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CFU - Ceramic Fuel Cells

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A different kettle of fish but as a comparison on value for a small investor compare this;
For an investment of $9,500 I am getting a 3KW solar system installed. The deal includes a contract with Country Energy to pay me 60c unit for power fed back to the grid for 6 years. With my current usage it has been calculated that the surplus power alone will return me around $3000 PA.

While it may be considered that a CFU power generator would be a proposition for a business to purchase you have to consider owning part of the company that that produces the unit as an entirely different proposition.

I see the jury is still out on a verdict for CFU.
 
The jury may well be out on where the retail price for a unit may be headed;
the Market, however, appears to have taken notice of the potential upside.

Technically, the recent trading pattern has been following a perfect double bottom setup: drop to 15c, rise to 18c resistance, drop back, and breakout on huge volume to 21c.



I took part profit at 20.5c and have already started to buy some back at lower levels. I would expect support to hold between 18 and 19c, delivering upside targets at 24, 27, and 30.5c.



For fundamental support, re-read those early reports from Germany: How many stacks does the plant in NRW produce annually? See page 7 in the last HY Report
 
Pixel,

Well done on your trading. Using the technicals is the only way to trade this, with lots of profit taking. There has been plenty of pump and dump in this stock over the years.

For fundamental support, re-read those early reports from Germany: How many stacks does the plant in NRW produce annually?
Click to expand...

There is a difference between 'design capacity' and 'stacks produced'.

I've spent a bit of time looking at all aspects of this company and the technology and come to the conclusion that many of the high hopes for the technology do not necessarily flow through to the performance of the company.
The fuel cell technology has many applications for its use in the medium termed future and eventually costs of fuel cells will be competitive with other forms of electricity generation. Those who pay the highest now, for off grid electricity use are eagerly waiting for a silent electricity generator, that can ramp up or down the electricity production quickly.

This company CFCL has not produced such a unit.

The BlueGen is a generator that uses fossil fuel and creates GHG. Certainly it is more efficient than coal-fired, but in terms of modern Gas fired turbines, and excluding the heat generated, not that much more efficient (possibly only a couple of percent). It does not fit in with the real criteria of being green (renewable). It also must be grid connected to both gas and electricity.

Any business that wants to be green, will still look at the bottom line of the different choices of being green. All the tax deductions that have been bandied about as reasons to take up the BlueGen apply to all other forms of generator as well, so no advantage here. Going green for a business can be as simple of ticking the green option for bill payment, or if something visable is required then chuck a few solar panels on the roof.

The forecast price for the units from the company themselves has changed markedly in the last 12-15 months. To start with the planned price was going to be $8,000, then a few months ago it changed to $25,000, now the actual price (and this is what was charged to Vicurban) is $45,000 for a 2 year LEASE, (with a 20% deposit up front), with the LEASE rate of $8,000 pa thereafter.

Also at present, there is no need for more off-peak power to be fed into the grid. The price a utility is prepared to pay for such power will be low and I'm sure that a utility that currently generates power from gas at ~4 c/kwh, is going to point out to the Govt that a fuel-cell that produces ~ the same amount of GHG should not be rewarded for this off-peak power production that is not needed.

There are many here who think this price will come down quickly with bulk sales, problem is how does a company with a cash burn rate of $4-6m a quarter and only $16m in the bank (as of the end of March) get to produce in bulk without orders?? The June quarter cash-flow summary is due out in the next week or so.
Because of lack of orders announced it can be easily assumed that more cash (another $4-6m??) has been used leaving only ~$10m cash by end of June.
The only conclusion I can draw is another capital raising in the next month or 2, is an absolute necessity, which means a further dilution in shareholdings. There are already over 1 billion shares on issue.

brty
 

Well brty it seems that the good business energy men in Germany are only to happy to pay such prices (or whatever ) and then install them free in peoples homes ! All the customer has to do is pay for the gas.

Sounds pretty good doesn't it ? That is the current story coming from CFU. No doubt if they sell say 10,000 of these units all will be well in the world.

I would really like to see some hard details on the article I have noted. It smells....

[
http://news.theage.com.au/breaking-...invention-ignored-locally-20100723-10nqp.html
 
Basillio,


I think you are referring to this quote from the newspaper article.....

