Etalim Inc. NRCan ecoENERGY Innovation Initiative Stakeholder Report, May 2014

Contents ¡  Etalim’s technology

¡ Micro-CHP application and market landscape

¡ NRCan EcoENERGY project accomplishments and activities

¡ Current status and future tasks

The Etalim TAC Technology

A new form of thermo-acoustic engine for Micro-CHP

A fundamentally new engine

¡ New, patent-pending small external combustion engine

¡ Generates electricity from any fuel or heat source

¡  Extraordinary 46% long-term efficiency target (42% electrical)

¡  Small, simple, elegant and cheap: $0.30 per Watt (factory volume cost)

¡  Extreme reliability – 40 years of maintenance-free operation

¡ Disruptive to several distributed, remote and renewable power generation markets

Etalim was profiled in MIT Technology Review http://www.technologyreview.com/energy/32267/

About Etalim’s Technology

Etalim is developing a thermoacoustic generator called the TAC-HT. The device achieves high efficiency through high-frequency flexure-based operation, totally eliminating mechanical friction and wear. The device is very simply constructed, almost all metal, with no pistons, bearings or moving seals. The technology has been demonstrated as a functioning prototype; commercial product is in development. Etalim’s technology stems from some recent advances in thermoacoustic physics. Etalim has four patents pending.

Article on Etalim in MIT Technology Review

TAC Introductory Video (TAC-MT architecture)

(2:30)

Hot gas inlet (heat source)

Thermo-acoustic link (35 cm pipe, flexible routing)

Cooling water

inlet, outlet

5 kW electric output

Generator Module

Thermal Module

1 kW Etalim TAC

The TAC (Thermal Acoustic Converter)

Only moving parts are fatigue-

free flexures

No seals,valves or lubricants

No mechanical friction

No maintenance

Heat in Cooling

Acoustic wave in Helium

to generator

1 2

3

4

1.  500 Hz acoustic pressure wave enters Thermal Amplifier Module (TAM).

2.  Heat increases power of acoustic wave. Wave passes to Generator Module.

3.  Pressure wave drives tiny 200 micron amplitude flexure of steel Power Transducer.

4.  Mechanical power drives electromagnetic or piezo generator.

5.  The leftover lower-power acoustic wave flows back to the Thermal Module, to start the cycle anew.

Thermal Module

Generator Module

4 patents pending

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Potential Markets - overview Micro-CHP Biogas Waste Heat Solar

Problem Need high efficiency in a small, low-maintenance device.

Normal engines can’t handle dirty biogas, and biogas is expensive to clean up.

No small-scale solutions with good efficiency.

Low PV efficiency. Thermal systems use too much water.

Opportunity $30B = ⅓ of residential heating market in EU over 15 years.

$1.4B = 700 MW untapped biogas in NA.

$20B = value of wasted industrial heat annually in NA.

$30B over 20 years.

Competition Fuel cells, Stirling Detuned IC engines Organic Rankine and Thermoelectrics

PV, Solar Thermal (steam turbine)

Strategy OEM supplier to HVAC mfr’s starting 2017.

OEM supplier to integrators starting 2014.

Engine supplier. Secondary target after 2015. Engine supplier.

Progress Strong interest from EU HVAC leaders. JD with small boiler maker and Canadian gas utility.

Not a current focus. Demo program started with a major auto maker.

Not a current focus.

Micro-CHP Application

Combined Heat and Power in the home – A promising new form of distributed generation

What is mCHP

¡  Micro-CHP appliances co-generate both heat and electricity in the home using a primary fuel, typically natural gas.

¡  Micro Combined Heat& Power (micro-CHP) is a newer form of residential heating that offers both energy cost savings and GHG reductions. Micro-CHP generates electricity at a 90% effective efficiency.

¡  Cogeneration, also known as Combined Heat and Power (CHP) is well-established in industrial settings; what is new is the ability to shrink cogeneration into a small appliance sized for a single family dwelling.

1 kW micro-CHP appliance

Micro-CHP is a new form of clean, efficient distributed generation of power and heat within the home.

Micro-CHP

Natural Gas Etalim TAC

Heat

Electricity 100%

60%

30%

10%

Free Heat!

