Fuel cells a tough sell in a coal-fired economy  

The Age has an article on cogeneration / fuel cell company Ceramic Fuel Cells (an area attracting much attention in the wake of the unveiling of the Bloom Box) - Fuel cells a tough sell in a coal-fired economy .

IF YOU are flicking on a light switch in Melbourne today, there is a 96 per cent chance you are buying electricity generated more than 100 kilometres away, beneath a Latrobe Valley smokestack.

It is a cheap way to set up an electricity system, but hugely inefficient.

An estimated 75 per cent of the energy generated at Hazelwood and Yallourn is lost as heat or used onsite. Another 5 per cent is lost during transmission and distribution. It means only about 20 per cent of the energy ends up making the distance.

The electrons firing your bulb are also environmentally unfriendly, coming from decades-old technology that burns brown coal, the most greenhouse gas intensive major power source.

The replacement for this ''dirty'' power in coming years may not be what most expect - initially large-scale gas plants supplemented by wind farms, with solar thermal and geothermal hopefully to follow. It could also come from a box about the size of a small washing machine that sits down the side of your house.

This, at least, is the line of Ceramic Fuel Cells, the company behind the solid oxide fuel cell technology known as BlueGen. Based in Noble Park, it is said to produce enough power in a year to run a standard home more than twice over.

BlueGen creates electricity and heat by passing natural gas over ceramic fuel cells. According to Ceramic Fuel Cells managing director Brendan Dow it is 85 per cent efficient and cuts the average home's annual carbon dioxide emissions by 18 tonnes.

''At the moment they are about $25,000 to $30,000 installed but I predict within the next three to four years they should be $10,000,'' Dow says.

''But this is misleading, really. They will be like a mobile phone, where you don't pay for the handset, you just pay for the contract. Here, you won't pay for the BlueGen unit, just for the gas.''

It is a big call. Just 30 BlueGen units have been sold to date - and just four in Australia. The majority of sales have been in Germany, which is better prepared for decentralised electricity generation after years of the government generously promoting rooftop solar photovoltaic panels.

But Ceramic Fuel Cells is now approaching an important turning point. It expects safety approval by a Netherlands rating agency in the next three weeks, making large-scale installation much easier. It has signed deals with a handful of European companies, opened a manufacturing plant near Dusseldorf and employs 80 people in Melbourne. Premier John Brumby opened the Noble Park plant last May, and has been vocally supportive. Dow spruiks a bright future: "We will be cash-flow positive by next year. We're only planning on selling a couple of hundred this year, but the plan is to sell up to a couple of thousand next year."

The question Ceramic Fuel Cells poses for policy makers is: does an innovative low-emissions technology that emits less carbon dioxide than brown coal deserve public help to become cost-effective?

In the US, fuel cells are the flavour of the month thanks to some heavyweight support for a silicon fuel cell known as the "Bloom Box". Launched last month by California Governor Arnold Schwarzenegger, it boasts Google as its first customer and has been backed by eBay, Wal-Mart and Coc-Cola. The rhetoric at the US launch was expansive. Schwarzenegger said the fuel cell technology was "shaping the future of energy".

For the moment, Bloom and BlueGen are operating on a different scale - one fridge-sized Bloom Box unit generates enough power to run a street block and costs up to $US800,000 ($A874,300).

Ceramic Fuel Cells sees a bright future in Europe, but is less certain about a cautious Australian market still hooked on coal. It is lobbying hard to get the Victorian government to add it to a list of technologies that utilities are obligated to buy electricity from. "Not having that is why we've backed off in Australia," Dow says. "That's the single biggest hurdle to commercialisation in Australia."