Australian Fuel Cell Manufacturer Secures 12.4 Million Euro Order

Ceramic Fuel Cells Ltd (CFCL), a global leader in fuel cell development, today announces that it is investing €12.4 million in the construction of a manufacturing plant in Heinsberg, Germany for the commercial production of its fuel cell systems.

CFCL also announces that it has received a volume order from Nuon, The Netherlands’ largest energy company and CFCL’s partner for that market. CFCL and Nuon have agreed on a set of performance targets for a commercial unit. On CFCL’s achievement of these targets, Nuon will order 50,000 fuel cell systems, to be delivered over a five year period from June 2009. The order is expected to generate substantial revenue for CFCL over the five years.
CFCL’s fuel cell systems will be integrated into conventional boilers for use in the low carbon emission heating and power market. These new generation, highly efficient fuel cell boilers, known as micro-combined heat and power (mCHP) units, will be deployed by Nuon for its residential customers to generate both electricity and heating in their homes.

CFCL will assemble its fuel cell systems at its Heinsberg facility in automated and semi-automated production lines in a staged scale-up operation. Initial capacity will be 10,000 units per year, enough to fulfil the Nuon order. Phase II of the project will see an increase in capacity to 160,000 stacks per year within the existing building. The total cost to CFCL of phase I of the manufacturing project, including all plant and equipment and commissioning, will be €12.4 million, significantly below previous expectations. Volume production is expected to commence from June 2009.

In a further technical breakthrough, CFCL’s advances in power density have enabled the Company to increase the output from each of its fuel cell stacks to 2kW of electricity at minimal additional balance of plant cost. This significantly reduces the unit’s cost per kW and increases the unit’s CO2 savings. 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. A 2kW unit can save up to three tonnes of carbon dioxide per year compared to existing electricity generation. CFCL has frozen the design of its fuel cell stack and manufacturing processes for the Heinsberg plant.

Brendan Dow, Managing Director of CFCL, commented:

“Increasing energy prices and the global response to climate change are contributing to an urgency for the introduction of efficient and clean energy generation. CFCL is well placed to benefit from these forces.

“In the past 12 months, we have worked rigorously to achieve a plant design that will meet our needs both now and in the future. We have engaged a highly experienced project management team to supervise the plant’s construction in a timeframe that ties in with our plans for first commercial production. The Heinsberg plant, together with our UK powder plant and recently announced long term supply agreements with H.C. Starck and CeramTec, are all part of our co-ordinated strategy to scale up to volume manufacturing, whilst minimising risk and capital costs.

“Nuon is supporting our product development through their order for our entire phase one production capacity. We look forward to continuing to develop commercial products with our utility customers and appliance partners in Europe and Japan. With these developments we are well on track to significantly increase 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 with CFCL provides us with great opportunities to help our customers take the next step in reducing their energy bills and limiting emissions. Fuel cell technology will be an integral part of our future portfolio of products and services as decentralised generation becomes part of our business model."

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