}  Benefits to consumer }  Reduced energy bill }  Reduced carbon footprint }  Backup power in case of grid outage

}  Benefits to utility }  New peaking generation capacity at

low capital cost }  Leverage shale gas supply }  Dispatchable power / demand

response }  Distributed generation avoids need for

transmission line infrastructure. }  Benefits to government

}  Primary energy savings }  Reduced emissions

}  Diversity of supply

Micro-CHP offers important benefits to all stakeholders.

Micro-CHP market synopsis

¡  Micro-CHP is defined as < 5kWe, although residential products are all <2 kWe. ¡  Global mCHP sales in 2013 were 55 MWe and approximately $500M. ¡  Market is nascent: 1st generation product offerings launched in the past 2

years. Comparable to the PV market in 1995. ¡  Primary geographic markets today are Japan, Germany, UK (strong FiTs or

subsidies). Secondary markets are other northern EU, Korea, niche North America.

¡  Purchased as a replacement for a home heating boiler, or in a new home build.

¡  The dominant technologies in the market today show little prospect to reach economic viability.

¡  Prices and operating costs are high for existing technologies, resulting in slow market uptake.

¡  Approximately 200,000 units sold to-date worldwide. ¡  Market is <1% of the overall home heating market. ¡  Mass market potential (5-25% of home heating market in temperate

climates) if price and reliability targets can be met.

Micro-CHP is a nascent paradigm-shift market showing strong growth and very large long-term potential.

Global micro-CHP forecast

Smart Energy: Five Metatrends to Watch in 2013 and Beyond

©2013 Navigant Consult ing, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consult ing, Inc.

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Chart 2.1, taken from the 1Q 2012 Pike Research Residential Combined Heat and Power report, shows the capacity of resCHP. Pike Research’s forecasts anticipate a cumulative installed capacity of 26,568 MW between 2010 and 2022. Note, though, that with an increase in feed-in tariffs, a rise in systems available with islanding capability, and the removal of barriers to allow small producers to sell excess power back to the grid, this could be seen as a very pessimistic forecast.

Chart 2.1 resCHP from Single and Multi-Family Dwellings, World Markets: 2010-2022

(Source: Pike Research)

In 2013 specifically, Pike Research expects to see growing concern from transmission and distribution companies about the potential impact of an increased number of small producers that they cannot control in terms of load available to be fed into the grid. This concern will likely lead to a call from grid owners and operating companies to be allowed to be able to control when and how much electricity is drawn from the resCHP systems. Meanwhile, adopters of resCHP systems will likely push back on allowing such control by grid owners and operating companies.

Thus, in addition to the increased adoption of DG technologies in 2013 and the increased removal of barriers to sell on the grid, Pike Research expects it to be a key year in terms of opening up discussions. Two important parameters will likely be set: the rules of the game for producing, selling, and controlling decentralized power and the amount of democracy the adopters are to be allowed.

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

(MW

)

Global micro-CHP installed base forecast3

Sources: 1. Based on Pike Research forecasted installed base, at $3 per Watt. 2. BSRIA, World Market for Heating, Bracknell, UK, 2011. 3. Pike Research.

~$8 billion annual global micro-CHP market by 20211. Worldwide market of over 15 million natural gas domestic boiler and furnace replacements per year2.

The Etalim TAC for micro-CHP – target specifications

¡  Natural gas fueled. Other fuels can be supported with modified external-combustion burners.

¡  Capacity: 1–2 kWe

¡  Net system electrical efficiency: 31.5% LHV/28.5% HHV (first generation)

¡  Thermal efficiency: 69.0% LHV/63.5%HHV (First generation)

¡  Hot water temperature: 40-80°C

¡  No maintenance and no degradation expected for the engine over 40 years operating life and many thermal cycles.

¡  Turn-down modulation up to 50% (with reduced efficiency)

¡  Cold startup within 10 minutes

¡  Can start up/shut down daily or be operated continuously

¡  Etalim will supply the TAC component to HVAC manufacturers.

The Etalim system has a unique combination of efficiency and operating flexibility.

