German renewable energy company LichtBlick on Wednesday said it has teamed up with carmaker Volkswagen to bring miniature power stations for home use to the market in the spring of 2010.

A number of energy companies are experimenting with small scale power units, but so far this market has not posed any competition to large, integrated power suppliers such as E.ON and RWE.

LichtBlick, whose name translates to a glimmer of hope, said this could change in the long run.

By selling home power plants for decentralized and flexible power production, LichtBlick opens a new chapter of intelligent energy provision, Christian Friege, chairman of the Hamburg-based company, said in a statement.

...we know how power and gas markets work and how to organize distribution. In Volkswagen, we have won an ideal partner, he said.

LichtBlick, which currently has 490,000 green power customers, said it was aiming to sell 100,000 units called EcoBlue to create the equivalent of a 2,000 megawatts power station, which is roughly the size of two nuclear reactors.

LichtBlick's existing customers are supplied with certified green power from a number of sources including solar, wind and biomass.

Run with Volkswagen natural gas engines and eventually intended to be fired by biogas from non-fossil sources, the new units would produce power on demand, store heat and thus produce a constant hot water supply, it said.

EcoBlue units would be installed in those homes that are hooked up to the gas pipeline grid from which they receive gas for heating and cooking -- roughly half of German households use this option, while the other half uses heating oil from tanks.

But instead of just burning fuel, they would become able, via smart meters, to push power back into the electricity grid at short notice at times of load shortfalls, becoming a big alternative supplier.

The units would be marketed in Hamburg first, and later in other parts of the country at an individual installation cost of 5,000 euros ($7,248) per household, LichtBlick said.

It said the new technology would help pave the way for increased usage of renewable energies such as wind or solar power, potentially offsetting foreseeable power dips due to weather conditions.

A standard argument against renewables is the fact that their contributions swing wildly, depending on the force of wind or sun, which means they make heavy demands on providers of round-the-clock fossil-fuel-based power to back them up.

LichtBlick said its flexible units could produce power quickly to offset such shortfalls of sunshine or wind.

Volkswagen said the move could sustain 160 jobs in alternative engine production at its Salzgitter plant.

(Reporting by Vera Eckert; Editing by Keiron Henderson)