The document discusses the potential for microgeneration, specifically microCHP, to contribute significantly to UK energy supply and reduce carbon emissions. It notes that microCHP technologies are nearing market readiness with field trials demonstrating energy savings and carbon reductions. However, government support for microCHP has been limited despite its potential benefits. The document calls on the government to implement appropriate support policies for microCHP in line with recommendations in the Stern Review in order to realize its potential contribution to UK energy and climate goals.

1. BAXI HEATING UK
CHP
– The Microgeneration Boom?
Ian Stares
Business Development Director – New Technologies
Baxi Heating UK
Chairman; MicroCHP Forum, CHPA
Deputy Chairman; Fuel Cell UK
Chairman; Climate Change Working Group; EIC
CHPA National Conference
16th November 2006

2. BAXI HEATING UK
Political Context for Microgeneration
• 2003:
• Energy White Paper
– Climate Change, Fuel Poverty,
Competitive Markets, Security of
Supply
• 2005:
• Building Regulations for HE
boilers
• Biomass Task Force Report
• 2006:
• Microgeneration Strategy
• Low Carbon Building
Programme
• Climate Change and
Sustainable Energy Act
• Energy Review 2006
• Stern Report; October 2006
BAXI HEATING UK
“Polices are required to support the
development of a range of low carbon
and high efficiency technologies
on an urgent timescale”
“… . policies to support the market for
early-stage technologies will be
critical”

3. BAXI HEATING UK
Energy Savings Trust Report on
Potential for
Microgeneration*
•25% of UK electricity
supply from micro
generation
o MicroCHP will be the
single biggest
contributor
o MicroCHP not
dependent on long term
subsidy or market
distortion
*November 2005; E-Connect, Element Energy, Cambridge University for EST

4. BAXI HEATING UK
Primary Energy
Input 100%
Power station
losses - 50%
Transmission
losses - 10%
Available to the home:
45% of the original
energy.
Gas
Primary Energy
Input 100%
Available to the home
>90% of the original
energy.
Gas
Centralised Power Generation
“Locally Grown” Generation;
“Prime Mover Engine” producing
electrical power and the generated
heat for space heating and hot
water for domestic requirements

5. BAXI HEATING UK
Potential UK CHP Applications
1kWe 3kWe 5kWe 10kWe
‘Micro’ ‘Mini’
Households ?
Schools ? ?
Guest House
Pub/Restaurant ?
Offices ? ? ?
TOTAL ~12M ~5M ~90K ~ 80K

6. BAXI HEATING UK
Principal Benefits for MicroCHP
( with mass market penetration)
• Consumer;
– Additional costs recovered by savings
• Electricity generation and export potential.
• A ~£100 - £125 per annum energy saving.
– Secure small, centralised energy supply in the house
• Individual taking part in a National policy
• Whole Economy;
– Potential for less demand on national grid
– Potential for less demand on power stations
– Reduction in CO2 emissions
• ~ 1 tonnes per annum per customer c.f. to the conventional
boiler
• ~ 6 million homes by 2020 ~ 5MtC carbon equivalent

7. BAXI HEATING UK
MicroCHP UK Market Forecast
• Heating & Hotwater Industry Council; September 2005
– 2010
• Mid range scenario - Realistic
• ~120,000 units
• Depending on product availability, export reward, government incentives.
– 2020
• 5.6M installed base
• 6MtC cumulative saving
• BSRIA; September 2006
– 2010
• ~ 50,000 units
• Depending on key players signing commercial deals

8. BAXI HEATING UK
Evolution of CHP Prime Mover Options-
Overview
• Internal Combustion
– ‘Here and Now’ technology
– Products on the market
• Baxi – Senertec DACHS, EC Power, ecopower
• External Combustion
– “Commercially” available
– More products available over the next few years
– Stirling engines, Rankine Cycle engines
• Baxi, Whispergen, Energetix
• Fuel Cell
– “Prototypes” on the market
– Commercially available 2012 – 2015
– Proton Exchange Membrane (PEM), Solid Oxide (SOFC)
• Baxi, CFCL, CERES Power

9. BAXI HEATING UK
Internal Combustion
ecopower
4.7kWe;12.7kWt
EC Power
4-13kWe;
17-29kWt
Honda; ECOWILL
1kWe; 3 –25 kWt
Baxi Senertec
DACHS
5.5kWe;12.5 kWt
Baxi acquired Senertec in 2002;
Over 15,000 units installed
in Europe;
Over 100 units installed in the UK;
Independent reports
“materially reduces carbon”
~5 tonnes per year
Launch in Japan in 2003;
~27,000 units installed in
Japan
Few tested in Europe;
Launch in 2008 in the UK?
Valliant
PowerPlus Technologies
Launched 1999
~1,000 units installed
in Europe
Active in the UK in 2007?
EC Power A/S owned by
Statoil A/S
EC Power UK owned by
EC Power A/S
300-500 units in Europe
20 – 30 units in the UK

