Ceramic Fuel Cells (ASX:CFU) and Paloma Industries Collaborate On Fuel Cell CHP Products For Japan

Ceramic Fuel Cells Limited ("CFCL")(ASX: CFU), a global leader in fuel cell development, has signed an agreement with Paloma Industries Ltd of Japan to evaluate and develop integrated fuel cell micro-combined heat and power (m-CHP) products for the Japanese market.

Japan represents a key market for CFCL. The Japanese Government is providing strong support for fuel cells and has set targets of generating 2.2GW of power from stationary fuel cell units - equal to 2.2 million 1kW units, by 2010. The Japanese government currently provides a subsidy of up to 3.5 million JPY (21,700 Euros) per unit. Japan is also a large market for home heating appliances, with approximately 4.2 million sold per year.

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Established in 1911, the Paloma Group is a leading world producer of gas appliances for residential and commercial applications. With annual revenues of approximately US$2.5 billion, Paloma has manufacturing and sales facilities across the Americas, Asia-Pacific and Oceanic regions. It is one of the leading suppliers of home gas heating products in Japan, serving more than 10 million homes.

Under the agreement, CFCL and Paloma will work together to evaluate and develop a commercial m-CHP product by integrating CFCL's advanced fuel cell module with a Paloma home heating appliance. The unit is powered by CFCL's advanced metal-ceramic fuel cell stack, which currently runs on widely available natural gas and in the future can also operate on other fuels such as LPG, kerosene, ethanol or biodiesel. The highly efficient m-CHP product can be easily connected to existing gas and electricity networks and will provide low-carbon emission electricity and heating for Japanese homes.

As part of the collaboration, CFCL will supply Paloma with a NetGenPlus(TM) unit for Paloma to operate at its site in Japan. The unit is expected to be delivered in mid 2008. Paloma will operate the unit in real-world operating conditions, with CFCL providing technical support from its office in Melbourne. Using the results of the real-world product operation, which is expected to run for up to 12 months, CFCL and Paloma will design and develop integrated m-CHP products to meet the specifications of the Japanese market.

This agreement supplements CFCL's existing product development agreements with appliance partners and utility customers in Germany, France, the United Kingdom and the Benelux countries.

Commenting, Brendan Dow, Managing Director of Ceramic Fuel Cells, said:

"Our agreement with Paloma is the result of almost two years' technical due diligence and commercial discussions. It marks our entry into the Asian market and builds our future sales pipeline. Paloma's commitment to producing energy-efficient products, strong product development expertise, high quality and low cost system manufacturing, and extensive distribution not just in Japan but throughout Asia, Australia and the US make it the ideal regional partner for CFCL."

Shinya Hibino, General Manager, International of Paloma, said:

"We are excited to be entering the CHP market. The Paloma Group has a track record of developing and commercialising innovative, energy-efficient products such as solar water heaters, high efficiency condensing water heaters and high efficiency heat pumps. Fuel cells are one of the leading, new, clean energy technologies for the future and CFCL has one of the most advanced solid oxide fuel cell technologies in the world. We look forward to a successful partnership with CFCL".

About Ceramic Fuel Cells Limited

Ceramic Fuel Cells Limited is a world leader in developing solid oxide fuel cell (SOFC) technology which can provide reliable, energy efficient, high-quality, and low-emission electricity from widely available natural gas and renewable fuels. CFCL is developing SOFC products for small-scale on-site micro combined heat and power (m-CHP) and distributed generation units that co-generate electricity and heat for domestic use. CFCL is listed on the London Stock Exchange AIM market and the Australian Securities Exchange (code CFU).

 

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