Maybe you(s) have seen this article already , but in case some missed it 19/8/09. ------------------------------------------------------------------------------------------------------------- Ceramic Fuel Cells Prepares For The Commercial Rollout Of Combined Heat And Power Units In Australia.
By Rue Swabey / www.poweralternatives.com
Australia-based, Aim-listed fuel cell company Ceramic Fuel Cells is inching towards commercialising its fuel cell technology. The company has developed a next-generation micro combined heat and power (m-CHP) unit that converts natural gas into heat and power without burning it. The unit generates its power on-site, resulting in reduced transmission losses.
In recent months the focus of the company’s management has been on averting a cash flow crisis, but Ceramic Fuel Cells has now rebuilt its balance sheet and is in a position to accelerate commercialisation of its m-CHP unit, with the aim of becoming cash flow positive by 2011.
Last year Ceramic Fuel Cells booked an impairment charge on £12.3 million worth of mortgage-backed securities and credit-linked notes, which resulted in a £14.6 million loss in the first half of 2008. This ill-advised investment of the proceeds the company raised on listing eroded confidence in what had been a highly-regarded management team. However, shareholders’ confidence in the technology did result in the majority of them subscribing to a rights issue at 2.2p that raised a net £15.5 million.
The fundraising also attracted two new cornerstone investors. As to the investment losses, Ceramic is suing its investment adviser, but there is no certainty that the funds will be recovered. To meet the new requirements for lean operations, management has implemented cost control measures, including a 20 per cent headcount reduction.
The cash flow crisis has thus far deflected attention from the company’s progress on the technical front. In February Ceramic announced that it had achieved 60 per cent net electrical efficiency from a 1.5kW system running on mains natural gas. This is significantly higher than the 30 to 40 per cent power conversion rate of a traditional power station. The system has also achieved a commercially viable level of degradation and longevity, making it one of the world’s most efficient electrical generating technologies.
The company’s original target market was Europe, given CHP rebates, attractive feed-in tariffs and the possibility of carbon credits, but it is now preparing a commercial launch for Australia. In May Ceramic demonstrated BlueGen, a modular fuel cell generator, which it is planning to launch in Australia in early 2010.
It has signed an agreement with sustainable development agency, UrbanVic, to showcase the BlueGen in the agency’s housing developments. The generator is targeted at the replacement market rather than at the new build market. It is expected to sell commercially at between £3,000 and £4,000, offering a five to six year payback period. Ceramic’s management is currently negotiating distribution agreements for the US and Europe.
Meanwhile the company’s NetGenPlus unit continues to undergo trials in Europe. In February E.ON announced that, after testing the NetGenPlus for nine months, it will enter into a follow-on contract to develop and deploy m-CHP units in the UK. The contract should run between 2009 and 2012, with E.ON committing funding at several stages, subject to Ceramic meeting certain targets. E.ON has agreed the profile of a potential future order of 100,000 units over six years from 2012.
Ceramic Fuel Cells also has partnership agreements with the UK’s PowerGen, Germany’s EWE and Gaz de France. But an important partnership agreement with Dutch utility Nuon was cancelled following the acquisition of Nuon by Swedish utility Vattenfall in March. This is a significant setback for Ceramic as Nuon’s order was estimated to be worth in the region of €57 million and Ceramic’s m-CHP had successfully met or exceeded all of the performance targets set by Nuon. Ceramic’s management is in talks with other utilities in a an effort to make up for the lost orders.
In September , Ceramic Fuel Cells will commission a €12.4 million facility in Germany with capacity to manufacture 10,000 2kW solid oxide fuel cells. The opening of this facility was originally planned for June but has been deferred in the wake of the termination of the Nuon contract and the uncertainty on orders. Commissioning of the facility will now take place in three stages.
In order to regain market confidence and overcome the damage to its reputation arising from the ill-advised investment of its IPO funds, Ceramic Fuel Cells needs to sign a new partner to replace Nuon, improve the visibility of the order book and accelerate the rate of commercialisation.
CFU Price at posting:
19.8¢ Sentiment: None Disclosure: Not Held