In Germany, utility companies supply the device free of charge to households, who then pay for the natural gas they use.
Click to expand...

Of course this bit helps from B.Dow....

The big guys are spending money
Click to expand...

Sounds great, How many have they sold to the utilities that have been installed into customers homes free of charge??? I think that is what everyone would like to see.

From a utilities perspective, to buy say 10,000 of these to put in peoples homes will cost $450 million for a 2 year contract at today's advertised prices (and existing sales to Vicurban) to produce 20,000 kw, = 20Mw of electricity from gas. By enlarging an existing facility that uses gas would produce over 200Mw for that type of money.
If the utility controls the units from an external point, so that they can ramp up and down electricity generation when they need it, how does this help the homeowner if they need extra hot water and the utility has turned them off?? If the homeowner is in control, what does the utility do with all the extra power created off-peak and sent back to the grid when they don't need it??

Also from the same article is the following from Professor Bell....


As I have stated earlier, I think the technology is brilliant and has many applications, but I think it is a separate issue to what the company is doing with the technology. I think the strategy is all wrong, and this product is not the correct application of the technology.
It is now nearly 15 months since the product was launched and nearly 10 months since the factory was opened, yet sales/orders are only "nearly 50".

brty
 
It is great to see so much back and forth on CFCL

At least it means a few on here are crunching numbers and coming up with scenrios/forecastes..although some are not as bright as others.

The key point to remember here is this is all new tech.To look purely at the bald figures based on today's reality is to look at it through the wrong end of the telescope.
This is a visionary company!

Good luck to the faithfull
 
brty said:
If the homeowner is in control, what does the utility do with all the extra power created off-peak and sent back to the grid when they don't need it??
Click to expand...

Power generation is based on power draw. If individual units are producing power (injecting current into the grid @ 240V) then the demand from the power company is lower. It will never be zero. Therefore, they simply turn back the water supply (for hydro-power station), they turn down the gas supply in the furnace (for gas fired power station - or limit the steam pressure to the turbines) or they slow the coal conveyor belt (for coal fired). I doubt there will ever be a "virtual" power company which relies on individual power generators. Even at night, street lighting, heaters, hot-water units, refrigerators, freezers, city office blocks, all consume large amounts of off-peak power.

In the UK they have massive power (usage) surges at the end of popular TV programs. At the end of the show, everyone turns on a kettle for a cup of tea. It is simple things like this that cause massive peak demands on power companies which they must source from other backup power stations and even other countries.
 
Boyou,
interesting your thoughts on the telescope use; I guess every company starts off looking questionable and borderline that has a new product that hasn't been seen before, but with the questioners / doubters here I sort of agree.
they haven't actually really achieved anything yet other than build a unit that costs in reality around A$100,000 to produce, then make as many glorious ASX releases as possible...where have they given us any sold figures to work with!

Also, yeah good point with the observations on the product promise being separate to the SP, very true. Buy them reliably every 2 months at 15.5c then wait for a release and sell at 20c. quite a lot of hopeful observers waiting and watching! It could be any day in the next few months when they could announce that their plant problems is solved, full scale production is slated and the roll out begins. Thats when it gets exciting this yoyo of massive share issue and cap raisings is tiring!
good luck to the believers, it has some very strong points, but Dow must give us some concrete not jelly!
 
Conventional power plants can only operate down to a certain level before efficiency falls of a cliff or the plant simply can not operate.

For coal, this is generally in the 30 - 50% of total capacity range but there are situations, generally involving lower grade coal, where it is even higher. Coal-fired plants tend to run best at high loads, especially those using lower grade coal.

For gas it is around two thirds capacity for gas turbine plant, below which efficiency seriously falls. Ideally, these plants run close to full capacity.

For gas-fired steam turbine plant, the lower operating limit is typically around 20% for the larger units and a bit higher for the smaller ones.

For hydro, there is no real operating limt between 0 and 100% but peak efficiency tends to be around either 60% or 90% depending on the type of turbines used. At very low outputs, efficiency can be terrible and the same can happen in hydraulically integrated systems of multiple power stations when operating at very high loads where some stations will spill in order to maximise downstream output.

