Ceramic Fuel Cells Regulatory News (CFU)

27 Feb 2008 07:01

Ceramic Fuel Cells Limited27 February 2008 27 February 2008 CERAMIC FUEL CELLS LTD €12.4m INVESTMENT IN MANUFACTURING FACILITY AND COMMERCIAL ORDER FROM NUON Ceramic Fuel Cells Ltd (CFCL), a global leader in fuel cell development, todayannounces that it is investing €12.4 million in the construction of amanufacturing plant in Heinsberg, Germany for the commercial production of itsfuel cell systems. CFCL also announces that it has received a volume order from Nuon, TheNetherlands' largest energy company and CFCL's partner for that market. CFCL andNuon have agreed on set of performance targets for a commercial unit. On CFCL'sachievement of these targets, Nuon will order 50,000 fuel cell systems, to bedelivered over a five year period from June 2009. The order is expected togenerate substantial revenue for CFCL over the five years. CFCL's fuel cell systems will be integrated into conventional boilers for use inthe low carbon emission heating and power market. These new generation, highlyefficient fuel cell boilers, known as micro-combined heat and power (mCHP)units, will be deployed by Nuon for its residential customers to generate bothelectricity and heating in their homes. CFCL will assemble its fuel cell systems at its Heinsberg facility in automatedand semi-automated production lines in a staged scale-up operation. Initialcapacity will be 10,000 units per year, enough to fulfil the Nuon order. PhaseII of the project will see an increase in capacity to 160,000 stacks per yearwithin the existing building. The total cost to CFCL of phase I of themanufacturing project, including all plant and equipment and commissioning, willbe €12.4 million, significantly below previous expectations. Volume productionis expected to commence from June 2009. In a further technical breakthrough, CFCL's advances in power density haveenabled the Company to increase the output from each of its fuel cell stacks to2kW of electricity at minimal additional balance of plant cost. Thissignificantly reduces the unit's cost per kW and increases the unit's CO2savings. A 2kW unit provides ample power for the average household's annual"base-load" requirements, as well as additional power for export to the grid. A2kW unit can save up to three tonnes of carbon dioxide per year compared toexisting electricity generation. CFCL has frozen the design of its fuel cellstack and manufacturing processes for the Heinsberg plant. Brendan Dow, Managing Director of CFCL, commented: "Increasing energy prices and the global response to climate change arecontributing to an urgency for the introduction of efficient and clean energygeneration. CFCL is well placed to benefit from these forces. "In the past 12 months, we have worked rigorously to achieve a plant design thatwill meet our needs both now and in the future. We have engaged a highlyexperienced project management team to supervise the plant's construction in atimeframe that ties in with our plans for first commercial production. TheHeinsberg plant, together with our UK powder plant and recently announced longterm supply agreements with H.C. Starck and CeramTec, are all part of ourco-ordinated strategy to scale up to volume manufacturing, whilst minimisingrisk and capital costs. "Nuon is supporting our product development through their order for our entirephase one production capacity. We look forward to continuing to developcommercial products with our utility customers and appliance partners in Europeand Japan. With these developments we are well on track to significantlyincrease our revenue generation from the second half of 2009." Kjartan Skaugvoll, Managing Director, Nuon Retail, said: "Energy efficiency is a top priority for our customers. The cooperation withCFCL provides us with great opportunities to help our customers take the nextstep in reducing their energy bills and limiting emissions. Fuel cell technologywill be an integral part of our future portfolio of products and services asdecentralised generation becomes part of our business model." Ends Managing Director Brendan Dow discusses the Heinsberg project and cooperationwith Nuon on a Boardroomradio webcast - for access go to www.brr.com.au/cfu. CFCL will also host an Open Day for UK analysts at its powder plant and officesin Bromborough, Merseyside, on Friday 29 February 2008. For details pleasecontact Vicky Watkins at Hogarth on +44 (0) 20 7357 9477. For further information please contact: Ceramic