A Stirling idea
This innovative manufacturer found that the real block to selling its hot idea was not the skills gap, but a shortage of cold cash, reports E&T.
Reducing carbon emissions and cutting energy costs is driving a mini-renaissance in many areas of engineering, with new tools and technologies being developed for domestic, commercial and industrial consumers. But a clever idea can only become a great one if it has the potential to be used on a significant scale.
So when British company Disenco acquired the technology for a Stirling engine-based combined heat and power (CHP) appliance from its Scandinavian developers, the main challenge seemed to be that it lacked the skills needed to turn it into a saleable product.
Fortunately, the availability of subcontractors of all sorts means that manufacturers who have a bright idea, but don't have all the necessary skills and tools, can pull in the rest from outside. Disenco's focus therefore shifted to managing its interaction with the partners who were supplying it with the capabilities it lacked to build its HomePowerPlant (HPP).
However, where the HPP project stumbled - although fortunately it managed to stay on its feet - was instead the finance that Disenco needed to turn its clever ideas into a tried and tested, viable commercial product.
CHP - or cogeneration, as it is known in the US - burns fuel to generate both hot water and electricity, and is increasingly promoted as an efficient alternative to traditional condensing boilers and central heating systems. The challenge though, as CHP devices get smaller, is how to produce electricity efficiently.
This, or so Disenco hopes, is where the Stirling engine comes in (see 'What is a Stirling engine?', p60). By converting heat into motion more efficiently than an equivalent steam engine, the company claims it enables the HPP to be more than 90 per cent efficient - putting it on a par with the best combi-boilers. It can produce as much as 15kW of thermal and 3kW of electricity, giving it up to three times the electrical output of other micro-CHP technologies, the company claims.
The idea is that the HPP will produce all of the heat and hot water, plus on average 50 per cent of the electrical demand of a modern house or small business. It also modulates its output, adjusting the proportions of electricity and thermal energy to meet demand.
Any surplus electricity can be fed back into the supply and sold to the National Grid. "The government has a consultation document for feed-in tariffs out at the moment which would get payback [on the HPP] down to around a year," says Alan Dale, Disenco's CEO.
Previously part of Sigma, a Norwegian manufacturer of Stirling engines, Disenco split away and moved to the UK in 2002, when Sigma was floated on the Norwegian stock exchange.
In 2007, following successful trials of the technology it had acquired from Sigma, Disenco embarked upon its commercialisation programme. Its task was to turn its science and patents into a viable product, with all the necessary characteristics for mass manufacture, easy installation and cost competitiveness.
"The Stirling engine work has been going on for years, first in Sweden, then Norway and now Sheffield. Our aim is to commercialise the technology," Dale says. "The Stirling engine was difficult to manufacture in the early days, but it's a lot easier now - it is basically a motorcycle engine. The clever bit is the patented heat exchanger."
The HPP uses a two-piston beta type Stirling engine, where heat from the boiler turns linear motion into rotary motion using a rhombic drive, which produces electricity from a generator. It currently runs on mains gas or propane, but Dale says it could eventually run on other sorts of fuels, including oil, biogas and perhaps even biomass.
The problem was that Disenco didn't have all the skills it needed to get the technology to market smoothly, and it didn't want to go to the expense and risk of recruiting them. It therefore looked for partners who could handle the areas of development that it couldn't do itself, and ended up with multiple subcontractors, each working on specific areas of the HPP.
"We chopped the appliance into three - the engine, combustion and control. It is cheaper to do the work in-house, but it is difficult to get the expertise, especially with something like the Stirling engine," says Dale.
"The development work is Enertec for the boiler/gas work and combustion processes, and associated government regulations. Prodrive is doing some of the mechanical development on the Stirling engine, and Sentec is doing the electrical work - there is a huge regulatory load there as it varies from country to country, and even from state to state in the US. Then there are manufacturing partners such as Autocraft building the engines and Malvern Boilers completing the package."
Having multiple companies working on the same project brings both advantages and challenges, as it makes the project team more capable but adds management complexity. Dale argues that the latter should not present problems for a good project management team, however.
"Working with partners gives us the right knowledge-base," he says. "It also means we can slow the project down if necessary. You do need a good project team around you - we have an electrical engineer and a senior mechanical engineer, they project-manage it all. The trick is to keep the communication channels open at all times and keep an eye for detail."