The above is based on actual generating plant in operation in Australia at present.

As for rapidly changing loads and peak demands, the BlueGen does zero to help cope with that other than through increased baseload generation since they are relatively inflexible in operation compared to conventional generation.
 
The problem here is we dont have all the facts or they are not available yet.
Also Australia is not yet dealing with the real world/future.
Central Europe has higher electricity costs, higher gas costs and a CO2 emissions price. Its different world to ours, but most of their issues are coming to us Aussies soon.
This puts the Europeans ahead of us, they have crunched the numbers believe me, they are not stupid, the part answer for them is fuel cells.
I have crunched the numbers too.
I will compare the efficiency of the bluegen to the nearest and best fossil fuel generation today,that being combined cycle, natural gas power station.
At best the efficiency of the gas power station manages 60%, even though this has been recorded, typically when they are up and running they manage only 50% efficiency.
When looking at the fuel cell generator alone the efficiency is 60%,
However nobody is considering the power generation on its own, its the co-generation which makes the product stand out.
In co-generation the Bluegen has efficiencies of 80%.
I will not factor in considerations for transmission loss of off site generation.

The final figure, a fuel cell based co-generation product is 60% better than the nearest rival, when it comes to fossil fuel energy conversion.

60% less fuel needed,
60% less co2, carbon footprint

Is it any wonder the world is excited about this.?
Fuel cells are not the all and everything, just part of the electricity supply mix,
of which there are many.

On the subject of what to do with Off peak power,
What you do is encourage people to use it, first you install a smart meter,
then you hike up the price of peak use power, sounds easy because it is.
If and when we get electric cars they will be charged over night.

Whether or not CFU is a good investment, I dont know,
What they have, what they are doing is right though.
 
Frank,

Nobody is arguing that the technology is not efficient. However there are still some issues to be dealt with. The current operating BlueGen unit at aurora is operating at 58% efficiency over the first month of operation. The fuel cell stack will be replaced after 2 years as part of the lease contract. The reason it will be replaced is that the fuel cell degrades over time. A couple of years ago there was evidence that the fuel cell degrades at about 1% per couple of thousand hours, hence why they will replace the fuel cell stack in such a short time. The answer I received from the sales people about replacing the stacks was that they just didn't know how long they would last.

So you are correct...

The problem here is we dont have all the facts or they are not available yet
Click to expand...



What I'm arguing is that the strategy of the company with this technology is not likely to reap huge results for shareholders.
If you just look at the economics of what we do know, the current prices charged for the units do not make sense. This is probably the reason why the company has not been swamped with orders.

What you do is encourage people to use it, first you install a smart meter,
then you hike up the price of peak use power, sounds easy because it is.
Click to expand...

Problem is, that favors solar power. As the price of electricity rises, so does the price of gas.

If and when we get electric cars they will be charged over night.
Click to expand...

Is that really going to happen in the next 6-9 months?? Because that is all the cash the company has left at the current burn rate. Obviously to get to a future when off-peak power is used at almost the same rate as peak power, therefore no longer being off-peak, the company will have to raise capital. The share price needs to rise so that the company gets a better price for a new share offer, and less dilution for existing shareholders. Raising $5-10m does not cut it, they need at least a couple of years worth of funds. Probably more like $20-30m would be needed just to continue. To upscale the manufacturing to bring the price of the units down to the original suggestion of $8000, would require substantially more.

At what point do shareholders stop putting in more money?? With the last capital raising last year, 2 of the larger shareholders had a dilution in their percentage ownership of the company, which means that they did not take up their full entitlement, nor did they purchase more shares on the open market to make up for the dilution. Also in the last year no director has bought a substantial number of shares in the company.
A capital raising needs to happen very soon, and at a price that already weary shareholders will take up. The current pop in the share price may offer just such an opportunity, better if the overall sharemarket goes up for the next month or so.
If the compant waits too long to raise more money, in the hope of waiting for a large order for the BlueGen units, the existing cash-flow could become critical.

brty
 

I am agreeing with you pretty much for the forth time. The company,CFCL may be in strife, I dont really know though, maybe there is something they are not telling us, I hope there is.
I wouldnt be focusing on the Bluegen alone as an income stream, as long as they can sell something, some component.
As far as I am concerned, as long as the technology/product works and makes business sense, in a logical way, I wont give up on it.

