This agreement is the first in the world of a number of commercial deals with industry being pursued by CFCL. The field trial follows on from 12 years of research and development and $130 million of investment, according to CFCL.

CFCL’s product for this trial is a fuel cell unit which converts natural gas to electricity delivering 1kW of electricity and hot water sufficient for the average home.

Powerco chief executive Steven Boulton said this particular fuel cell technology has the flexibility to use natural gas, biomethane and ethanol as the primary input fuel, rather than being constrained with expensive hydrogen, as was the case with most fuel cells.

“This technology shows the potential of distributed generation around the world – electricity generated at the point of use rather than through centralised systems and extensive transmission networks,” Boulton said.

“This is the kind of innovation and technology that Powerco is increasingly looking to support and introduce to New Zealand. These fuel cells could play a key role in reducing our demand for energy and in meeting our international environmental obligations. We see a real opportunity for New Zealand to lead the world and to secure its energy future by embracing this type of new technology.”

Powerco would also establish a New Zealand-based university scholarship to evaluate the trial of the fuel cells, Boulton said.

CFCL chief executive Dr Allen Conduit said his company was also pursuing further field trials in Australia and Europe.

“This field trial program forms a central plank in our business strategy, along with our planned admission to the Alternative Investment Market of the London Stock Exchange and negotiation of manufacturing and appliance partnerships in Europe,” he said.

“Our micro-CHP units are expected to be extremely efficient. They convert gas to electricity in a silent process, unlike combustion engines, and can reduce greenhouse gas emissions by 60 per cent over a conventional coal fired power station.

Conduit said the fuel cell units could provide efficient, reliable, constant and environmentally friendly ‘mini-generators’ on site in homes, offices and farms, reducing reliance on large, centralised electricity generators and transmission networks. They could also be scaled up to suit a range of power outputs.

“When not using the full electrical output from the unit locally, power can be exported and sold back into the electricity grid,” he said.

At this stage Powerco and CFCL have committed to two 12 month New Zealand field trials for 2005, with the option to expand to four. CFCL has engaged New Zealand IRL (Industrial Research Limited) to assist with on site technical support.

CFCL expects to deliver the first unit to New Zealand in April 2005.