Micro-CHP competitors

¡  Micro-CHP systems are largely defined by the prime mover (engine or fuel cell) at their heart.

¡  In all cases, current offerings are not economical. For example, 700 Watt fuel cell systems cost $20,000 and have no ROI/payback.

¡  Stirling Engines ¡  Free-piston component must be precision manufactured at high cost and then carefully

controlled and balanced to avoid wearing against the cylinder wall or over-stroking. ¡  Existing approaches are unreliable and expensive.

¡  Fuel Cells ¡  Require expensive balance-of-plant subsystems such as reformers, de-sulphurizers, de-

humidifiers or after-burners. ¡  Degrade performance by 0.5% per year (typical). Lifetime is 5-10 years. ¡  Can only run on very pure natural gas (German gas network is problematic because of

biogas injection). ¡  Internal Combustion (IC) Engines

¡  Requires expensive precision engineering to meet lifecycle requirements. In a micro-CHP appliance, an IC engine must survive running hours that are the equivalent of over 7 million highway driving miles on an automobile IC engine.

¡  Requires oil changes and other maintenance – expensive home service calls. ¡  Expel waste heat from both their cooling fluid and their exhaust, which makes heat

collection for micro-CHP complex.

The Etalim system has strong fundamental competitive advantages.

Micro-CHP Technology Comparison Etalim

v1 (MT) Etalim v2 (HT)

Stirling Engine

IC Engine

Fuel Cell

Cost 4 4 2 3 1

Efficiency (net electrical)

29% 35% 15% 26% 30-45%

Reliability 4 4 3 2 2

Lifetime 4 4 3 2 0

Maintenance frequency

4 4 4 0 2

Fuel flexibility 4 4 4 1 2

Emissions 3 3 3 2 4

System simplicity 4 4 4 2 0

Start-up time 4 4 4 4 1

Responsiveness 2 2 2 4 2

4 Good 0 Poor

NRCan Project Advancing the Etalim TAC though a complete

micro-CHP proof of concept

Project summary The objective of this Project was to develop the TAC from its initial state as a lab prototype, to a pre-commercial beta unit capable of multi-fuel operation. The TAC as also to be integrated into a prototype micro-CHP system, and tested as such in a laboratory environment.

The project was carried out between January 2011 and March 2014. NRCan ecoEII provided project funding between October 2012 and March 2014. SDTC, IBC Technologies and Union Gas provided cash and/or in-kind funding for the duration of the project.

Project highlights ¡  A new TAC architecture, dubbed the HT, was conceived early

in 2012, designed and constructed during the remainder of 2012 and 2013.

¡  A new patent on this TAC concept was filed. ¡  The first prototype HT was completed in April 2013 and testing

commenced. ¡  The HT was demonstrated to run at 700C, and to accept heat

from an external source (outside of the TAC pressure vessel wall) – a first for Etalim.

¡  The HT has so far achieved 860 Watts (peak) of mechanical output at 700C temperature, >40 hours of operating time with eight hours continuous.

¡  The first HT engine has so far underperformed on the efficiency metric (achieving only 18% versus the target 27%), but this deficiency is expected to be rectified within the next three months.

¡  A high-efficiency recuperative natural gas burner was developed for the TAC, and tested to demonstrate 70% efficiency.

¡  A complete micro-CHP proof-of-concept system was designed and assembled.

Project Technical Achievements ¡  The development of advanced thermo-acoustic regenerators constructed of high-temperature

glass and coated to minimize radiative thermal losses at high operating temperatures

¡  The design and implementation of thermoacoustic linkages known as inertance tubes and buffer tubes

¡  The successful design and construction of uniports in the HT GM on both the compression and expansion sides, to simplify the construction while increasing layout flexibility and reducing cost.

¡  The development of a process to enable the manufacture of copper micro pin-fin “velvet” heat exchanger components within the TAC engine. These components offer superior resiliency and reliability at lower cost than our previous carbon fiber variant.

¡  The redesign of internal heat exchangers with flow distribution beneath the velvets.

¡  Design, manufacture and demonstration of a mechanically balanced 1 kW electromagnetic generator for the TAC-HT thermoacoustic engine. This generator achieves 88% efficiency, which is a level of performance very close to the commercial-level product target. A new patent was filed on intellectual property related to this new generator.