Fuel CellsAndrew Neilson Tel: +61 419 950 771 Email: investor@cfcl.com.au Hogarth Partnership (PR for CFCL) Tel: +44 (0) 20 7357 9477Sarah MacLeod / Sarah Richardson / Vicky Watkins Libertas Capital (NOMAD for CFCL) Tel: +44 (0) 20 7569 9650Aamir Quraishi / Andrew Hardy Notes to Editors Manufacturing plant CFCL first announced plans to construct a volume manufacturing facility inHeinsberg in December 2006 with the aid of a grant from the NorthRhine-Westphalian Government for the whole project of up to €3.2 million. During2007, Nuon, which owns and manages the industrial park, spent €400,000 onrefurbishing the site in preparation for its re-development. Work on the manufacturing facility has begun this week in a staged scale-upoperation. Phase I will involve the building of a semi-automated production linecapable of producing 10,000 fuel cell systems per annum. Phase II will involvethe installation of additional fully automated production lines designed toproduce up to 160,000 units per year, within the existing building leased byCFCL. CFCL intends to fund this expansion using both existing cash resources anddebt facilities and the Company is currently in discussions with financialinstitutions. CFCL also retains an option to acquire a 'greenfield' site at theindustrial park for a third phase production expansion. Product development agreement for the Benelux market In July 2007, CFCL formed an agreement with Nuon NV, Remeha BV and De DietrichThermique to jointly develop a fully integrated mCHP unit for the residentialmarket across The Netherlands and Belgium. As part of that partnership, theparties agreed a set of specific targets for the commercial mCHP unit whichencompass physical weight and size, power and heat output, efficiency, lifetime,CO2 savings and selling price. On the basis that these targets are met, Nuonwill purchase 10,000 units per year for five years commencing from the finalcommissioning of CFCL's fuel cell manufacturing facility, on schedule for June2009. CFCL's fuel cell systems and mCHP units In line with the Company's strategy, CFCL has recently announced that it willoutsource the manufacture of its fuel cell 'power chips', one of the componentsof CFCL's fuel cell system, to leading ceramics manufacturers H.C. Starck andCeramTec. Both companies have entered long term contracts to supply CFCL withfuel cells made at their manufacturing facilities in Germany. CFCL will supplyhigh quality ceramic powder from it's own plant in Merseyside, UK. CFCL will assemble the fuel cell stacks and other core components at itsHeinsberg facility to produce complete fuel cell modules for delivery to CFCL'sappliance partners in Europe and Japan for integration into conventional hotwater boilers. The resulting mCHP product will look just like a conventional high-efficiencyboiler, however, as well as generating heat and hot water, it will also generatemore than enough power to meet an average household's annual energy needs. Thismeans more efficient use of natural gas resources while CO2 emissions are up to35% lower than from a gas-fired power station and up to 60% lower than from aconventional coal-fired power station. The fuel-cell boiler will be easy to install as it uses the same pipes asexisting high-efficiency boilers. Since January 2006 CFCL has installed and operated field trial units inAustralia, New Zealand and Germany. CFCL is now developing fully integrated mCHPunits with leading utility customers and appliance partners in five key markets: •Gaz de France and De Dietrich Thermique in France; •EWE and Bruns Heiztechnik in Germany; •E.ON UK and Gledhill Water Storage Ltd in the UK; •Nuon and Remeha Group in Holland; and •Paloma in Japan. About CFCL Ceramic Fuel Cells Limited is a world leader in developing solid oxide fuel cell(SOFC) technology which can provide reliable, energy efficient, high-quality,and low-emission electricity from widely available natural gas and renewablefuels. CFCL is developing SOFC products for small-scale on-site micro combinedheat and power (m-CHP) and distributed generation units that co-generateelectricity and heat for domestic use. CFCL is developing m-CHP products with leading appliance partners and utilitycustomers in Germany, France, the United Kingdom, Holland, and Japan. CFCL is listed on the London Stock Exchange AIM market and the AustralianSecurities Exchange (code CFU). www.cfcl.com.au This information is provided by RNS The company news service from the London Stock Exchange