Australia's renewable energy future
Fuel cells: A real option for base load electricity
Tuesday, 3 February 2009
Dr Karl Föger
Chief Technology Officer
Ceramic Fuel Cells Limited
Karl Föger is one of the founders of Ceramic Fuel Cells Ltd (incorporated in 1992) and has managed the development of CFCL's technology from the beginning as member of the executive management team. In his current role as chief technology officer is responsible for corporate technology and product strategy including CFCL's technology roadmap, advises the CEO and board on technical matters and manages CFCL's extensive IP portfolio.
He obtained a PhD in physical chemistry from Innsbruck University in Austria. In 1975 he joined CSIRO where he held various research and management positions (from 1975 to 1999) culminating in his appointment as chief research scientist.
Karl is a fellow of the Australian Chemical Institute, a member of the American Ceramic Society and adjunct professor of RMIT University. He is Australia's representative on the IEA Fuel Cell Annex and a board member of the European Fuel Cell Forum.
He is internationally recognised in the fields of catalysis and fuel cells and has served on the scientific/technical organising committee of a number of international conferences. He has published over 150 papers including several extensive reviews and book chapters and holds six patents. His current scientific interests include fuel cells, energy technologies, nanotechnologies, catalysis and alternative fuels, materials processing and ceramic fabrication.
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Good evening, ladies and gentlemen. I see that we have a full audience here and that is always very pleasant to see. I hope that I will give you some interesting insight into a technology that I have been convinced for many years will be a real option for today and for the future. We all know of the issues around climate change, such as efficient and inefficient use of fossil fuels and so on, about which we see headlines in the newspapers every day. I hope that by the end of my talk I will have given you an overview of a technology that you will see fitting into your home. As soon as the product comes out in a couple of years, I hope that you will all rush out and buy it.
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I will give you a short introduction to fuel cells. I don't really know how many of you know fuel cells. Often they are associated with cars, but I will show you that they don't have to be associated only with cars. Then I will talk about our company and the type of product we are developing and why we are developing it. Also, at the end I will talk a little bit about remaining challenges.
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The fuel cell is an electrochemical device that is something like a battery. It has electrodes and an electrolyte. It converts fuels into electricity. It is not a charging device; as long as you supply fuels, you get electricity. Such cells have a number of advantages, particularly their low emissions and high conversion efficiency. It is because of those advantages that we are in the game. Fuel cells are not new; we have known about them for 160 years.
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I will give you a short chromatic here. You have an electrolyte between two electrodes, an anode and a cathode. On the anode you convert the fuel and on the cathode you convert the air. The electrolyte is an ion conductor – an oxygen ion conductor, a proton conductor or other ions, like carbonate or hydroxyl. They are a very low-voltage but very high-current device. When you shorten the electrodes, you get something like 0.5 to 0.8 volts per cell, but you can get up to one amp per square centimetre. If you have 100 square centimetres, you can get 100 amps and 0.8 volts. It is quite a challenge to handle something like that. You have to stack them up in series in order to make anything useful out of them.
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This is the slide of the general advantages of fuel cells that everybody shows and I will come back to it later: highsystem efficiency, low pollution and ideal for dispersed power – and I will explain that in more detail. You start with one cell and stack it up. You can do 20, 50 or 100 cells. You can do a few in parallel. It is a modular construction.
Fuel cells also have excellent load-following capabilities. They cannot follow load in microseconds because, if you pull more electricity out, you have to feed more fuel in. But, in minutes, they follow quite easily. So you need a short-term storage device; otherwise, they are very good for load following.
The electrochemical combustion reaction is an exothermic reaction, so you get some heat as well. It is a co-production of heat and electricity.
Most of you will have heard of fuel cells in connection with hydrogen. Hydrogen is the fuel for a fuel cell. That is correct and it is particularly correct for lowtemperature fuel cells. But, in hightemperature fuel cells [HT-FCs], such as ours or the molten carbonate fuel cell, you can convert directly natural gas, seam gas or other fuels, for example biofuels. The SOFC and the polymer fuel cells [PEM] are solid-state devices. That means they have no liquid electrolyte, which gives them an advantage in designing the system and the stack from it.
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This is just a short overview of fuel cells. The alkaline fuel cells [AFC], the first lot, are well known from the space application. They are the ones that are used in the space shuttle. UTC [United Technologies Corporation] has been using them in space applications since the late 1960s.