Speaking from the other side of the fence, Oliver Burstall, Sentec's director of consulting services, says the project meant working closely with the client's own engineers. He adds: "They have an interesting business model - they own the IP and have their own engineers, but they're farming out the specialist work.
"With CHP it was the power electronics aspect and the grid tie inverter (GTI), which takes the energy generated by the appliance, inverts it to 240V and 50Hz, and feeds it into the house mains. A critical function is anti-islanding - you have to stop putting power onto the grid if the grid shuts down, for line repairs say, so the GTI has to assess if the grid is active."
There are a variety of GTI solutions already available - for solar and wind, for example - but Disenco's unique needs did not fit an off-the-shelf GTI, Burstall says. "The power electronics in this system were especially complex because the energy generated by the HPP is not constant. The boiler can generate anything from 0.5 to 3kW of power.
"We have to put power in to start the CHP, then switch to generating mode, and then you can have stored energy in the system. Another consideration is efficiency - for solar and wind it's just the cost of the energy to manufacture [the generating equipment], but CHP also burns fuel and uses the surplus energy, with no transmission losses. The economies of scale are very interesting - the way energy is used is inconsistent."
The other part of the system that Sentec designed was the appliance's user interface. A key factor here was that Disenco wanted to move away from the traditional complex and difficult to use interfaces that have characterised boilers to date.
The team took its inspiration from the advances that have been made in touch-screen technology, with the explosion onto the market of affordable satnav systems in cars. By applying the same principles, Sentec was able to develop something that is easy for consumers to use, without adding significant cost pressures - and with the added benefit that the same screen can be reconfigured in software to serve multiple purposes.
"Although the GTI is probably the single most important part, you also have the control system and its user interface, where you can see how much power is generated, programme the hot water, and so on," Burstall explains. "Screens are quite cheap now, so integrating a touchscreen into a boiler is feasible. It also means the simple UI for the user can change to a more sophisticated one for maintenance."
As well as outsourcing much of its specialist development work, Disenco has also come up with a relatively innovative way of selling the HPP: it plans to lease the appliances to consumers via energy suppliers such as Centrica in the UK and Endessa in Spain. In contrast, most of its CHP rivals plan to sell through boiler companies.
"We work with utility companies on a leasing model where they would install and maintain the appliance for a fixed monthly fee," he explains. "It's a new model for them, but they're under pressure and they need a new way to bring revenue in."
By the end of 2007, a prototype HPP had completed 15 months of trials at The Carbon Trust, the environmental engineering body backed by the UK government, and in early 2008, another HPP went on test with Prodrive in Kenilworth. More prototypes went on field trials, and by 2009 Disenco was planning a full commercial trial for the first quarter of 2010.
"We have completed the Prodrive project now, Sentec has nearly completed its workload, and Enertec has a complete appliance on a PAS67 rig for endurance testing and approvals," says Alan Dale.
Then came the financial crisis, and a key investor pulled out. The whole project hit a speed bump, and by doing so it missed a critical junction - the start of the 2009 heating season.
"We are still working on it, but it hasn't gone as quickly as we'd hoped," Dale says. "The trials slipped because we were waiting for investment, and now we've missed the heating season for this year."
In order to validate both the appliance and the leasing scheme, it needs to do field trials with real customers - and that means properly benchmarking those customers' existing heating and power supplies before putting in an HPP.
"If you were going to trial with us, we'd come in [over the winter] and monitor your current boiler, your fuel usage and so on, so later we can prove the savings," Dale says. But having missed the start of the heating season, there was nothing Disenco could do except postpone the trials for 12 months. Its remaining subcontractors "are up in the air now, but that's the name of the game".
Part of the problem, he says, is that the way venture capitalists (VCs) think and work is rarely attuned to the needs of manufacturing industry. "We have always been 12 months from production," he says. "You're looking for seed investment, but most VCs want a quick payback, within 12 months."
He remains cheerful, though: it may take another year to ramp up, but the HPP is almost ready to go into volume production, and he has found new investors willing to take that longer-term view.
"The message [to other innovators] is obviously investment," he says. "We have been unlucky - we signed an agreement last year for €9m, then walked straight into the credit crunch. We had to start again, and eventually found two new private investors, one in Switzerland and one from Monaco. Their funding is to fund the lot from now right through to production."