Largest German State launches subsidy program for small power and heating products

RNS Number : 7162P

Ceramic Fuel Cells Limited

29 October 2012

Monday 29 October 2012

Ceramic Fuel Cells Limited (AIM / ASX: CFU) a leading developer of generators which use fuel cell technology to convert natural gas into electricity and heat for homes and other buildings, welcomes the launch of a subsidy scheme for micro combined heat and power products (mCHP) by the German State of North-Rhine Westphalia.

Under the new scheme the North-Rhine Westphalia Government will pay a capital subsidy to commercial customers and Energy Service Companies who install highly efficient mCHP products of less than 50 kilowatts, like Ceramic Fuel Cells' BlueGen and integrated mCHP products. Local energy utilities (Stadtwerke) are also eligible for funding under certain conditions.

Different levels of subsidy are available for various categories of mCHP products and related projects, depending on their level of efficiency, Innovation and carbon saving potential.

Based on discussions with the relevant Government bodies, the Company believes that its BlueGen and integrated mCHP products will be classed as highly innovative cogeneration systems, and therefore eligible for a subsidy of 45 percent of the extra cost of the product compared to a conventional reference product. The subsidy is increased by another 10 to 20 percent for small and medium sized businesses.

While the precise subsidy amount will be determined by the relevant Government department, and may vary between customers, the Company believes its products are likely to be eligible for an initial subsidy of approximately 10,000 Euros per unit.

The subsidy program begins immediately and is due to run until the end of 2017. The subsidy is part of a North-Rhine Westphalia Government funding program of up to EUR 250 million to support CHP deployment. The North-Rhine Westphalia subsidy is in addition to the German Federal Government subsidy of 1,650 Euros per BlueGen, plus the Federal Government feed-in tariff for mCHP products.

North-Rhine Westphalia is the most populous State in Germany, with a population of approximately 18 million people. Ceramic Fuel Cells employs approximately 30 staff at its volume manufacturing plant in Heinsberg, in North-Rhine Westphalia.

Mr Brendan Dow, Managing Director of Ceramic Fuel Cells, said:

"We welcome the North-Rhine Westphalia Government's subsidy program, which will help our breakthrough products become cost-competitive with older and less efficient existing products, and deliver real value to our commercial customers.

We expect this program to give a boost to our sales in the coming year, which in turn will drive higher production levels in our factory in Heinsberg and substantially lower product costs.

BlueGen is one of the few fuel cell mCHP products available in the market today, with almost 100 BlueGen and mCHP units installed and operating in Germany, delivering clean power and hot water for our customers and helping Germany make the transition to a clean energy future."

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. The peak electrical efficiency of BlueGen is up to 60 percent, far higher than any other small scale generating technology in the world. With the added benefit of heat, total efficiency is up to 85 percent.

Earlier this month Ceramic Fuel Cells announced that 25 of its BlueGen units are being used to power Germany's first commercial virtual fuel cell power plant. The virtual power plant was officially opened by Mr Peter Altmaier, Germany's Federal Minister for the Environment, Mr Johannes Remmel, Minister for the Environment in the state of North Rhine-Westphalia, together with Mr Bernd Wilmert, Chairman of the Board of the municipal utility network Trianel, and Sven Becker, CEO of Trianel. The Trianel network will offer BlueGen units to end customers as part of its EnergieBlock(R) micro combined heat and power offering.

Speaking at the official opening event, Mr Remmel, North Rhine-Westphalia's Minister for the Environment, said:

"North Rhine-Westphalia is the state for energies of the future and needs more utilities of the future for an accelerated energy transition. Combined heat and power [CHP] should play an important role in our federal state. Therefore, the state of North Rhine-Westphalia is planning a support programme for CHP of 250 million Euros. Our goal is to increase the CHP share of electricity generation to more than 25 percent".

Ceramic Fuel Cells and its local distributor sanevo blue energy are marketing BlueGen units to small commercial, Government and utility customers throughout Germany.