Periodic Reporting for period 1 - HighPower (High Efficiency Distributed Power Plant)
Reporting period: 2015-02-01 to 2015-07-31
Based on market studies, fuel cell technologies have a significant market opportunity. Fuel cells can significantly increase efficiency of power generation and reduce environmental impact associated to it –locally and globally. Highly efficient fuel cells alleviate dependency on fossil fuels by reducing primary energy consumption and by opening up new opportunities for efficient utilization of biogas as a renewable source of energy. Fuel cell technology provides means for reducing several negative environmental and health effects of power generation compared to conventional technologies. Additionally, fuel cells and distributed power systems architecture positively impact businesses by securing supply of energy, by assisting in reaching emission abatement targets and by benefiting local economies as well as Europe as a growing clean tech industry.
The feasibility study concludes that Convion is well positioned to take advantage of the business opportunity. The innovative Convion power plant will enable to reach extremely high energy efficiency at minimal environmental impact, provide uninterrupted power supply for data centers, hospitals, etc. and reduce European dependency on fossil fuels. Convion´s 50-300 kW power plants can provide solutions for low-carbon distributed power generation based on natural gas, biofuels and hydrogen both for commercial and industrial segments.
In February 2015 Convion achieved a major milestone when manufacturing of the C50 prototype was finalized and product validation was started. Over 3000 running hours of a C50 prototype, Convion has proven that the unique innovations embedded in the C50 product are functioning as expected. The prototype has exceeded its performance targets and proven that the product innovations and design are robust. Successful validation of the C50 prototype has proven Convion capabilities among leading providers of commercial fuel cell systems.
In the feasibility study phase, based on the conducted market surveys, Convion has formulated an updated business plan, established partnerships throughout a value chain and formulated a manufacturing plan for series manufacturing of the products. These actions will support further commercialization of Convion products and provide good basis for global market reach.
Three separate tasks do form the outcome of the feasibility study:
• Task 1: Business plan that define the best strategy for the technology commercialization. Business plan is based on the strategic objectives and in-depth market studies. The updated market study and commercialisation strategy do ensure that all relevant aspects and focus are taken into account in the SOFC power plant design and that there is an adequate market pull for the products.
• Task 2: Freedom-to-operate study and finalized IP strategy ensures that no patents are infringed in the commercialisation of the SOFC power plant. The freedom-to-operate study is conducted by Convion´s long-term patent office Leitzinger Oy.
• Task 3: Manufacturability study to lower the technology cost and prepare for mass production - As a system developer Convion´s role in the value chain involves product and components specifications, mechanical design, thermal integration and manufacturing of the product. While the manufacturing itself is outsourced to dedicated suppliers, Convion have studied study how to improve the design with the help of leading suppliers and manufacturers to reduce manufacturing costs and lead time.
See more detailed description of the activities and results in the attached Phase I Final Report Feasibility
Based on the findings decisions over the continuation towards Phase II R&D, demonstration, market replication is seen feasible and as an important step towards commercialisation. The study clearly shows the significant potential of sustainable, energy efficient and distributed power generation, which fuel cell can provide better than the competing technologies. The study also supports Convion segmentation and differentiation within the fuel cell industry. Convion is leading provider of highly efficient fuel cell products with combined heat and power capability in the selected power range. Convion holds strong IPR which improves the competitive position.
The results of the study also underlines the importance of the continued cost reduction which needed prior a wider deployment. Cost reduction can be achieved by improved design, improved supply chain integration and by increased efficiency in manufacturing. The feasibility study findings provide new information for the concept and approach how Convion should penetrate the market and utilize the growth opportunity. As supported by the business plan Convion has initiated negotiations with potential distributors on the main markets in Europe and Asia.
For further commercialization of European fuel cell product it would be highly important to establish sufficient instruments that support demonstration and early stage market deployment. Demonstration programs driven by large corporations or public entities would open new opportunities for SME companies to penetrate and grow on the market. Innovative financial instruments that provide long term financing for demonstration and commercialization would support customers decision making and open new opportunities for new products.
When successfully implemented Convion commercialization program will have direct socio-economic impact to European fuel cell industry. The stationary fuel cells provide highly efficient technology to transform today´s fossil fuels and tomorrow´s clean fuels into power and heat – with the potential to be one of the key enablers of Europe´s transition into a new energy age. As a new industry commercialization of Convion fuel cell products will create new jobs in Europe and improve competitiveness of European energy sector.