Polymer fuel cells [PEMFC] are very well known from their use in cars. For instance, in Australia, there was a bus trial in Perth up until last year. The trial used three fuel cell buses that worked with that technology. Direct methanol fuel cells [DMFC/DEFC]: they can convert fuels like methanol and ethanol very easily. The first breathalyser was an ethanol fuel cell, so maybe you have to thank them for that.
Then you get larger scaled, higher temperature fuel cells, such as the phosphoric acid fuel cell [PAFC] operating at 200 degrees Celcius. But all of those still need hydrogen, except for alcohol fuel cells. However, when you go to the higher fuel cells, such as molten carbonate [MCFC] and the solid oxide [SOFC] technology that we are using where you can use methane in the fuel cell, you get very, very high system efficiencies from natural gas to electricity.
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Here are some examples, some pretty pictures. There are some microfuel cells for mobile phones and MP3 players on the left and a little half-kilowatt battery charger, which is commercially available; however, they work on hydrogen. Then you have a methanol fuel cell, which already is sold now in Europe in quite some numbers for RVs and camper vans. Up there is a Ballard one-kilowatt stationary system, which is a similar sort of application for backup power in mobile devices.
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Then there are mobile applications for various cars that have been built; those fuel cells in particular have become fashionable again. The car companies, with all the trouble they have had in the last few months, are now saying, 'We will become greener and we will make greener cars.' I want to see it happen first. It is quite interesting. If you go back five years, the automotive companies had plans to roll out cars, in series, in 2010–11. Then it went to 2015 to 2018. Now it has come back a bit again and, for General Motors, it is now 2012. So maybe we will see them.
This is the trial with the buses that drove around Perth. All of those demonstrations have been quite successful. For instance, that little Mercedes up there [indicating on slide] has done many thousands of kilometres in all sorts of weather conditions and it has worked quite well.
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Then we come to the stationary applications, which is the area where we are applying our technology. With stationary, you can do anything from kilowatts to megawatts. Up on the extreme left there [indicating on slide]is our system, which is a one kilowatt system. The Japanese polymer electrolyte fuel cell power system of 700 watts is for residential applications. This system here [indicating on slide] goes to three megawatts, so it is already a little power station. Fuel cell energy has something close to 100 megawatts in systems already operating out there. They are all getting to the commercialisation stage; they are not laboratory playthings any more.
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Looking at the underlying technologies, I have talked about all these types of fuel cells and now I want to concentrate on the solid oxide fuel cell [SOFC] because this is the technology that we are pursuing. Solid oxide fuel cells will operate at somewhere between 550 to 1,000 degrees Celcius, depending on what type of electrolyte you are using. They generally have a ceramic layer. The electrolyte is either a doped zirconia or a doped ceria and you have ceramic electrodes on it, anode and cathode. But, different from the other fuel cells, it has the most flexibility in terms of design. There are so many different options for cells around. You have round cells, flat cells and flat tubes, and you can stack them up in different ways. Up at the top [indicating on slide] you can see how you stack tubes and down here is how we would stack the cells. There are lots of options there; therefore, it is a very, very versatile fuel cell technology. That is just a little bit of an overview so that you understand where I am coming from.
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Now I want to talk about our company. Who are we? We formed in 1992. We are a spin-off from CSIRO. I think we started trying to promote the company in 1989 and we managed to get it established in 1992. As Mike [Dopita] has said, we started off with 20 CSIRO staff. But, after five years, CSIRO said, 'You either come back or stay with the company,' and they left me. But I had two motivations for staying. First, it was difficult to go back to a bureaucracy after establishing a start-up company; but that is only one thing. The other thing is, when you start something, it is sort of your baby and you would like to see it through to commercial success. My main ambition was to try to get there, and I am quite satisfied. It has taken much longer than I expected and, if I had to do it again, would I? I could not tell you yes or no. But it is getting there slowly.
We have headquarters in Noble Park in Melbourne and we have facilities in the UK and in Germany. We have about 110 employees and a very, very experienced and highly qualified design team and R&D team. We are listed on the Stock Exchange. Is that good or bad? I cannot tell you. The share price is terrible at the moment; sometimes it is good and sometimes it is bad.
