WhisperGen in Europe venture
Meridian Energy has confirmed a joint venture with Spanish manufacturer Mondragon to mass-produce a domestic heating and power unit for Europe's market.
Meridian Energy's start-up, WhisperGen, which designed the small gas-fired power generator, will own 40 per cent of the joint venture and Mondragon, one of the largest co-operatives in the world with 83,000 staff, will hold 60 per cent.
WhisperGen would also receive a royalty in addition to any returns from its share in the venture, in recognition of it licensing the technology.
WhisperGen chief operating officer Bill Highet said the venture would make about 30,000 units a year in Spain.
Pre-production units would be available for testing and certification in the middle of this year and the first commercial product would be available for sale in time for the 2008/09 European winter.
The domestic unit heats water and generates a small amount of electricity to reduce the amount a household draws from the local electricity network.
It was expected to be popular in Europe where gas was cheaper than electricity.
The generator was also 95 per cent energy efficient, compared with the traditional gas boiler which was only 80 per cent energy efficient.
Highet said the joint venture was about to sign five distributors who each wanted to buy between 15,000 and 20,000 units over a five-year period.
The distributors were a combination of energy companies and other companies with expertise in installation and service of that type of product.
British energy company Powergen has also agreed to order 80,000 units over four to five years.
The venture is establishing a dedicated manufacturing facility in Spain and has the option of building a stand-alone facility or leasing a site Mondragon owns.
It was more cost-effective to manufacture the product closer to its core market, and would also reduce its carbon footprint, Highet said.
Mondragon is a vast company that makes about two million whiteware units a year, including dishwashers and clothes dryers.
Meridian Energy chief ex-ecutive Keith Turner, who was unavailable for comment yesterday, said in October that the venture expected to turn a profit within two years.
Meridian owns 75 per cent of WhisperGen, after buying Christchurch electricity network company Orion's majority interest in July last year.
Turner said WhisperGen had reached an exciting stage in the development.
"The time has come to be more efficient and this technology has reached maturity after a long investment and development cycle."
He said WhisperGen was well ahead of competing technology.
About 7 million gas-fired boilers were replaced in Europe each year, so the potential market was big.
Highet said he would like to see other players in the market because it would give the product more credibility.
"I look forward to the day when people are making a decision about which type of micro CHP (combined heat and power) product they will put in their house not about whether they need a CHP," Highet said.