FuelCell Energy Announces 121.8 Megawatt Order, Largest Ever Received by the Company and the Fuel Cell Industry
Product Backlog in Megawatts Increases by 284 Percent From Q3 2012
DANBURY, Conn., Nov. 5, 2012 -- FuelCell Energy, Inc.
service of ultra-clean, efficient and reliable fuel cell power plants, today
announced an order from its South Korean partner, POSCO Energy for 121.8
megawatts of fuel cell kits and services to be manufactured at the FuelCell
Energy production facility in Torrington, Connecticut.
The estimated value of the multi-year contract is approximately $181
million. POSCO Energy, the largest independent power producer in South
Korea, is a subsidiary of POSCO, a leading global steel producer.
"POSCO Energy recently signed a contract to build the world's largest fuel
cell park, a 58.8 megawatt project located in South Korea," said Jung-Gon
Kim, Senior Vice President, POSCO Energy. "This order to FuelCell Energy for
121.8 megawatts will help us meet demand in South Korea as well as other
"This is the largest order ever received by FuelCell Energy and the fuel
cell industry, almost tripling our product backlog and initiating our
planned increase in production levels for 2013," said Chip Bottone,
President and Chief Executive Officer, FuelCell Energy, Inc. "The extensive
market acceptance in South Korea for ultra-clean and efficient fuel cell
power generation is a deployment and job creation model that can and should
be replicated in other regions of the world."
South Korea adopted an ambitious renewable portfolio standard (RPS) in
2012 to promote clean energy, reduce carbon emissions, and develop a local
green-industry to support economic growth. Utilities and project investors
are developing new and renewable power projects under the RPS including the
new 58.8 megawatt (MW) fuel cell park that is in progress with construction
expected to commence in 2012. The ownership of the
58.8 MW fuel cell park includes Korea Hydro & Nuclear Power Co. Ltd.,
Samchully Co., POSCO Energy and financial investors. The electricity will be
sold to the power grid and the heat from the fuel cells will be supplied to
a district heating system.
"This multi-year committed order is really quite extraordinary from a
production standpoint as it allows us to level-load our factory and provide
committed volumes to our supply base, important factors for further
improving our overall cost profile through operating leverage, manufacturing
efficiencies and stronger supplier relationships,"
commented Tony Rauseo, Chief Operating Officer, FuelCell Energy, Inc.
"We can continue to support market development efforts by POSCO Energy
through further cost reductions."
The first delivery will occur in May 2013 to ensure an uninterrupted supply
of kits as deliveries under the existing 70 MW order will conclude in April
2013. Each kit consists of 1.4 MW of fuel cell components that are
interchangeable and can be used for megawatt class fuel cell power plants or
Mr. Bottone continued, "Production from this order, combined with production
for scheduled restacks under existing service agreements, generates annual
committed production of approximately 50 to 55 megawatts, which is the level
needed for the Company to achieve quarterly positive gross margins."
As an additional indicator of demand for stationary fuel cell power plants,
Korea Hydro & Nuclear Power Co, Ltd. executed a memorandum of understanding
with Seoul City on September 28, 2012 for the joint development of new and
renewable power generation, including 120 megawatts of stationary fuel cell
power plants. Expected fuel cell applications include the Seoul City subway,
municipal water treatment facilities and resource collection facilities.
Electrical and thermal efficiency is important under the RPS and the fuel
cell power plants are expected to be configured for combined heat and power
Direct FuelCell(R) (DFC(R)) power plants excel at solving energy,
environmental and business problems by providing ultra clean, efficient and
reliable distributed power generation solutions. Direct FuelCells combine a
fuel such as natural gas or renewable biogas with oxygen from the ambient
air to efficiently produce ultra-clean electricity and usable high quality
heat through an electrochemical process. DFC power plants emit virtually no
pollutants due to the absence of combustion.
Avoiding the emission of nitrogen oxide (NOx), sulfur dioxide (SOx) and
particulate matter supports clean air regulations and benefits public
health. The high efficiency of the fuel cell power generation process
reduces fuel costs and carbon emissions, and producing both electricity and
heat from the same unit of fuel further supports favorable economics while
also promoting sustainability.
About FuelCell Energy
Direct FuelCell(R) power plants are generating ultra-clean, efficient and
reliable power at more than 50 locations worldwide. With approximately 300
megawatts of power generation capacity installed or in backlog, FuelCell
Energy is a global leader in providing ultra-clean baseload distributed
generation to utilities, industrial operations, universities, municipal
water treatment facilities, government installations and other customers
around the world. The Company's power plants have generated more than one
billion kilowatt hours of ultra-clean power using a variety of fuels
including renewable biogas from wastewater treatment and food processing, as
well as clean natural gas. For more information please visit our website at