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We have quite extensive facilities. It is very expensive to do hardware development. When you look at these examples of the infrastructure that we have in our facility in Melbourne, it is quite amazing. We are talking about many, many millions of dollars of investment in those fabrication facilities, R&D facilities and testing facilities. Those facilities are extremely important. For instance, our company has 50 test stands and the cost of each of those is about $100,000, so that is $5 million already just in testing facilities.
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How are we different from others? I had a slide up here before about the advantages of fuel cells and the top point was high electric efficiency. Unfortunately, most of our competitors have taken shortcuts because of some perceived technological complexity and they have sacrificed efficiency greatly. When you see fuel cell systems operating on natural gas or any fuel that is available currently, you will see, on average, 25 to 35 per cent efficiency. I do not see the point of that, because an engine will give you that and an engine is 100 years old. It is not new technology and it will always be cheaper because it is so well developed. I always said, 'No, we don't do shortcuts.' We went through what is supposed to be the system's complexity in its entirety. We do internal reforming with the methane going directly into the fuel cell stack. We developed that technology and it is working extremely well. We had to develop a very, very good cell in order to be able to get that high efficiency. We did a stack design that has a few challenges. One challenge is that it has to be totally leak tight because we have 2-stage conversion. We take the exit of one stage and convert it again. But, when you get that working, you have a very, very high fuel conversion in your stack and, therefore, high efficiency.
Then there is thermal management. A fuel cell produces heat, so the way you manage that is extremely important. Heat losses are very, very critical, particularly in a very small system like a one to two kilowatt system. Because of the steam reforming, which is an endothermic reaction – a heatremoving reaction – in the stack itself, we need less air to cool the stack. That has enormous benefits because the biggest electric consumer in the system itself is the out blower. Anybody with engineering qualifications knows that the power of a blower increases with the square of the volume and the forth potential of the pressure top. So, if you optimise that, you can save yourself enormous amounts of power. Our first blower used 300 watts in the one kilowatt, which is 30 per cent of the power; now we are using less than 100 watts. That is an enormous improvement. In addition, we did a very, very tight integration.
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I will just give you an outline of how it works in principle. The natural gas comes in. We take the sulfur out with an absorbent. We mix steam into it. We go through a pre-reformer, which is required to take out the higher hydrocarbons. It is unfortunate that natural gas is not just methane; it also has ethane, propane and butane in it, and they will cause a problem in our system. So we take those out. The rest we heat up to about 700 degrees and then pass it through the fuel cell. The air goes through the cathode side. On the cathode, you make oxygen ions out of the oxygen in the air and they move through the electrolyte and combust the fuel on the anode side. Again it is a reaction. We operate power densities of between 300 and 400 milliwatts per square centimetre and at a potential 0.8 Volt.
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Here you can see the technology, our cell; I have one here. It is ceramic and is about 250 microns or 0.25 of a millimetre thick. It has an electrolyte layer, a zirconia layer, on it of 10 microns. It is 70 millimetres by 70 millimetres in size. You have the anode on this side and the black material is the cathode on this side. A cell like that, depending on how you operate it, produces between 12 and 15 watts and then you have to stack such cells up in order to get more power and more voltage out of them.
It's a very, very highpower density cell. You can see here that you still have about 0.8 volts of the cell at something like 650 milliwatts per square centimetre. As I have said, we only operate them at about 300 to 350 milliwatts, but there is a huge safety margin in operating them like that. You can see that they are being operated under real-system operating conditions on natural gas fuel and with real system parameters.
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Then we stack them up. You can see here a metallic interconnecter that connects one cell to the other. So this repeat unit is that interconnecter in which there are flow channels for the gases; it has the cell in it and a window frame on top. That is for testing purposes only. Our real stack is a two-by-two array structure. You have four cells in one plane. You see it up here [indicating on slide]. Again you put the cells on there and then stick a window frame on it, just like an ordinary window, where you put a glass pane in the window. We use a glass ceramic seal to seal it in place. The glass ceramic seal is dispensed on to it. Then we heat it up to 850 degrees and it all fuses together into a block.
Here you can see what the block then looks like [indicating on slide]. This is a two kilowatt stack with 50 layers. Actually, it is not two kilowatts; it is 2.3 kilowatts because it is two kilowatt net to electricity to the grid.
So now we have this technology. It works very well. It is wonderful to test. Scientists and engineers are very happy to run these cells through their paces in the test station. But at some stage you have to say, 'What do I do with this?' The investors have given us a lot of money and I have to say that we have 'burned' to date something like $200 million. You might think that is a lot of money, but keep in mind that just developing a new model of car costs something between $2 billion and $4 billion; so it is still chicken feed compared with that.
