Reaction to FIT Consultation
10 February 2012
Ceres Power Holdings plc
("Ceres", "Ceres Power", or "the Company")
UK Government Raises Feed in Tariff to "Jumpstart" micro-CHP
Ceres Power today welcomes the proposal by UK Government to increase the feed in tariff ("FIT") for small scale combined heat and power ("micro-CHP") technology, including the Company's own fuel cell micro-CHP product.
The new FIT is part of a package of measures published in the Feed in Tariff Consultation Phase 2B (1) by the UK Department for Energy and Climate Change (DECC). The proposed tariff increase is to 12.5p per kWh generated, from the current level of 10.5p. This will raise the annual income for homes installing micro-CHP, and is intended to accelerate consumer adoption of this technology. For a typical UK home with a Ceres micro-CHP unit (2), it is predicted that the annual FIT will go up from £350 to £436, on top of the predicted annual energy cost savings of £286.
Today's announcement follows comments in the House of Commons on 1st February 2012 by Greg Barker, Minister of State for Climate Change (3), in which he signalled his intent to use policy measures such as the FIT to "jumpstart" micro-CHP, and indicated that he shared the ambition for 1 million micro-CHP units installed in the UK by 2020. The technology, he indicated, has the potential to be "an attractive, price-competitive alternative to taking electricity from the grid or installing a conventional boiler".
The Ceres micro-CHP unit is designed to easily replace an existing wall mounted gas boiler and is compatible with the majority of UK houses. In the Minister's words, "there are very few homes that couldn't benefit from micro-CHP". The Ceres product can address both the new install and the retrofit segments of the UK boiler market, which together represent over 1.5 million units each year (4). The Company's partnership with British Gas, both the largest residential energy supplier and the largest installer of domestic central heating and gas appliances in Britain, further strengthens this market access.
Although the Minister said that he "anticipated a long-term future for the feed in tariff for micro-CHP", he also stated that he would use additional policy support if needed to stimulate mass market uptake. Future measures may include modification of Building Regulations to require higher minimum efficiency standards that could be met with micro-CHP technology. This could mirror the change to regulations in 2005 that effectively made the installation of condensing boilers mandatory overnight, superseding the existing technology.
The Minister acknowledged the importance of the flexibility provided by specific micro-CHP technologies with low heat-to-power ratios and the ability to be turned on and off, which help when balancing the electricity system. He indicated that these technologies are particularly exciting and will fit in well with the more electrified economy of the future. Ceres fuel cell technology can withstand many power cycles, can be rapidly turned up and down as needed, and has a very low heat-to-power ratio allowing operation all year round.
David Pummell, Chief Executive Officer, commented:
"The change to the FIT and the Government's support for mass market uptake of micro-CHP represent a fundamental shift in strategic UK residential energy policy. They reinforce the future importance of micro-CHP as a cost effective solution that can meet the requirements of a significant proportion of the UK's homes. I especially welcome the Minister's commitment to helping micro-CHP deliver significant residential emissions reductions in the UK over the long term. The Ceres micro-CHP product is ideally placed to meet the demanding UK requirements of wall mountability, low price and high performance and these policy changes will help accelerate customer uptake."
Phil Bentley, Managing Director British Gas, commented:
"This is a positive announcement by the Government. It will support British industry in this sector and stimulate growth in skilled jobs. British Gas believes the Ceres micro CHP product has the potential to transform the domestic central heating market in the UK, enabling our customers to generate cheap, reliable & low-carbon electricity in their own homes."
Notes:
1. The DECC consultation document can be found at:
http://www.decc.gov.uk/assets/decc/Consultations/fits-review/4311-feed-in-tariff-scheme-phase-2b-consultation-docume.pdf
2. Baseline figures as disclosed in the presentation accompanying the Company's CHP demonstration, site visit and preliminary results for the year ended 30th June 2010, published on 29th September 2010, and available at: http://www.cerespower.com/store/files/200-Results%20Presentation%20V30%2029%209%2010%20for%20web%20FINAL.pdf The House of Commons adjournment debate on micro-CHP on 1st February 2012 can be found at: http://www.parliamentlive.tv/Main/Player.aspx?meetingId=9929&st=11:00:28
3. Data from BSRIA, http://www.bsria.co.uk
For further information contact:
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Ceres Power Holdings plc |
Tel. +44 (0)1403 273 463 |
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David Pummell, Chief Executive Officer |
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Rex Vevers, Finance Director |
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Investec Securities Limited |
Tel. +44 (0)20 7071 4304 |
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Chris Sim/James Ireland |
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Kreab Gavin Anderson & Company |
Tel. +44 (0)20 7074 1800 |
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Ken Cronin/Deborah Walter |
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Notes to editors:
Ceres Power is a leading developer of clean, efficient, cost-effective decentralised energy products that reduce operating costs, lower CO2 emissions and improve energy security. These products use the Company's mass manufacture platform, the Fuel Cell Module, based on the Company's unique patented solid oxide fuel cell ('SOFC') technology and operating on mains natural gas or packaged fuels, such as LPG.
The Ceres Power fuel cell Combined Heat and Power ('CHP') product operates on mains natural gas and generates all of the heating and hot water and the majority of the electricity needs of a typical UK home. The wall-mounted unit is designed to replace a conventional central heating boiler and uses the same gas, water and electricity connections. With its low heat-to-power ratio and unique load-following ability, a Ceres Power CHP product can operate all year round thereby maximizing the energy savings for the household and cutting carbon emissions.
Significant market opportunities exist for the Group's residential CHP products globally including Europe, Asia and North America. New product and market opportunities also exist in the longer term including remote industrial power and auxiliary power for transport applications.
This information is provided by RNS
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