Ceramic Fuel Cells Ltd (CFCL) is to start commercial production of its fuel cell systems following a volume order from a major European partner.CFCL is to invest EUR12.4 million in the construction of a manufacturing plant in Germany with an initial capacity of 10 000 units per year. The fuel cell units will be integrated into domestic boilers to create micro-combined heat and power (m-CHP) systems.

CFCL has also announced advances in power density in its fuel cell stacks.

The plans for a manufacturing plant follow a volume order from Dutch utility Nuon, which has been partnering CFCL in the development of mini-CHP technology for the Netherlands’ domestic market. The order is expected to generate “substantial” revenue for CFCL.

Under their agreement, CFCL will supply Nuon with 50 000 fuel cell units over a five year period beginning in June 2009 provided that the technology achieves certain performance targets. The new generation fuel cell boilers will be deployed by Nuon for its residential customers, generating both heat and electricity in homes.

CFCL will assemble its fuel cell systems at new facility in Heinsberg, Germany in automated and semi-automated production lines in a staged scale-up operation. The total cost to CFCL of phase I of the manufacturing project, including all plant and equipment and commissioning, will be EUR12.4 million, significantly below previous expectations.

CFCL also says that advances in power density have increased the output from each of its fuel cell stacks to 2 kWe from minimal additional balance of plant cost. This development not only reduces cost per kW of each unit will also improve CO2 savings.

In the second phase of manufacturing, capacity will increase to 160 000 stacks per year within the existing building.