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Large scale demonstration of µCHP fuel cells

The main focus of this topic is to initiate a second generation large scale demonstration of µCHP fuel cells destined for the residential and small commercial applications (0.3-5 kW); it will require further improvements of units/system concepts demonstrated in previous initiatives and build upon those results. This represents the second step of demonstration for the manufacturers (incl. all types of FC technologies) at a more advanced phase of the learning curve (i.e. ramp-up phase) which will ensure ramp-up in the range of 2.500 units in one/two-family homes (eventually small commercial applications in Europe).

The technology and system integration aspects in the <5kW part of topic 2.6 are closely linked to this topic and synergies between these topics should therefore be sought within the scope of these projects. This topic puts significant focus on the further development of the FC stack, being the main innovative element in a FC system and a prerequisite for the success and competitiveness of the European µCHP sector in future. The project scope should also address the practical functionality of the system, with the synergies from topic 2.6 including further improved and validated BoP components in terms of concept, robustness and increased lifetimes, while exploring the possibility for standardisation; the integration in Europe’s energy system with higher rates of RES (e.g. as VPP), stabilisation/standardisation of supply chains; innovative marketing and sales strategies, innovative business models, implementation of financial facilities; finally, the upgrading of already developed solutions such as monitoring, control, diagnosis, lifetime estimation should be addressed too.

The project should mainly:

  • Demonstrate in the field in the range of 2,500 µCHP units with at least 500 units or 500 kWel per manufacturer and a minimum of 3 manufacturers; these manufacturers should have been successful in first generation field-trials (successful operation of min. 250,000 kWh produced cumulated and fleet availability of at least 90% in previous field-trials for at least 100 units or 100kWel is a pre-requisite)
  • Demonstrate, evaluate and optimize new solutions and components especially at the FC stack level but also on systems levels through field tests with improved product concepts e.g. pre-serial status as compared to previous field trials, by validating next generations of product designs
  • Increase lifetime of stack and other components of BoP; each manufacturer has to double the stack lifetime during the project as compared to the state-of-art figures
  • Test and demonstration of new models, among the 2500 units, which should minimize installation efforts and installation failures
  • Increase robustness of fuel cell system to achieve availability of at least 99% in the fleet to be demonstrated
  • Test and demonstration of remote control models with regards of grid stability support of Virtual Fuel Cell Power Plants as part of Europe’s future renewable energy system
  • Establish a demonstration/commercialisation pathway for European SMEs innovating in the development, manufacture and supply chain of fuel cell µCHP components
  • Verification of heat and power contracting business models for applicable markets by the manufacturers present in the project
  • Specifically identify further installation sites as base for large scale deployment; Establish a “technical label” assuring the financial viability for system installation for further installation sites
  • Establish the basis and further develop, if possible marketing and sales strategies of European µCHP manufacturers; qualify to open the access to conventional financing for customers, be it private households, utilities or other kinds; proven solid business model in practical manner for a significant number of systems providing pathways to allow full commercial deployment
  • Increase awareness in European markets for µCHP fuel cells

It is expected that the applicants in the consortium will have significant experience of manufacturing, installing and testing fuel cell µCHP units; participating manufacturers have to present a clear strategy on how to grow their installed base, this demonstration presenting a stepping stone for growth beyond. This strategy needs to be in line with the corporation’s strategic targets and is expected to be part of bigger additional activities plan. Marketing, sales and deployment plans need to be approved on strategic level of the company, i.e. by senior executive management of the sales and after-sales organisation of the manufacturer. Each manufacturer has to show recent value created in a European member state in at least 3 EU member states, e.g. by creation and protection of jobs in Europe, strengthening of existing or establishment of new competitive key suppliers for the FCH industry.

The project will also demonstrate through field applications the advantages of innovative technologies (hardware or software) including, but not limited to, monitoring, control, diagnosis, lifetime estimation, new BoP components. Furthermore, any methodology that may improve the knowledge and the quantification of those processes causing lifetime and performance reduction may be considered as a valuable solution to be tested and demonstrated in the field. The project will implement each solution on a limited scale basis for the purpose of demonstrating their feasibility and the advantages brought to the on-board application.

The project is linked with topic FCH.02.6-2015 (Development of cost effective manufacturing technologies for key components or fuel cell systems) to enable demonstration in the field of new developed components and manufacturing processes. Data gained in the project should be fed into the HIAD database.

The project is encouraged to look for additional/complimentary funding from regional or National funding bodies which should result in demonstration of additional number of units, up to the necessary total number of units for this second generation stage (about 10.000 units, according to the Roland Berger Study, before starting the deployment phase).

