The maker of a domestic power unit is hoping government acceptance will help it achieve economies of scale, writes Christopher Jay.
ACSIRO-originated, Melbourne-based producer of micro fuel cell power generation units, which generate electricity from natural gas, will be a big winner from a landmark decision by the Victorian government to extend small-scale electricity feed-in tariffs beyond the traditional solar and wind turbine power techniques.
Victorian clients of Ceramic Fuel Cells Ltd, which sells dishwasher-sized 1.5-kilowatt units under the trade name BlueGen, will from January 1 be eligible for a net feed-in tariff of 8Â¢ per kilowatt hour for surplus power delivered to the electricity grid.
Like other state governments, the Victorian administration has cut back heavily on the lavish 60Â¢ a kilowatt hour feed-in tariffs offered to home owners in the first flush of enthusiasm for solar panels, or small wind turbine generation units.
But for BlueGen, a key benefit of the Victorian decision is that from now on it will be on an equal footing with new micro-units using other power generation technologies, in homes or neighbourhood shops and community buildings.
“It removes one of the barriers in the Victorian market,” the group general manager and company secretary of Ceramic Fuel Cells, Andrew Neilson, says. “BlueGen consumers can now get something back from the power they send to the grid.”
In the immediate future, BlueGen will continue to put its primary emphasis on sales into Germany and the UK, where the feed-in tariff arrangements are far more generous.
One reason for the focus on feed-in tariffs is that the BlueGen units, using fuel cell technology with natural gas, are expensive – about $30,000 per unit. Only the very high efficiency of the units (more than three times that of grid power) keeps the payback period below the 10-year mark.
Ceramic Fuel Cells is looking for greatly expanded sales, to facilitate mass production economies of scale, plus outsourcing of some components, some technical tweaking and the benefits from the production learning curve (as already seen on solar panels) to deliver deep price reductions over the next two to three years.
The big significance of the Victorian move is that it should tip the scales BlueGen’s way in a backstage policy tug-of-war within the clean technologies community.
One contending group is focused on strictly renewable energy sources (solar, wind, waves, tidal power, geothermal, biogas). This would rule out BlueGen, which uses non-renewable natural gas as its feedstock. Another group concentrates on making cuts in emissions of CO2 equivalent for a given quantity of energy generated. Here is where BlueGen shines.
A BlueGen 1.5-kilowatt dishwasher-sized module running steadily (and reliably) on readily available natural gas from the existing reticulation network (and thus requiring no additional new infrastructure) will deliver 60 per cent electrical efficiency. In addition, the resultant heat can be used to produce household hot water, taking overall efficiency to as high as an 85 per cent conversion ratio.
This compares with just 25 per cent conversion efficiency for grid electricity, after combustion at the power station and transmission losses over the poles and wires before it gets to a local electricity meter.
Many power engineers argue that the low-hanging fruit in the clean energy theatre will come from making big cuts in greenhouse gas emissions from existing electricity sources, meaning black and brown coal, gas and diesel fuel. On this approach, using natural gas to feed efficient fuel cell technology would make BlueGen units a natural policy selection.
The final advantage that BlueGen has over solar and wind turbine power is in reducing the constant fluctuations in output in distributed, locally generated power from renewables.
Solar power drops out on rainy days, varies as clouds pass over the sun, and has lower output at early morning and late evening (the peak load times) compared to midday.
When the wind drops out, so do wind turbines. Managing wind and solar fluctuations can be done. The Germans (who else?) have been doing it for years. But there would be obvious advantages in averaging the fluctuations down by adding stable supply units to the mix.
The Germans have seized on the BlueGen units as one counter to unreliability in locally generated power to the extent that BlueGen has moved its main manufacturing and assembly operation to Germany. An array of BlueGen units, providing a reliable flow of electricity day-in, day-out, 24 hours day, provides some much-needed stability and dependability to power supplies from locally distributed generation configurations.
BlueGen units are being trialled in various locations in Australia, usually in conjunction with a string of other alternative energy technologies, including passive practices such as improved insulation, double window glazing and solar hot-water systems. The results have confirmed the high energy savings over extended periods.
Smart cell Victorians who have installed BlueGen gas-fuelled electricity generators will be eligible for a feed-in tariff from January 1. The units are the size of a dishwasher and cost about $30,000 each. They pay for themselves after about 10 years. Demand will bring manufacturing costs down, the maker says.