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In the company's early days, we were supposed to make big power stations – 300, 400, 500 kilowatt systems, but four or five years ago I convinced the board that that was not a good way to start. So we started with a small system, a home power station. It's what is called a micro-CHP [micro combined heat and power]. It is the technology that is asked for at the moment particularly in Europe. I do not know whether any of you know about the hydronic heating systems that they use in Europe. You have a boiler and you make hot water, which you circulate around the house. So, by taking this hydronic heating system and attaching our generator to it, you then have a micro combined heat and power system. Why would you do that?
Compare that with an energy supply that comes to the house from electricity from the grid – the gas to the boiler. Okay, the boiler does very well. If you have a condensing boiler, it will give almost 100 per cent efficiency. The electricity looks different. It depends on the country. In most countries the grid efficiency is about 35 per cent, but often that does not account for low-voltage losses; that is what you have in your area of distribution.
In Australia it is much worse. Indeed, most of the time the electricity coming out of your power point is probably no more than 25 per cent thermally efficient. In addition, in the power station the heat is generally thrown away because it cannot be used. If you are in the Latrobe Valley, you cannot use all that heat and you cannot pipe heat around very far. In your combined heat and power system, you use the heat and you use the electricity; both are produced with very high efficiency. You have something like 85 per cent efficiency versus something like 30 per cent efficiency. So there is an enormous amount of greenhouse savings. Also, even if you use it on natural gas, you might say that is a fossil fuel and not renewable; but it is a very, very efficient use of a fossil fuel. If you use biogas or biofuels, you are totally renewable as well. So that is the motivation behind this product. I have some slides towards the end of this lecture showing the European interest in that.
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We have been developing that system. We did four generations of prototypes starting big and getting smaller and smaller, because you have to learn. The first one was that huge box that looked a bit like a wardrobe. Then it became less than half that size and now it is even smaller again. So we have learned how to package this very well and how to make it more and more efficient.
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Our current system has an output of two kilowatts. It has an AC net with an AC electric efficiency of 55 per cent. That is natural gas in and AC electricity into the grid at 55 per cent efficiency. There is no other technology or generator out there in that size range that can come even close to that level of efficiency; there is nothing over 45 per cent out there. So we do 10 per cent better than anything else. This is a real world record and I'm really proud of this system because we had to fight very, very hard to avoid shortcuts being taken with it like our competitors did, because everybody thinks, 'Oh, you might get the product out earlier; you might get a simpler product out.' We have the simplest system of any of our competitors and we also have high efficiency, and they didn't get the product out any faster either. So I was proven right at the end.
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This slide shows a true test result and not something that has just been modeled. Here is the control screen of our systems that tells you of all the inputs and outputs [indicates on slide]. In addition, all the efficiencies can be seen [indicates on slide]. It also shows how the system is configured. Up the top there is a small water treatment system. We then evaporate that water, making steam out of it. That steam is drawn in through a ventury. The fuel, the natural gas, goes through a pre-reformer, which operates at around 400 degrees Celcius. Next it goes into a 'heat exchanger', heats up to about 700 degrees Celcius and then goes into the stack. In the fuel cell stack we convert about 80 to 85 per cent of the fuel, the rest is burnt in a burner, and we use the exhaust gas to drive that heat exchanger. That is a fairly simple system. It has only one rotating device, and that is the air blower there [indicates on slide].
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I said that they are very, very good for load following. This is an experiment that we had to do for a Japanese customer. We had to do hundreds of cycles in the space of 50 hours, or something like that, and that is why it looks like so messy; we had to go to half load and back to load. They wanted to see whether the system would have degraded after those cycles, yet you will see that it has exactly the same output after as it had before we started the cycles.
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We have three years of field testing experience, which are tests not in the lab but out at customer sites all around the world – from Japan to France, the UK and Germany. We have clocked up well over 90,000 system hours doing that. So we know what we are doing and we are now ready to commercialise the technology.
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The first product is the micro-CHP. It is a fuel cell and a condensing boiler for the European market. We are talking about Germany, France and the UK and Japan. We have partnerships in place there with utilities and heating system producers because they have the instillation and maintenance networks. They will do the appliance and install it and we will supply them with the fuel cell generator. Currently we are doing product development, and the fully integrated units are available from this year.
