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Energy company Ceres Power thinks it has got the answer to micro-combined heat and power (CHP). By 2012 it is promising to have two CHP systems on the market that have the potential to halve the carbon emissions from an average dwelling. What is more, they will be affordable and have the same maintenance regime as a conventional domestic boiler. But what is most novel is that they will use fuel cell technology. It sounds almost too good to be true. So how are they proposing to make it happen?

Fuel cells that run on hydrogen have a unique appeal. They generate heat and electricity through a chemical reaction whose only by-product is water. They are quiet and up to 80% efficient. And, depending on where the hydrogen comes from, they are a promising way to cut carbon emissions.

But it is not quite that simple. The first trial of a domestic-sized fuel cell by the Black Country Housing Group in the West Midlands highlighted some of the drawbacks. One big one is the ferocious cost 鈥� the purchase and installation ran into hundreds of thousands of pounds. The firm also had to convince the Health and Safety Executive and the local fire brigade that installing a hydrogen storage tank would be safe. According to Richard Baines, director of sustainable development at the firm, the main issue is reliability. 鈥淭hese are complex systems and we鈥檙e still at the early stages of development and finding out how they perform,鈥� he says. 鈥淏ut I wouldn鈥檛 want this to scare people off 鈥� the potential is huge.鈥�

It didn鈥檛 put Black Country off 鈥� it has just started trying out a second fuel cell in the same property. This time it is a proton exchange membrane (PEM) fuel cell made by German company Baxi Innotech, which runs off mains gas rather than pure hydrogen. The refrigerator-sized unit produces about 1.5kW of electricity and 3kW of heat, and costs about 拢150,000. Baines says the cost reflects the early stages of development. 鈥淚鈥檇 expect the price to drop an order of magnitude when it reaches production,鈥� he says, although that is a few years off. There are also technical problems that have not been fully overcome: for example, one issues with the PEM unit is that it is vulnerable to carbon 鈥減oisoning鈥� from impurities in the fuel source.

So how is Ceres Power going to deliver a unit in just two years鈥� time? The firm was born out of fuel cell research carried out by Imperial College in the nineties and has spent the past eight years working on perfecting the technology for small domestic applications. Last September it reported that it had successfully built and tested a 1kW fuel cell module as part of its programme with British Gas to develop a residential CHP unit by 2011. In March it announced that it had signed an exclusive agreement with Calor Gas to develop and supply a liquified petroleum gas (LPG) version aimed at the rural, off-mains market by 2012.

They describe the unit they鈥檝e developed as a 鈥渇uel cell boiler鈥�. It鈥檚 a form of CHP where the fuel cell provides electricity and heat but the unit incorporates a small conventional boiler to provide additional heating when it is needed.

It uses what Bob Flint, commercial director at Ceres Power, describes as 鈥渋ntermediate solid oxide fuel cell technology鈥�. One of the advantages of this is that it does not need an expensive catalyst and it can run on a wide variety of fuels, including natural gas and LPG. The Ceres unit also runs at lower temperatures 鈥� about 600掳C 鈥� compared with a typical solid oxide fuel cell, which enables it to be made out of more conventional and cheaper materials such as stainless steel. 鈥淚t鈥檚 also a lighter and smaller system,鈥� adds Flint.

Unlike CHP systems that use an internal combustion engine, the fuel cell has a power to heat ratio of 1:1 and so does not generate excessive amounts of heat compared with electricity.

Ceres鈥� aim is to create a unit that can generate up to 1kW of electricity, which it says will be enough to provide the base electrical load in the home for running appliances such as the fridge, while the heat can be used all year round for hot water. When more heat energy is required, that can be provided by turning on the gas-fired condensing boiler.

By generating the electricity on site, the waste heat can be put to use and the losses that normally occur during transmission are avoided. As a result, Ceres claims it can cut the carbon emissions of an average home by a massive 50%.

Neil Cutland, executive director of Inbuilt, says he is excited about the technology but is cautious. 鈥淵ou need to look closely at the power-to-heat ratio because if it is being run off mains gas, you have to ask yourself the question: would it be more efficient to burn the gas in a boiler? Is it worth that cost and complexity?鈥�

As might be expected, Ceres is optimistic about the potential of fuel cells and believes that by partnering with companies that already have direct channels to millions of customers, it will be able to penetrate the traditional boiler market.

According to a recent survey by Haddock Research & Branding, about a sixth of owner-occupiers connected to mains gas say they find the idea appealing and would be likely to install one, although cost was an issue.

Calor is predicting that its LPG fuel cell boiler will have a system and installation cost of between 拢5,500 and 拢6,500, which is about 拢2,000 more than a conventional condensing boiler.

Up until now commercially viable fuel cells have proved elusive. In two years鈥� time we鈥檒l know if that鈥檚 changed.