I would like your insight as to why you think high peak power cost favors SOLAR.?
I am not against solar by the way. I see solar as part of the mix.

Also why you think this has anything to do with the price of gas.?

I am sorry I can not figure it out.
Thanks for your input.
 
Peak demand in Australia (except Tas) is on hot Summer afternoons. Generally speaking, the sun will be shining if it's 40 degrees outside - solar output is highest when electricity prices are highest.

There's a secondary peak during Winter that is not far short of the Summer peak in NSW. This is in the evening when it's dark.

Peak load in Tasmania is generally a bit after 8am on a cold Winter morning, with a secondary peak (and the absolute peak on the distribution system in residential areas, the morning peak having a larger share of commercial load) around 6pm in Winter.

Nationally however, overall system peak is Summer afternoons driven by cooling loads with the secondary peak being Winter evenings.

As for the price of gas, gas-fired generation increasingly is the marginal source in the market and sets the price. That is very much the case in NT (where 95% of power is from gas), SA (over 50% gas), WA and in more recent times Tasmania. Vic is the same at times of high demand but not at off-peak times. Qld and NSW are heading the same way gradually.

So if the wholesale electricity price has gone up, you can pretty much assume that the gas and/or coal price has also increased since fuel represents the major ongoing cost of generation.

Retail prices to households can however rise independently due to a combination of distribution costs (which are largely fixed per household regardless of overall consumption - if loads fall then higher supply charges will need to be introduced) and also political factors.

Where this all gets more complex comes back to the primary energy source used to generate electricity. If you're going to use gas anyway then a fuel cell is certainly an efficient way to do it. But with the geographical concentration of gas in a handfull of countries, it would be risky indeed for Europe etc to generate a large share of their total electricity from gas no matter what generation technology is used. It's not too wise giving another country the ability to turn off ALL your energy (gas already being used extensively for heating, industry etc). Hence continued reliance on nuclear, hydro, wind, coal etc with only a portion of total generation from gas.
 
Thanks for that Smurf,
But it doesnt answer the question of why increasing the COST, (not use)
of peak power favors solar over say fuel cells.

or why increasing the cost of electricity will increase the price of gas?
Assume demand/use for electricity is no different to before only less during peak times and more during non peak.
 
Frank,

But it doesnt answer the question of why increasing the COST, (not use)
of peak power favors solar over say fuel cells.
Click to expand...

Because the cost of electricity is highest when solar panels actually produce their electricity. When the BlueGen creates electricity is 24 hours a day, mainly because of the long start up process (20 hours), so it is designed to run continuously. The BlueGen unit will be producing electricity at a lower average price than what solar does, if both received the same type of feed-in tariff equal to current domestic rates plus of course the offset in the householders actual use.

or why increasing the cost of electricity will increase the price of gas?
Click to expand...

One of the main reasons why electricity will go up is because of the increase in fuel, gas being one of those. The other main reason is because of carbon tax or equivalent, or should I say the cost of the fuel going up again. With the BlueGen using ~110,000 Mj of gas a year, the input cost is going to rise. For solar there is no input cost so the discrepancy between the 2 rises.

I am agreeing with you pretty much for the forth time. The company,CFCL may be in strife, I dont really know though, maybe there is something they are not telling us, I hope there is.
Click to expand...

This thread is about the company, yet many have been promoting all the hype surrounding the technology and attributing good technology = good company. If the company is not telling people something, you can bet it is not good news. All the good news is released as quickly as possible, and it always seems to be accompanied with the hype of how good the fuel cell is in terms of efficiency.

Smurf,

Thanks for your input, I regard you as an expert in the area of electricity production/consumption and always seem to learn something new from your posts. As someone in the industry, are there ever discussions about these new types of electricity production like BlueGen or for that matter solar. I'd love to know what the industry scuttlebutt is.

brty
 

Thanks for trying, however this doesnt answer the question, so I assume you misunderstood all of it.

What I clearly said was, if you want to increase the usage of off peak power,
all you need do is make peak power cost more than off peak.
You could do this by increasing the price of peak power.