In our technology road map as soon as we hit 50 per cent efficiency in a real system our product makes sense also for Australia. Unfortunately, the usual micro-CHP does not, because we do not need so much heat here. You would not run it if you had to throw the heat away; therefore, it does not make any sense for this country. It is for that reason we have focused on Japan and the northern hemisphere. However, when you hit 55 per cent efficiency, you beat anything in terms of grid electricity and you have to say that you could consider making a system for Australia.
The other thing is that, at 55 per cent electric efficiency, your heat production is relatively low. In a kilowatt system it would be 500 to 600 watts. So, if you produce that heat and you run the system 24 hours a day, it gives you something like 200 litres of hot water. So it makes sense just to make hot water for domestic consumption. We are starting a product development for Australia and we hope to have a product available towards the end of 2010.
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These are the micro-CHPs. We supply this generator to our partners. They integrate it in a box with a condensing boiler. Then there is the storage system, which is either built into that appliance or separate. The trend in Europe has been for modular heating systems. So, if you want the 300 litre tank, you get the 300; if you want the 150 litre tank, you get the 150 and the boiler is separate and so on. Then you can put solar thermal in or something else. So you then add our system on top of it, which means you have another choice.
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These [Gennex] are our partners. We also decided to partner with electricity companies because, if you want to run it as a baseload generator, you will be feeding electricity back into the grid. So you need the agreement of a utility.
I was very pleased when I went to a conference in mid-December last year in Nice and suddenly realised that this idea was being accepted universally. We know that a lot of governments have renewable targets – 25, 30, 35 and 40 per cent – but very little thought goes into what is needed to stabilise the grid when you put in so much variable generation. You have no control over solar or wind or anything like that.
The IEA has identified what it calls a network resource factor, which is the maximum available generation that you can put into a particular network before you have to get into squillions of dollars of investment. You either put significant storage into it or upgrade the whole network. However, if you had very well distributed systems that could be controlled remotely – if a utility needed more power in one area and it could turn the systems up – it would solve a lot of problems and would save squillions in network investments.
So we had the idea of a utility being a service provider: installing that system into people's houses and arranging with those people that they would get energy at a reasonable rate but they are controlling the systems themselves. You would also have other advantages that the householder normally would not have. You could capitalise the CO2 incentives and all those sorts of incentives. That is why we have these partnerships with the utilities.
This is the Australian system. It is a preliminary spec and it still might change. There will be a storage tank of some size coupled to our system. We are thinking of a two kilowatt system. It would be a box around the size of 600 millimetre by 600 and about 900 high. In addition, you would have very low pollution and very low noise. So, compared with a diesel generator set, you would have a much quieter unit. That has an enormous advantage, as far as siting the unit is concerned. In volume, we believe that we can make one for $6,500, but that is in reasonable volumes. We have to work that up to those volumes first.
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Basically, this slide states that we have everything in place for commercialisation. At the moment we are building a manufacturing plant in Germany, which will be completed later this year. In the UK we have a powder plant for making zirconia, so we can start to roll out units.
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Again, this is the electricity supply model that I have spoken of. You have your distributive generation system instead of the hierarchical central station power grid.
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Our technology is an ideal technology for distributive generation [DG]. The very, very high efficiency of 55 per cent is very important. The system makes very low amounts of heat. For example, if you have a CHP combined heat and power system and it makes a lot of heat, you can run it only over three months in winter; otherwise, you shut it down. But, if it makes very low heat, you can run it all year round. This is particularly useful now because Germany introduced a capital subsidy of €1,650 per kilowatt. But you get the top subsidy only if you can operate it over 5,000 hours; otherwise, it gets discounted.
Low emissions: I have showed you that it can load follow. You can do bi-directional grids. Our systems are bi-directional; they can export and import. We also can control systems in Germany from Australia and vice versa. We had an exhibition at the Hanover Fair last year. We had a huge LCD screen there – because we were not allowed to run the system there – and we ran the system in Melbourne demonstrated to visitors that we could change the parameters. So we have proven that it can be controlled remotely. It is a controllable DG generator, so you can turn it up and down. It also has the potential to be a virtual power station – that is, if you combine them. If you combine 100,000 of those systems, you would have 100 megawatts of power.
