FuelCell Energy Announces Strengthening of Strategic Relationship With POSCO Energy Supporting Global Market Development and Product Cost Reductions
Collaboration on development of global customer opportunities -- Integrated global supply chain agreement enhances reliability of supply and supports product cost reductions -- FuelCell Energy sells 5.6 megawatts of fuel cell modules to POSCO Energy to meet growing Asian demand
DANBURY, Conn., May 13, 2014 -- FuelCell Energy, Inc.
service of ultra-clean, efficient and reliable fuel cell power plants,
announced further steps to accommodate the increasing global demand for
megawatt-class stationary fuel cell power plants, ensuring preeminent
customer support around the world as well as enhanced execution of product
cost reductions. FuelCell Energy and POSCO Energy are collaborating to
support multi-national customers expressing interest in fuel cell projects
in the other partner's territory, are further synchronizing the integrated
global supply chain, and executing the sale of four fuel cell modules,
totaling 5.6 megawatts to meet rising demand in Asia.
"Even closer collaboration between POSCO Energy and FuelCell Energy ensures
that our respective customers receive the enhanced value and security for
their investment as we reduce costs and further enhance the overall
competitiveness of clean distributed fuel cell power generation," said
Jung-Gon Kim, Senior Vice President of POSCO Energy.
Increasing interest in stationary fuel cell applications in different
geographic regions from companies with global operations has led to the
broadening of activities between FuelCell Energy and POSCO Energy.
Enhanced collaboration accommodates North American, European or other
non-Asian customers of FuelCell Energy that are interested in a fuel cell
installation in Asia as well as Asian customers of POSCO Energy that desire
a fuel cell installation outside of Asia. With growing global adoption of
Direct FuelCell(R) power plants, trends to larger-sized fuel cell parks, and
cross-territorial interest from multi-national customers, FuelCell Energy
and POSCO Energy can support global customers in each other's local market
to ensure consistency of communication, quality and execution.
The construction of the POSCO Energy cell manufacturing facility is on
schedule with production expected in mid-2015. Once operational, this
facility will double the global manufacturing capacity of FuelCell Energy's
proprietary power plants.
The integrated global supply chain agreement reaffirms the global supply
chain alignment, which is critical for expected product cost reductions.
Decreasing product costs supports further market adoption as well as margin
expansion. The combined purchasing volume of both organizations results in
both partners benefitting from purchases by each other through lower product
costs. By leveraging the existing supply advantages of both companies,
including POSCO's steel manufacturing capabilities and mining operations,
FuelCell Energy will realize enhanced security of supply and increasing
production volumes in any one region benefits both partners with lower
product costs globally.
"The relationship we have with POSCO Energy is a differentiator in the fuel
cell industry as we work together to continue to grow the market while
further driving down product costs and improving project financial returns,"
said Chip Bottone, President and CEO of FuelCell Energy. "As a leading
global steel manufacturer, POSCO's investment in market development,
manufacturing capacity, and partial ownership in FuelCell Energy are
additional points of validation for our affordable, ultra-clean, and secure
power generation solutions while manufacturing in more than one location
mitigates risk for the customer base."
During the second quarter of 2014, FuelCell Energy sold four fuel cell
modules totaling 5.6 megawatts to POSCO Energy. These modules are in
addition to the monthly fuel cell kit shipments under an existing 122
megawatt order. This second quarter 2014 5.6 megawatt module purchase, as
well as the previously announced first quarter 2014 2.8 megawatt module
purchase, will both support new installations that POSCO is completing this
calendar year for its customers in Korea.
"The timing of these module orders supports specific projects in Asia as the
ability to construct multi-megawatt fuel cell parks in short time frames of
about a year is a differentiator in the power generation market and the
short construction period helps to minimize capital costs," continued Mr.
Bottone. "The ability to rapidly construct a fuel cell park of ten to sixty
megawatts enables utilities to add clean baseload power where they need it
within their service territory while avoiding the cost and permitting
challenges of transmission lines."
POSCO Energy is a wholly owned subsidiary of POSCO, a leading global steel
producer headquartered in Pohang, South Korea. POSCO Energy is an
independent power producer with power generation assets in South Korea that
provide power to POSCO and to the electric grid. POSCO Energy owns more than
3,000 megawatts of power generation including generation assets in Southeast
Asian countries including Indonesia and Vietnam, as well as a solar park in
Nevada, USA. POSCO Energy 2013 sales totaled
$2.8 billion supported by total capital of $1.5 billion. The parent, POSCO,
is publicly traded on the Korean Stock Exchange under the symbol
005490 and on the New York Stock Exchange under the symbol PKX.
Multi-megawatt fuel cell parks solve power generation challenges for
utilities as the combination of near-zero pollutants, modest land-use needs,
and the quiet operating nature of fuel cell power plants facilitates their
siting in urban locations. Fuel cell parks offer a multitude of advantages
for utilities and neighboring communities,
-- Environmentally friendly power generation with virtually zero nitrogen
oxide (NOx) that causes smog, sulfur dioxide (SOx) that contributes to
acid rain, or particulate matter (PM10) that aggravates asthma, and the
power is delivered with a low carbon footprint
-- Distributed power generation places power near where it is used,
enhancing the resiliency of the grid
-- Highly efficient power generation process that is economical
-- Continuous renewable power around the clock that is not reliant on
weather or time of day
DFC(R) power plants utilize carbonate fuel cell technology, which is well
suited for megawatt-class applications due to the scalability and favorable
cost profile. Another advantage is that carbonate cells operate efficiently
without the need for noble metal catalysts, such as platinum, which are
required by some other types of fuel cell technology.
About FuelCell Energy
Direct FuelCell(R) power plants are generating ultra-clean, efficient and
reliable power at more than 50 locations worldwide. With more than
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 two
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