Victorian Government review supports feed in tariffs for fuel cells

RNS Number : 7263D

Ceramic Fuel Cells Limited

21 May 2012

Monday 21 May 2012

Ceramic Fuel Cells Limited (AIM / ASX: CFU) - a leading developer of high efficiency and low emission electricity generation products for homes and other buildings - is pleased to announce that the Victorian Competition and Efficiency Commission (VCEC) has recommended that feed in tariffs be extended to include small scale low emissions generators like fuel cells.

The draft report by VCEC, released on Friday 18 May, recommends that Victoria's solar PV feed in tariff be broadened to include all low-emissions and renewable technologies, with a requirement that electricity retailers must offer a wholesale price based feed in tariff for distributed generation of 100 kilowatts or less.

Feed-in tariffs are payments to distributed generators for electricity generated at their premises and fed back into the power grid. VCEC recommends that the feed in tariff be based on the wholesale price for electricity. A report commissioned by VCEC notes that this value varies depending on time, location, and the type of generation technology. The report estimates that currently this value is approximately seven cents per kilowatt hour.

Ceramic Fuel Cells' BlueGen gas to electricity generator would be eligible for this feed in tariff, making Victoria the first State in Australia to provide a feed in tariff for fuel cells. BlueGen customers already receive feed in tariffs in Germany and the United Kingdom.

The VCEC draft report adopts several recommendations made by Ceramic Fuel Cells in our submission and consultation with VCEC, including:

-- Extending the standard feed in tariff regime to include small scale low emissions technologies;

   --      Defining 'small scale' as 100 kilowatts or less; 

-- Defining 'low emission' as 50 percent or lower than the emissions intensity of the national electricity network;

   --      Simplifying the process for connecting small scale generators to the power grid. 

Ceramic Fuel Cells' Managing Director Brendan Dow said:

We welcome the VCEC recommendation to extend feed in tariffs to low emissions generation like our BlueGen product. A fair feed in tariff will deliver value for local BlueGen residential customers. The VCEC report is certainly a step in the right direction, although we believe the proposal to only pay the wholesale rate for power - about seven cents - does not reflect the benefits of increased network efficiency from distributed generation.

We look forward to our ongoing consultation with VCEC and to the Victorian Government adopting the report and delivering a feed in tariff for our locally developed clean energy technology, and in the meantime we will continue to increase sales in offshore markets like Germany and the UK which already provide feed in tariffs.

The Victorian Government commissioned the VCEC report in January 2012. VCEC is seeking submissions on its draft report by Friday 15 June, before making its final report to Government in July 2012.

BlueGen units use ceramic fuel cells to turn natural gas into electricity - as well as heat for hot water - for homes, schools, offices and small commercial buildings. Surplus electricity can be sold back to the grid or used in supplementary applications such as charging electric cars. BlueGen has the highest electrical efficiency of any small scale generating technology in the world, reducing energy bills and cutting carbon emissions.

BlueGen units are operating with customers in Melbourne, Shepparton, Canberra, Sydney, Adelaide and Brisbane, as well as nine other countries worldwide. In Australia BlueGen units are available to commercial and Government customers through our distributors Harvey Norman Commercial and Hills Solar.