HOW does this change the price of gas if NO more gas is used than before??

No this doesnt favor solar, unless there is an artificial influence, which is incorrectly applied.
Solar has moved on now, from the domestic where it didnt/wont work to the commercial large scale operation. There is no real competition from solar.
There never was, the Australian government forced it on to the roofs of homeowners, paid for the whole shebang, some people regret doing it, complaining that their bills have gone up not down.

I repeat, as you have said yourself, the only competition in the field of power generation from gas is the gas power station.
Where fuel cell co-generation beats the power station in the energy conversion by a massive 60%

It is this, that keeps me going and gives me hope.
 
Victoria leads the way,
Part of the John Brumby interview, Climate Spectator, its a good read.
http://tinyurl.com/29r733v

"So those three things are really fundamental. I think the fourth area is obviously providing the right environment to turn this challenge into an economic winner, and whether that’s research and development, and new technologies in solar or geothermal, whether it’s through ceramic fuel cells and their development and production, whether it’s through the new technologies that might hypothetically halve the amount of energy that an electric motor uses. I think there is just a huge raft of new economic opportunities that are going to come as the world really focuses on a cleaner environment and knocking down carbon emissions. So they’re the four things I would focus on."
 
Hi Frank,

Firstly I'd like to thank you for your input into this discussion, it has made me do a fair bit of research on the company and the numbers involved.

What I clearly said was, if you want to increase the usage of off peak power,
all you need do is make peak power cost more than off peak.
You could do this by increasing the price of peak power.
Click to expand...

I think they do that now for a lot of people now. My off-peak power is ~10c/kwh our peak is ~23c/kwh (both numbers have the same discount of 7%)
Peak is 7-11 Monday- Friday, Off-peak the rest of the week, and weekends. There are 80 hours of peak and 88 hours of off-peak per week.

Now my point, that I think you misunderstood, is that this difference between peak and off-peak rates is what favors solar, with the assumption that the tariff you pay is reduced by the amount of electricity you produce and consume, and that the residual power fed back into the grid is paid at the same tariffs, in my case 10c for off-peak and 23c for peak.

It becomes quite simple to do the numbers. For Monday to Friday all the power generated by solar panels is at the peak rate price, while on the weekend the solar is produced at the off-peak rate. That means that 5/7 or 71% of all solar generation is at the peak rate.
For the BlueGen unit that operates 24 hours a day, it produces electricity at the peak rates for 80 out of 168 hours in a week, or 47%.

If the solar panel set-up was to match the BlueGen unit in output, say a 10kw system where there is an average of 4.8 hours of useable sunlight per day, then the return for the production of power will always be higher for solar while peak prices are higher than off-peak prices. If peak prices are raised relative to off-peak, then the numbers favor solar even more. In fact the one thing that BlueGen needs is for the price of off-peak to be the same as peak, to take away the advantage of peak pricing when the sun shines.

Added to the above is that solar produces no GHG, has no yearly ongoing cost and that the BlueGen has an input cost of ~$1545 per year for gas.

Solar has moved on now, from the domestic where it didnt/wont work
Click to expand...

Can you explain this a bit more?? I know of many people who are very happy with their solar set-up and the reductions in their bills.

some people regret doing it, complaining that their bills have gone up not down.
Click to expand...
All they have to do is their sums and go with a retailer that will allow existing discounts to continue, mine does.

Another aspect that has been overlooked in the debate about the BlueGen units is in terms of infrastructure, not the electricity infrastructure that the company talks about, but the natural gas infrastructure. If the plan was for 10s of thousands of these things to be spread around the suburbs, can the existing gas pipes etc handle the extra load??

Today's action in CFU shares was very high volume for not much upward movement. There seems to be plenty of sellers at these slightly higher prices.

brty
 
well it sounds like if they are out of dosh then the best thing to do is short them in to the ground, or until they manage to get their spit together and bring the units to market at an economic price and with all the reliability of the washing machine, sorry - dishwasher.

that shorts comment is for the traders obviously, I am not condoning pressure on the stock, I agree that in theory they have a good product, just cant get it over the line so far!

whats the chance of a takeover bid?
sounds like a cap raising could be scary.
 
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