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It has various advantages and I have brought some of those out already. We really believe – and the view has now been adopted widely – that it could be more valuable to a utility than to a householder. But at the end, if somebody just wants to have one, they can have one too.
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As I have said, in Europe and in Japan we have these partnerships for product development and for deployment.
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We are starting to scale up. We have a pilot plant in Australia for making stacks and cells. We have a powder plant in the UK.
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This will be our first manufacturing plant in Germany, which is about 40 kilometres north of Aachen on the Dutch border, whose capacity initially will be 10,000 units per year.
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Looking at it, why would you do it? We have all seen these sorts of headlines: 'Energy is always needed' and 'The need for energy is increasing'. Interestingly enough – this is another incentive, particularly in Europe – if you take Germany as an example, the government has put in many, many billions of euros to entice people to better insulate their houses. It used to take about 200 kilowatt hours per square metre per year to heat a house built in 1980. With modern insulation technology, you bring that down to below 50. So you have a quarter of the heat requirement. Suddenly utilities have a gas network that is under utilised and, on the other hand, they have an electricity network that is over utilised, because the house needs more and more power with all the electronic gadgets that we keep on buying. If you put a microgenerator in there, you could even out the gas usage versus the electricity usage. So it is a very attractive option.
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Why did we choose Germany? There are some points on this slide: the high-end domestic boiler market. If you think a boiler will cost you $1,000, you should think again. In Germany, the average price paid for a high-end high-efficiency boiler is €6,000. The lowest price is about €3,000 and it goes up to €9,000. So they are used to paying high prices. They also have taken up energy efficient technologies. They have the greatest number of solar instillations. It is almost a paradox that in Germany, which is not the sunniest country in the world, every second house has a solar PV [photovoltaic] on its roof. They always say to me, 'You come from sunny Australia; where is your solar PV?' It is almost an embarrassing situation. In addition, they pay for it. They want to feel green and they pay for it.
A compulsory energy rating for houses was introduced there and that affects the price of the house. The higher the rating, the more value you get. Real estate is different in Europe. The value of your house is much higher than the value of your land. Again it is a paradox that in Australia, which is such a big country, land value should be the driving force.
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The government introduced a 25 per cent CHP target, a subsidy of €1,650 plus a feed-in tariff of up to 11 euro cents per kilowatt hour. So it is very attractive. I took that 25 per cent CHP and said, 'If a quarter of that comes from micro-CHP – there is a limit as to how much industrial CHP you can introduce because you have to pipe the heat around – you can get to an enormous amount: 3½ million units by 2020. That will sustain us for a long, long time to come. That would mean that every fourth house would have one of those systems.
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In Western Europe, they are also talking of the 25 per cent target. You end up with €12 million in a very conservative assessment; at present, it is only 15 per cent.
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Turning to Australia, I have to say that there are no CHP or DG targets or incentives in place, but there are seven million houses in this country. I thought, 'Let's assume that every sixth house is suitable for our system; we could sell one million systems in Australia.'
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What are the benefits of doing that? Are there greenhouse gas savings? Here you will see what the difference is already between Germany and Australia in grid efficiency. In Germany the grid produces 620 kilograms of CO2 per megawatt hour; our system running on natural gas produces 250 kilograms. So, if we install 3½ million systems and each system makes 10 megawatt hours per year, we save 13 million tonnes of CO2 annually. Australia is worse. We are producing 1,000 kilograms of CO2 per megawatt hour. So, even if we throw the heat away and are then at 360 kilograms, we are still only around a third of the CO2 output compared to electricity that is supplied from the grid. The savings are six million tonnes to 10 million tonnes, because I only assume 10 megawatts. If a two kilowatt system runs virtually 8,000 hours and that is 16 megawatts, so the savings are significantly higher.
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What is the challenge that remains? The challenge is costs. We have cracked most of the technology targets – technology will always get better – but we have to get the price down. In principle, you have seen that it is relatively simple. There is a piece of ceramic and you have two pieces of steel. It is not a piece of equipment that has 50,000 components, so it is fairly simple. But you need volumes to get the price down.
We believe that initially, if we were producing something like 10,000, you would pay something like Euros 15,000, which would be €3,000 to €4,000 in volume. It would be similar for the Australian one. But, with volume manufacturing, you get volume learning curve of 10 to 15 per cent when you double production as with engineering equipment or machinery. Then you can calculate how it comes down as you go to 100,000 or 200,000 units.
