info@samad-power.co.uk
+44 (0) 1908 260 688

Market


Micro-CHP units are one of low carbon heating technologies whose growth has (over the last 5 years) been huge (supported by subsidy) in the deployment of low carbon, distributed energy generation. This is projected to change over the next decade, with independent analysis suggesting a huge growth in the UK’s use of low carbon heating technologies from c. 2015 from around 2% to c. 30% by 2025. This growth will come largely from the selection of low carbon heating technologies in preference to gas boilers, with electric heating staying roughly constant over this period.

Although m-CHP shares the low carbon heat category with other technologies such as solar thermal, air and ground source heat pumps, it has a significant advantage over them because its selection replaces the need for a gas boiler completely, while the others can only reduce the number of hours a gas boiler is required to deliver heat. M-CHP is likely therefore to be the single greatest beneficiary of these projections in overall market growth.

The characteristics of the micro turbine technology has the potential to experience fast market uptake similar to the change that condensing boilers brought to the boiler market during the last decade. The graph below shows the rapid growth of this technology. Over 90% market penetration within 10 years has been achieved. The cost of these boilers were similar to TGB and TwinGen during the first 5 years of deployment. The forecast is based on figures much more conservative than growth of condensing boiler. However the period of rapid market expansion for TGB and TwinGen will be most probably during 2020 to 2030 growing from 10,000 to millions of units, making the micro turbine CHP boilers the industry standard.

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Design characteristics, particularly the power and heat output, mean that the TGB is most suitable for use in large detached houses built pre-1918, commercial premises, schools, supermarkets, hospitals, care homes. Heat requirements across these organisations will differ significantly, but the key characteristic identifying the target market is the annual heat demand, which will normally be at least 60,000 kWhth , and a demand profile which is preferably flat (i.e. a continuous demand over a typical 24 hour period).

Samad’s research suggests that there are 2.3m appropriate sites in the UK spread across a number of different site uses, and equating to a total annual market of £580 m, which rises to £4.7 bn across the EU

  • The TGB will offer purchasers financial benefits from its use – both revenue streams and avoided costs - which are not available to users of conventional gas boilers. In the UK these are as follows:
  • A MCHP feed-in-tariff of approximately 13.45 pence for every unit of electricity generated by MCHP – the generation tariff
  • An additional payment of just under 5 pence for each unit of m-CHP electricity which is exported to the grid – the export tariff. (this is not calculated, but assumed to be 50% of total generation)
  • Grid electricity avoided: - this is the reduction in electricity bill which the m-CHP user enjoys by being able to generate part of their electricity requirement
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The Twingen micro gas turbine will be smaller and capable of quicker response times than the TGB, enabling Samad Power to incorporate the unit into a m-CHP unit aimed at the residential boiler market.

In this market it will be offered as an alternative to the conventional gas boiler, offering customers the opportunity to generate electricity while they are using their unit to deliver their heating requirements.

  • The EU residential boiler market is worth £6.5bn per annum, the total number of 8.1 million boiler sales per year.1 This market is the largest in the world, in large part due to the comparatively extensive gas grid across the EU. It is estimated that only owner occupiers (65%)2, and only those in higher economic groups (50%) would consider purchasing a m-CHP unit as an alternative to a conventional gas boiler during the first three years of launch, providing a total addressable annual market for Samad Power to be 2.0m units / year (worth £5.0 bn with unit price of £2,500 each, based on 2020 prices).
  • Independent research focusing on Stirling engine m-CHP in major European markets suggests that the technology could achieve a 50% market penetration of the boiler replacement market by 2025 if it could reduce its installed price to £3,500.3 Samad’s Twingen delivers superior performance, a lower projected installed price, achievable at volume, of £3,500 and corresponding better payback compared to existing Stirling engines. A 50% penetration rate suggests a market potential of c. 4m boilers / year.
  • Once volume manufacturing is achieved the Twingen m-CHP boiler can be offered to the market at £3,500 installed, only just over half the price of its nearest m-CHP competitor product (Flow’s ORC based boiler), and only £1,500 more than a conventional gas boiler.
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info@samad-power.co.uk
+44 (0) 1908 260 688


9 Centurion Court, Brick Close
Kiln Farm, Milton Keynes
Buckinghamshire
MK11 3JB

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Areas of Expertise

Samad Power team has a mix of different skills and knowledge base and where it is short of certain skills it has utilised the expertise of its various subcontractors