According to COM(2015) 80 final, 25/02/2015 on the Energy Union Package, the vision of the Energy Union is a sustainable, low-carbon and climate-friendly economy that is designed to last; the vision is of strong, innovative and competitive European companies that develop the industrial products and technology needed to deliver energy efficiency and low carbon technologies inside and outside Europe (the European Council set in October 2014 an indicative target at the EU level of at least 27% for improving energy efficiency in 2030, and the agreement on the 2030 climate and energy framework has defined the EU commitment of an at least 40% domestic reduction in greenhouse gas emissions compared to 1990); most importantly, the vision is of an Energy Union with citizens at its core, where citizens take ownership of the energy transition, benefit from new technologies to reduce their bills, participate actively in the market, and where vulnerable consumers are protected (e.g. facilitating the participation of consumers in the energy transition through smart grids, smart home appliances, smart cities, and home automation systems).

It is in this context necessary to fundamentally rethink energy efficiency and treat it as an energy source in its own right, representing the value of energy saved. As part of the market design review, the Commission will ensure that energy efficiency and demand side response can compete on equal terms with generation capacity, in particular in the transport and buildings sector.

All above Energy Union main challenges (especially those on energy efficiency and emissions targets) can be partially addressed by the distributed Combined Heat and Power, CHP technology, in particular micro-CHP based on fuel cells technology (for residential applications area)[[Advancing Europe's energy systems: Stationary fuel cells in distributed generation: A study for the Fuel Cells and Hydrogen Joint Undertaking, Roland Berger, March 2015]] which can reduce CO2 emissions by more than 30% compared to the condensing boiler (normal conventional technology), while NOx emissions can be eliminated entirely; and can be more efficient than central generation due to superior technologies and avoidance of transmission losses for a potential mass-market of more than 2.5 million units annually in core European countries.

In general, the fuel cell system has the best net energy performance and can further improve its competitiveness by decreasing capital costs; however, to become economically competitive, capital costs must be reduced substantially by increasing production volumes, while improving the technology through similar learning curve: many production steps are still manually performed and learning effects from Japan cannot be adopted. Larger volumes (of at least 500 units per manufacturer) will allow for automation and bundled sourcing strategies; in addition, standardisation must increase within and across technology lines; finally, further research on how efficiency can be improved by next generation system design is needed (increase of electrical efficiency to 65% and total efficiency to 95-99%) and further optimisation of running modes and operating models should be done (durability increase to 15 years for the stack and up to 20 years for the entire system).

The first demonstration stage of such applications (about 50-150 units per manufacturer) has started in Europe around 2007-2008 with National initiatives on field trials and demonstration programmes (e.g. Danish µCHP-demonstration, and Callux, FuelCell@Home in Germany) and it has been continued at European scale with the projects SOFT-PACT and ene.field (after 2010), in order to first try to build a European value and supply chain, but also experiment the different routes-to-market in about 10-12 EU Member States; overall around 10 major European manufacturers have successfully demonstrated the technology readiness by installing and operating approximately approx. 1,300 systems (800 units only in Germany). It is therefore expected that the customer requirements such as very high efficiency, significant CO2-reduction and competitive operating costs could be achieved.

The second stage demonstration/field trials should also continue to demonstrate the technology at least in the main markets identified by the first demonstration/field trials, but also try to identify new markets opportunity, depending on the energy spark-spread of each region or Member State.

The project shall explicitly strengthen the European value chain in particular for the critical components such as fuel cell stack, reformers (incl. desulphurization), special heat exchangers, inverters, etc. Proposals have to explain which of these issues can be addressed by scaling up in order to strengthen European industry competiveness. This large scale demonstration will as well initiate the drive to achieving economies of scale and hence significantly reduce costs enabling further phase roll-outs/deployment stage to be funded at lower rates by Member States after 2020.

The proposals are expected to have the impacts described below:

  • The main objective of this topic is to achieve significant improvements in the technical and economic performance of the FC stack and its manufacturing:
    • Reduction of the FC stack production cost with at least 30%
    • Application of innovative production methods, demonstrated through increase of production capacity with at least 30% and an increased share of automation
    • Improving the lifetime of the stack and demonstrate the durability in relation to thermal cycling
  • The above is expected to contribute, together with progress in the system integration to a capital cost (CAPEX) reduction of at least 30% on FC system level compared to today’s average system costs, aiming at a level of less than 10.000 €/kW which can provide the right level of competiveness for large deployment phase after 2020
  • Increased system lifetime to more than 15 years and maintenance interval by new/improved components (e.g. in case of new desulphurisation component: new solutions should be found and demonstrated to provide maintenance free over lifetime, which would lower the maintenance costs, OPEX significantly and therefore improve LCOE/RoI for the customer side)
  • Contribute to significant further capital cost reduction enable to tightened start investments in European production facilities for further ramp-up in European markets
  • Reinforce European supply chain of critical key components by e.g. a higher range of common/standardised parts to be produced in Europe
  • Stimulate private investments in production lines and facilities in Europe from today’s yearly ‘hand-made’ volumes (50 – 100) to a capability of minimum yearly 1,000 systems
  • Generate cost decreases on core components potentially transferable to other product families and enabling accelerated product deployment in the commercial size FC market segment in principle
  • Explore the implementation of financial facilities that provide capital for the next step of µCHP deployment, e.g. through the European Investment Bank, market incentive schemes in addressed EU markets, etc.