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Finally, there are a few conclusions. We have developed a technology. As I said, I am proud. I think we have the highest-efficiency small generator that has ever been produced in the world. We are getting improved reliability and lifetime. We still have to do some improvements, but it is approaching the commercially useful scale. We validated load following and remote control, which was very important for using it as a controllable DG generator. We are also getting the manufacturing infrastructure in place; we are building a manufacturing plant. In addition, we have been working very hard over the last two years to build a supply chain in Australia, Europe and Asia.
There are still some challenges left. We are not making enough money to sustain ourselves, so we rely on investments. You all know of the headlines over the last few months. If you have to rely on investment, it is not a pretty sight. We still have to raise capital to survive, so we will have to see how we get through this. The other thing is the time scale of the product. We also have to rely somehow on third parties like the boilermakers, the utilities and so on who are our partners, and their time scale does not always accord with ours. That is another challenge for us.
That is all I wanted to tell you. I hope you have gained a reasonable idea of our company and the technology we are using. As I have said, when the product comes out in 2010, I hope every one of you rushes out and buys one. Thank you very much.
Discussion
Chair (Mike Dopita): What a persuasive sales pitch from Karl. I will accept questions now. Could you indicate until I have recognised you? We will try to keep the questions running quickly.
Question: Malcolm is my name. I have a question on efficiency versus load power. Your graphs seem to indicate that the thermal efficiency decreases with a decrease in load.
Karl Foger: Between two and one kilowatt, you are definitely above 50 per cent. So between 1,200 or 1,300 watts to 1800 watts you are probably around 55 per cent and then it falls off. As you come down further, of course, the parasitics start to hurt you. You have losses in the inverter and losses from the use of the air blower, and it is coming down. But the fuel cell has a fairly flat load curve and it does not drop off. You have a wide window, so you could run it at half power and still have over 50 per cent efficiency.
Question: How long does it take to start up?
Karl Foger: That is one of the issues. It takes about four to six hours to start it up, so you would not want to have it as a start–stop system. You would start it up and then maybe shut it down if you go on holidays or want to do a maintenance cycle or something like that. However, I think the technology is more suited to a baseload generator.
Question: My name is Tom Gosling. In comparing efficiencies with those of coal generated power stations, do you take into account the cost of transporting the fuel – putting it in a cylinder and taking it to the distributive destination, the household or wherever, as part of the overall energy cost?
Karl Foger: At the moment we are thinking of the natural gas grid. Maybe later on we will look at remote systems with LPG. But there are different economics there because a house not connected to the gas grid which runs with LPG, if it is a remote-area power supply, normally it needs tone compared to a diesel generator; so they already have a fuel delivery infrastructure in place. You have to compare it with that. But I believe that our next product for Australia will be a remote-area system, probably running on LPG.
Question: Fossil based?
Karl Foger: Yes, LPG rather than diesel. Diesel is a very complex and dirty mix.
Question: What would the servicing requirements be for the desulfurisation component?
Karl Foger: Yes, that is a very interesting question. At the moment we are having some very intense discussions with the gas companies in Europe. I will give you one example. In Japan you have a canister of a few litres of sulfur absorbent and that lasts you probably five years; in Germany it lasts you eight months. There are enormous economic issues attached to that. The problem is that Japan uses a mercaptan to odourise the gas; Germany uses tetrahydrothiophene (THT) and, unfortunately, that does not absorb very well. So you need a large absorbent bed and so on. Because of the sulfur issue, one company in particular is making a sulfur-free odourant that is based on a nitrogen compound, and that will be much better for us. About 25 per cent of the German natural gas grid is odourised with that, but the rest is still THT. So we are trying to convince them to phase out THT. If they do not, they should at least go to a mercaptan or something like that. In Australia we are somewhere in between. It would probably last for three years, because we do not put as much in as the French do. The French put in the most odourant. They mustn't be able to smell very well or something like that.
Question: What are the fuel input options in Europe, if you get interruptions to the gas supply?
Karl Foger: If you get a fuel failure, the system has a safe shutdown mode. Unfortunately, a fuel cell does not work without fuel as the anode of the fuel cell is nickel. Nickel at 700 degrees oxidises if you do not supply fuel to it. So we had to develop a quite elaborate system to shut it down. The first system looks like a wardrobe. The safety system consisted of many safety valves and other components in it to prevent damage to the fuel cell and to fulfill all the safety requirements for CE certification.
