New Plymouth-based Powerco, now owned by Australian investment bank Babcock and Brown, has engaged crown research institute Independent Research Ltd to try the "fuel cell system".

Powerco has engaged research institute Independent Research to test the Ceramic Fuel Cells Limited prototype cell in order to determine its viability for commercial development. Ceramic Fuel Cells is an ASX-listed company based in Melbourne.

The gas-fuelled cell is the size of a household fridge with several hundred small ceramic plates stacked together with metal plates that heat up as gas and oxygen pass through the ceramic, creating electricity and heat.

The prototype version can supply around 1kW of power, but for it to provide electricity for a normal household output will need to reach around 7kW.

"It wouldn't be cost-effective for you to put it in your home right now and disconnect from the grid," said Powerco corporate affairs manager Neil Holdem.

If the technology can be developed to a commercial standard, a house would connect to a gas supply system and consumers would pay only for gas, not electricity. The fuel cells can also be used by remote households and businesses outside the local grid by using bottled gas.

Although uptake of the system would reduce revenue gained through electricity, it would enable companies such as Powerco to increase their domestic gas sales while cutting down on standard power generation infrastructure that produces large amounts of harmful greenhouse gas emissions.