Minister plans to raise energy performance target in 2005 to 50% for new buildings, and 60% cut in carbon emissions by 2050

Australia NSW adopts BASIX 5 Star program – 40% less greenhouse emissions for all new residential development by mid-2006

New York State to have 25% electricity supplied by renewables, including biogas fuel cells, by 2013

German Government provides subsidies for fuel cell technologies powered by biomass

German Government passes Law providing subsidy incentive of 5 € cents for energy from small combined heat and power systems

Regional Energy Costs

0

5

10

15

20

Australia USA Germany UK

Retail Electric ityUS$/MWh

Wholesale GasUS$/Gj

Comparing stationary power systems

Centralised power:

• Coal – 25-40% efficiency, high emissions, constant power

• Nuclear – 40% efficiency, highly toxic long life waste, constant power

• Gas – 30-50% efficiency, moderate CO2 emissions, generally peak demand

Localised (decentralised) power:

• Solar – no emissions, intermittent power

• Wind – no emissions, intermittent power

• CFCL’s micro-CHP unit – 85% efficiency, variety of fuels, low emissions, continuous power

CFCL’s sweet spot

CFCL’s market and product alignment

Market drivers:

• Price for electricity and fuel – Europe very high

• Fuel scarcity – Europe (importer of fuels)

• Efficiency imperative – regulations and Kyoto on users and utilities - Europe

• Natural gas penetration – Europe extensive

• Industry framework and interest – horizontal integration and government incentives - Europe

Product solution: 1kW micro-CHP domestic generator for Europe

CFCL path to market1995 Technical review, 2 yr plan to progress from small to bigger cell

stack technology funded by existing investors, reach 5kW

1997 Technical review, further investment, Fed Govt R&D Start Grant progress to 25kW stack, aiming at < 200kW generator, problems with thermal cycling of large metal stack

1999 CFC becomes Co Ltd, Woodside and Energex grow to be major investors, move to all ceramic smaller stack

2003 CFCL recognises market shift to micro-CHP and adjusts business model to being provider of 1kW stacks to domestic appliance manufacturers

2004 CFCL lists on ASX, IPO and cap raising $25M

Disruptive Technology

“Micro-CHP has a predicted capacity of similar order of magnitude to the existing nuclear generating capacity in the emerging liberalised energy markets in Europe. It has the potential to substantially disrupt the established electricity supply industry both economically and technologically.”

EA Technology Ltd, UK, 2003.

Micro-CHP + fuel cell generator

CFCL 1kW micro-CHP

Existing micro-CHP Products

Sales: 13,000 in 2004

Market value: €112 million

Six products: 4 x 5kW, 2 x 1kW

Markets: Japan, Germany, catching up UK

Best Opportunities: countries with widespread natural gas, high retail electricity prices, long heating season*

* Fuel cells may reach 1:1 power to heat ratio, existing micro-CHP reach 1:5 ratio

Efficiencies in Electricity Generation

Solid oxide fuel cells are recognised as potentially the most efficient electricity systems in the world

Advanced Steam Power Plant

Ele

ctri

cal E

ffic

ien

cy %

Power Plant Capacity (MW) Source: Siemens AG

Solid Oxide Fuel Cells combined cycle plant

Solid Oxide Fuel Cell

Phosphoric Acid Fuel CellSteam and Gas turbine combined

cycle plant

Gas Generator

Petrol GeneratorDiesel Generator

0.1 1 10 100 1000

70

60

50

40

30

10

20

0

Comparing electrical efficiency

0

20

40

60

80

100

SOFCells PEM Cells Coal Gas

Efficiency

Combined

Energy Waste: CFCL’s CHP vs conventional power plant and hot water unit

Save 44% energy using CFCL’s CHP unit instead of a conventional

electricity power plant and domestic water heater

Wasted heat 2.15 kW, 66%

Outlet

Transmission losses 0.1kW, 10%

Conventional power station

Electrical energy for use on site 1 kW, 30.8%

Electrical energy 1.1 kW, 33.8%

Plus

Energy used to power CHP system .5kW, 20%

Actual heat recovered used for hot water 1kW, 40%

Actual electricity generated for use on site 1kW, 40%

CFCL’s CHP unit – heat and power delivered to site

Transmission losses 0 kW, 0%

Source: ABARE 2004

Domestic gas hot water unit

Heat energy 1 kW, 82%

Wasted heat energy .2 kW, 18%

Emissions: CFCL’s CHP vs Conventional centralised power plant and hot water unit

Emissions (per kW energy output)