In the meantime, we found a much simpler proprietary shutdown mode that allowed us to replace all this very expensive equipment for something very cheap. We were able to get CE certification for all of our prototypes. But basically, when the fuel fails, it goes into a mode to protect the fuel cell and it starts up again when the fuel comes up again. It will just slowly cool off. It is very well insulated, so it takes a long time to get down to room temperature.
Question: You have mentioned 700 degrees as being the furnace heat inside of it and not only in terms of nickel oxidisation as a potential problem. How does one go about the mechanics of containing 700 degrees inside a little unit inside a wall of an apartment in downtown Munich, both on the physical side of ensuring that there's safety and also on the marketing side to convince your apartment dwellers that that 700 degrees humming away on the side wall does not actually pose a problem for them?
Karl Foger: Yes. I am a little cynical because I have to say that, if you have a flame burner there, that is a temperature of about 1,200 degrees. But this is an issue. Again, we went down the hard way with our product development. The first field tests that we put out were in a laboratory type environment and they would not need certification. In Australia you get away with a type B gas appliance. Type B certification would never allow you to install that in a person's home. We could have done the same thing in Europe. The systems were installed in the training centres of the utilities and areas like that. But we decided, 'No, we don't do that; we get CE certification for it,' because then we learn in the very early stage of the design what is safe and what is not safe.
The other issue is that, if we want a load-following system, we have to keep the heat in; we have to fight for every watt of heat lost. To give you an example, we used to have thermocouples and other feed throughs break through the insulation. We removed all of those. We have no more breakthroughs to the insulation. We control the system with few thermocouples because we cannot afford pipes and things coming through the insulation. They just lose too much. What happens is, as you ramp down the electricity, your heat production goes down. So you can imagine that, if you have a 500 watt loss in heat and your heat production in the stack is only 400 watts, it starts to cool off. Indeed, Siemens, one of our competitors who was making large systems, 10 years ago built a 100 kilowatt system. When that went down to 75 per cent of its load, they had to put an electric heater on to keep the stack hot. We said, 'This is not an option for a small system.' Therefore, good insulation is critical and the fuel cell system we have made is a very simple block system. We have no space lock fittings and things. It is all plenum manifolded. All you have are tubes, cylinders and plates, so it is very easy to put insulation around it. It is fully certified. The outside is perhaps 50 degrees at the most. It is perfectly safe. It is much safer than your indoor heater.
Question: On one of your last slides you mentioned considerable water savings. Could you enlarge on that? In Australia we may save a lot of greenhouse gases but use too much water.
Karl Foger: Yes, that is very simple. We recover the water. I said we have a little water treatment system. In the early systems, we used to attach it to a water system to make the steam for our steam reforming. But now we recover condensate, and we do that for two reasons. One is to save water. But the other reason is that water quality, particularly in Europe, varies enormously from place to place. So, if you want to get a universal water treatment system that handles very hard water and iron containing water and so on – you need a system of this size. So we decided that we would recover our own. It is not totally clean, but it is always the same dirt and so we know how to take it out. Therefore, we do not use much water.
If you compare that particularly with Victorian brown coal power stations, they are not particularly saving on water. They use significant quantities of water and all good drinking water because the waste water is corrosive. They have lots of water there from the brown coal, but it is all saline. That is why this message was pitched in particular at the Victorian government.
Question: You have mentioned that hydrogen fuel cell buses were used in Perth very successfully. As we gradually run shorter of oil, can you envisage this system being used on trains, trams and aeroplanes?
Karl Foger: Firstly, that is still a few years off; there is still a lot of gas around in the world. I also think they will find much more gas as the Earth warms up. You do not really want to let it escape; it is a much worse greenhouse gas than CO2. But we also think that, in the future, these systems would be ideal for biofuels. We are considering doing a demonstration in Germany – it will probably occur next year – on biogas. The fuel cell will burn hydrogen as well. It is just that we will have to see how we need to change its cooling mechanism.
Chair: Thank you very much. I think that is all the time we have for questions. I thank everybody for turning up. Before you go, let me bring to your attention – you should all have these little fliers sitting on your desk – that the next lecture in the series is on biomass. That is to be given by Dr Steven Schuck, Manager of Bioenergy Australia. Again it will be on the Tuesday, same time, same place. I look forward to seeing you all again at that time. Cheers.
