Cambridge Consultants - Micro CHP revenues to rise to over £1bn per annum by 2010

Micro CHP revenues to rise to over
£1bn per annum by 2010

According to latest predictions, early adoption of domestic combined heat and power (CHP) by utilities and manufacturers could easily lead to sales and service contracts worth over £1.5bn per annum (€2.2bn) across Europe by 2010, says technology specialist Cambridge Consultants Ltd (CCL). Utilities could also see additional profitability of £140m (€208m) per annum, based on a figure of 10% electricity generated by CHP.

Combined heat and power units have been installed successfully in commercial and industrial environments, but the greatest area for profitability is in replacement of domestic boilers and installations in new build projects. However, the cost issue is seen as critical to encouraging consumers to adopt micro CHP when replacing or upgrading boiler systems.

"Micro CHP not only addresses the energy efficiency goals of consumers and governments, but offers the possibility to develop a new kind of business model selling heat and power instead of gas and electricity, that can help energy suppliers succeed in today’s liberalised markets. With over five million domestic boilers sold every year throughout Europe, micro CHP is a mass volume business opportunity that simply cannot be ignored," says Ian Halliday-Pegg of Cambridge Consultants.

He continued, "It is clear that micro-CHP will shake up the home energy market, but there are still fundamental questions which need to be addressed, and much development and cost reduction is required to transform promising technology into viable products and services for the mass market. Market penetration will only be possible when the systems are at a cost the market can bear."

The challenges faced are many, including selecting the right technology for the environment in which the unit is to be placed; control of the unit itself and of a network of units to ensure optimal performance, and that the units have the facility to be controlled and diagnosed remotely enabling them to be run as a virtual power plant; designing the unit for minimum cost, not just the core technology itself, but the entire system.

CCL created an energy practice last year to help utilities companies bring products to market successfully, bringing together skills already utilised successfully in other parts of the business, including: systems dynamic modelling, model-based control, low cost sensing, responsive and efficient thermo-chemical systems, design for mass production, and low cost power electronics and speed controlled motors.

One of the main benefits to utility companies in adopting micro CHP is an increase in customer retention – the utility company will own the CHP unit so the householder will be tied to that particular supplier. Benefits felt more on a national and economic scale will include fewer power shortages/blackouts, reduced imports of power and lower emissions, which falls into line with the government’s targets for emissions and world-wide pressure for a reduction in greenhouse gasses. The householder will see a benefit in the cost savings generated and feel they are doing their bit for the environment too. With pressure on the individual to start leading a ‘greener’ lifestyle, the implementation of micro-scale CHP will make a significant contribution.

Notes for editors
Cambridge Consultants Limited (CCL) designs and develops innovative new products, processes and systems. CCL enables clients to turn business opportunities into commercial successes, whether launching first-to-market products, or expanding existing markets through the introduction of new technologies.

With a team of over 200 engineers and scientists, CCL is able to offer solutions across a diverse range of industries including healthcare, wireless communications, industrial and consumer products, automotive and transport.

What is CHP?
CHP (combined heat and power) is a very efficient technology for generating electricity and heat simultaneously, by using conventional generation technologies, fuel cells or ‘stirling’ engines within a CHP ‘plant’. The heat generated in the process is utilised via heat recovery equipment for a variety of purposes including: industrial processes, community heating and space heating, or as described above, in the domestic environment.

Due to the utilisation of heat from electricity generation and the avoidance of transmission losses because electricity is generated on site, CHP typically achieves a 35 per cent reduction in primary energy usage compared with power stations and heat only boilers.1

Domestic or micro CHP systems can be installed in place of standard domestic boilers. A domestic CHP system not only provides heat for the home, but also a proportion of the electricity in the same process. Domestic systems have the potential to be as much as 90% energy efficient, reducing the energy bill for the home and reducing carbon dioxide emissions per household, helping the government toward achieving the targeted reductions under the Kyoto agreement. Excess electricity produced when heating the home in the morning has the potential to be fed back into the grid.

Ref:
1 Source – Combined Heat and Power Association (www.chpa.org)