10. BAXI HEATING UK
External Combustion
BG Microgen
1kWe;
15kWt-36kWt
Whispergen
1kWe;
8kWt
Disenco
3kWe;
30kWt
ENATEC
1kWe;
9kWt
Microgen Energy Ltd, BG Group
Microgen/Baxi deal announced in 2006
Baxi bring to market a Stirling engine based
wall mounted microCHP in 2008;
Demonstrated savings and low carbon
Controlled Prototype trials are underway
Large scales trials planned
for 2007
E.ON UK /Powergen
limited commercial launch in 2004
40 units on trial showing good results
in target market >20,000 kWh thermal
1.1 -1.5 tonnes carbons savings
~£150 savings per year
~ 3 – 4 year payback.
Commercial deal announced
with Magic Boiler, Netherlands
ENATEC/ Rinnai and Infinia Corp;
Floor standing design free piston
Stirling engine
Trials in Netherlands showing results
0.7 – 1.0 tonnes CO2
Market introduction in Japan; 2007
Market introduction in Europe 2008
with a boiler manufacturer, MTS Group
Disenco floated on the
Toronto Stock Exchange in 2006;
“Home Power Plant” floor standing design
field trial unit obtained GAD approval
in June 2006;
The unit is in the Carbon trust field trials
and a further five units are planned in 2007.
Commercial launch in 2008

11. BAXI HEATING UK
External Combustion
Cogen Microsystems
2.5kWe; 11kWt – 22kWt
Rankine Cycle;
17% electrical efficiency
90% plus overall efficiency
Energetix Group;
1kWe Genlec module integrate with
a boiler to give a microCHP unit
Energetix founded in 1997
Originated in BNFL plc;
AIM flotation of two
Companies in Aug 2006
raised £6M;
Organic Rankine Cycle
Wall mounted design
Australian Company
Negotiating with several Italian
Manufacturers including a major
boiler manufacturer for the
European market
in the near future

12. BAXI HEATING UK
Fuel Cell
Valliant AG
PEM; 4.6kWe
Viessman
PEM;2kWe
Baxi /european fuel cells
PEM; 1.5kWe; 18kWt
Baxi acquired efc in 2002
€30m on technology
development to date;
10 beta units installed
in Germany;
1 beta unit installed in a “real”
house in the UK
Market ready 2010
Substantial “closed” field trials
In Germany.
Partnership with ZSW
Over thirty field trials with
the 4.6kWe in Germany
and working with Plug Power.
Partnerships with Webasto for
solid oxide fuel cell for
lower rated units

13. BAXI HEATING UK
Fuel Cell
Ceramic Fuel Cells (Europe) Ltd
Solid Oxide; 1Kwe
CERES Power:
Intermediate Solid Oxide;
ASX Listing July 2004
Raised $25m
AIM Listing March 2006
Raised £37m
A$160m on technology development
4 early units on demonstration
10 NetGen units sold to EWE
20 tonne powder plant to be
installed in the UK Jan 2007
Founded in 2001 from
Imperial College
Private funding raised £10m
AIM listing raised additional £15m in 2004
Market capitalisation ~£140m
£2.7m programme with Centrica (with DTI)
Wall mounted CHP design
Operation proven on NG,LPG and Hydrogen
UK Focus with expansions plans

14. BAXI HEATING UK
Government Developments
• The Government has implemented a number of measures in support of
microgeneration i.e.
– Low Carbon Buildings Programme
– Climate Change and Sustainable Energy Act…
• …but very limited support of microCHP even though:
– economic case & low carbon credentials has been demonstrated
• MicroCHP has been included in the Low Carbon Building Programme
Phase 1
• …… but no accreditation process in place but other technologies have
transferred accreditation from Clear Skies & absorbed all the money in
Phase 1
Why is MicroCHP not included in Phase 2 ?

15. BAXI HEATING UK
Summary
• “Responsible” manufacturers are investing in microCHP.
• Investor community interested and see potential of
microCHP
• MicroCHP technologies are near market ready with routes
to market being devised.
• MicroCHP is showing results in terms of carbon mitigation
and energy savings in the real world
• Government needs to:
– implement appropriate support measures for micro
CHP commensurate with potential benefits in
accordance with the Stern review.
– Give positive commitment and messages
• Important contribution to the future energy mix of the UK.
• Helps in achieving national energy and environmental
objectives

16. BAXI HEATING UK
CHP
– The Microgeneration Boom?
Thank you for your attention