Option 1 VS Option 2

CFCL’s CHP combined home electricity generator and hot water unit alone

saves 54% CO2 emissions

CO2

534 g

NOx 0 g (Neg)

SOx 0 g

CO2

900 g

Conventional centralised power plant

NOx 4 g

SOx 10 g

Conventional home gas hot water unit

CO2 261 g

NOx .5 g

SOx 0 gPlus Solid

Wastes Ash/Gypsum 50 g

Chloride/sulphate 20 g

Source:

ABARE 2004

Australian Government

European Market Opportunities for CFCL

61

00

65

00

50

00

0.4

10

0

20

00

1

10

0

50

0

0 1000 2000 3000 4000 5000 6000 7000 8000

2004

2008

2012

Gas Units Fuel Cells Others

Existing and growing EU market for new gas boilers (000 units sold p/a)CFCL market calculations

Benefits of using fuel cell CHP units

•Have own reliable constant energy system, end risk of blackouts

•Potentially reduce fuel bill and energy consumption

•Sell surplus electricity to grid

•Replace two units with one – gas powered generator and hot water unit

•Utilities defer cost of power station and networks

•Utilities and governments meet emission requirements of Kyoto Protocol and legislation

Energy Business Models with micro-CHP

Residents in Tokyo, Japan, have the opportunity to provide power and hot water for their homes using a fuel cell cogeneration system developed by Tokyo Gas, Ebara Ballard Corp and Matsushita Electric Industrial Co Ltd.

Cost: about US$9,550 (1 million yen)Power: 1-kilowatt fuel cell systemPeriod: 10 yearsDeal: customers also earn a 3 % discount on their gas bills for 3 yrs and bills cappedat about $90 per month (9,500 yen). 

How CFCL’s micro-CHP operates

1 – Fuel cell generator stack

2 – Hot water storage tank

3 – Heat exchanger & burner

4 – Fuel / air pre-treatment

5 – Waste heat recovery

6 – Mains power converter & controls

12

3456

12

3456

The building blocks - CFCL’s fuel cell

CFCL’s CHP Competitive Advantage

Not limited to hydrogen, own internal gas reformer

Able to use a number of gas fuelsnatural gas

methane

LPG *

higher hydrocarbons : light napthia, low sulfur diesel

Able to use renewable fuelsbiomethane (dairy, sewage) *

ethanol (from sugar, starch, cellulose) *

biodiesel *

coal seam methane *

hydrogen * capacity identified

Fuel cell industry growth

Source: Fuel Cell Today, Dec 2004

CFCL operates in the SOFC field

Automotive fuel cells

Size range: 20-120kW

Fuel: Hydrogen (compressed, liquid): refueling infrastructure very limited to date (about 70 stations globally)

Demo cars - Toyota, GM, Honda

Commercial series: 2010 - 2015

Portable/miniature Fuel Cells

Distributed Generation

PAFC 200 kW

PEMFC 200 kW

MCFC 1 MW

SOFC 100 kW SOFC CC 250 kW

MCFC 300 kW

Conclusion

The paradigm shift and deep cuts in energy and emissions via micro-CHP and fuel cells:

1. Distributed energy – no transmission losses

2. Reduced capital cost

3. Efficient use of fuel ~ nearly 50% improvement

4. Cleaner air with nearly zero particles

5. Reduced CO2 greenhouse gas emissions ~ > 50%

Thank you,

Helen Millicer