¡  The development of a high efficiency recuperative natural gas burner, closely integrated with the TAC-HT engine.

¡  Design and assembly of a micro-CHP test bench, representing the complete system architecture of a baseline micro-CHP appliance.

¡  The development of a thermo-acoustic self-circulating loop concept, for delivery of source heat to the TAC engine from a remote heat source (such as exhaust waste heat). This concept was successfully modeled and demonstrated in working hardware, which opens the door to many additional waste heat recovery applications for our TAC. This concept is worthy of another patent application.

TAC-HT Prototype

¡  HT TM with H10 GM balanced generator combination testing started (6 Jan 2014)

¡  Demonstrated operation with very low (< 1 um) housing vibration.

¡  Successfully acoustically coupled both halves of the balanced power transducer with uni-ports to single acoustic ducts.

HT Performance Figures show experimental results of actual achieved performance to date.

¡  Peak burst power ~800W with sustained power ~500W (bottom graphs). Sustained power limited by available heat input.

¡  Efficiency ~15% (dashed red line in top graph. Only valid at steady state)

¡  Still need to substantially improve efficiency. A number of problems have been identified and fixes are in progress.

Generator Module Efficiency

¡  Evaluated by acoustically coupling two generators ¡  One generator driven, the other tied to resistive load

¡  Measured electrical power in and out, as well as acoustic power in the coupling duct

¡ Minimum efficiency of 88% per generator at 800 W input power

¡  Assumes losses equal in both generators

¡  Not corrected for acoustic losses in duct and couplings so actual efficiency slightly better.

¡  Meets design estimate of generator efficiency

GM1 GM2 787 We 617 We

Acoustic duct

Driven in reverse, as an acoustic motor

Generator

Burner Prototypes

1.  Premix fan 2.  Inlet manifold 3.  Recuperator 4.  Combustion chamber 5.  Finned heat exchanger (3 stage) 6.  Engine load simulation 7.  Return and load exhaust 8.  Burner exhaust

V1 V2

Micro-CHP proof of concept

1.  Controller 2.  Gas valve 3.  Fan 4.  Pressure vessel 5.  Recuperator 6.  Engine load 7.  Cooling meter 8.  Exhaust gas analyser 9.  Condenser 10.  Condensate drain 11.  Gas analyser 12.  Exhaust evacuation

mCHP – base system

Air intake

Ignition

Gas valve

Venturi

Fan

Combustor

Controller

Etalim TAC Generator

Module

Etalim TAC Thermal Module

Filter

Power electronics

Condenser

Plate HX

Plumbing

Brackets

Pump

Coolant reservoir

Frame

Packaging

Coolant

Future Work Towards full commercialization of the Etalim TAC

in micro-CHP

Key future milestones

¡  Continue to improve the efficiency performance of the TAC-HT – 2Q2014

¡  Test micro-CHP system with full-performance TAC-HT, natural-gas fired – 3Q2014

¡  Engineer a version-2 micro-CHP appliance, packaged for field trials – 2015

¡  Test micro-CHP appliance at the NRCan CCHT facility – 1H2016

¡  Live field trials with European partner – 1H2017

¡  Commercial product ships – 2H2017

Progress & Plan D

eve

lop

C

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me

rcia

lize

Fi

nanc

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…2013 2015 2014 2016 2017 2018 …2021

Gen 1,2,3 prototypes

TAC-H Proto

TAC-H α,β

Vehicle WHR integration

TAC-H launch

• mCHP • 1 kW • 38% eff. • 700°C

mCHP JDA

mCHP integration

$2.4M equity

$7.1M grants

A equity

B equity

$24M Revenue

$463M Revenue

TAC-J • 1 kW • 45% eff. • 1000°C TAC-R

α,β

TAC-R launch

• WHR • 5 kW • 26% eff. • 450°C

Confidential

Vehicle WHR JDA

Vehicle WHR Launch

12

Vehicle WHR Pilot

mCHP Field Trials

mCHP Launch

$2M Revenue

Remote Power

Launch