CHP (combined heat and power) systems are mostly used to supply domestic heating and electricity. CFCL’s fuel cell powered micro-CHP unit uses natural gas to provide 1kW of electricity and 1kW of heat, enough for a family of four.

With a demonstration model commissioned for the lucrative UK and European market, CFCL will benefit from UK legislation to cut the VAT (UK equivalent of GST) on micro-CHP systems from 17.5% to 5% to encourage its use ahead of environmentally unfriendly technologies.

CFCL believes its micro-CHP system will provide significant fuel conversion efficiency and up to 60% carbon dioxide emission reduction over conventional coal-fired systems.

The environmental benefits of micro-CHP systems have spurred the UK Government to assist in their widespread introduction, establishing targets for the number of units installed, the amount of energy generated and the greenhouse gas reductions produced by installing micro-CHP units in buildings across the UK by 2010.

“The UK Government is so concerned to speed the uptake and beneficial features of micro-CHP that it is now proposing specific policies, incentives and programs for these low carbon and efficient systems, separate to those for renewables,” said CFCL executive chair Julian Dinsdale.

“This is excellent news for CFCL and verifies our strategy to target the growing UK and European micro-CHP market.

"Micro-CHP systems that produce both heat and electrical power for residential and office use are recognised as more fuel efficient generation systems than current centralised coal-fired power stations. Further benefits are lower greenhouse gas emissions, and the fact they reduce reliance upon stressed network and distribution systems while generating electricity for use on-site or sale back to the grid.”