Andrew Neilson - May 2010
Andrew is a member of Board of Advisors of Climate Alliance Limited, and Company Secretary Ceramic Fuel Cells (ASX Code CFU)

It is now well recognised that the world’s energy system requires a transformation.  Most energy in developed countries is dedicated to the production of electricity. Electricity use in Australia is rising, particularly during the summer peak demand for domestic air conditioners. The monopoly electricity network companies are spending billions to upgrade ageing infrastructure, which is passed on to the consumer through increased power bills.  

And yet the majority of Australians believe that Australia must cut its greenhouse gas emissions, especially from power generation.

In the developed world, the problem is worst in Australia, which burns coal to generate most of its electricity.  These generators have an efficiency of less than 30 percent.  By the time the power gets to where it is used, the efficiency has dropped to less than 25 percent, meaning three quarters of the energy has been wasted.  (You are sooo generous!)

Burning coal is the most polluting way of generating electricity.  Australia’s per capita carbon emissions are the highest in the world – about 23 tonnes per person, per year. 

The current model of building large, inefficient power stations, a long way from where the power is needed, is no longer good enough.  We need new thinking to transform our energy systems. 

Just as mainframe computers gave way to personal computers, the energy system is moving from a ‘centralised’ model towards a ‘distributed’ or ‘embedded’ model, where thousands of mini power stations are installed in homes and other buildings, just where the power is needed. 

Renewable energy such as solar, wave, wind and geothermal are absolutely necessary but cannot provide sufficiently intense power and heat to meet the rising demand..

Fuel cells using natural gas can provide low emission baseload power, with significant benefits to the environment and the energy network – and significant cost savings.  Ceramic Fuel Cells Limited, based in Melbourne, has launched a gas to electricity generator called “BlueGen”.  The unit operates constantly, all-year round - complementing solar and wind which are intermittent and not controllable.  One BlueGen unit, operating constantly at 1.5KW will generate about 12,000 Kilowatt hours of electricity per year – twice the annual requirement of the average home in Victoria.  The excess is sold back to the grid.  BlueGen also makes enough heat for provide 200 litres of hot water per day – enough for the average family home. 

About the size of a home dishwasher, BlueGen units can be installed without additional infrastructure costs and realise significant environmental benefits. 

A home with a BlueGen unit can actually offset more carbon than a home with a typical solar PV system.  For example, in Sydney a 2kW solar PV system will generate about 3,500 kilowatt hours of electricity per year and offset about 3.7 tonnes of carbon.  A BlueGen unit in the same house could generate more than 12,000 kilowatt hours of electricity and save about 9 tonnes of carbon per year.  Even though the BlueGen uses natural gas, the carbon savings are much higher because over the year, it provides all the power the home needs - and more.  As is the case with PV solar cells, a home with a solar PV unit still relies on higher emission grid power. 

Ceramic Fuel Cells has received orders for BlueGen units from leading energy companies and other foundation customers in Europe, Japan and Australia.  Many large markets provide incentives for these units to be installed – including Germany, France, UK, USA, Japan and Korea.  No incentives are currently available in Australia. 

To achieve the world’s carbon reduction goals requires open thinking: a product using natural gas – with very high efficiency – can supplement renewable generation to reduce carbon emissions, quickly and cheaply.