FuelCell Energy Gets Its Largest Order Ever

The largest fuel cell contract has been signed between South Korea’s POSCO Energy and FuelCell Energy.
Published: Thu 08 Nov 2012

What happened  

South Korea’s largest independent power producer, POSCO Energy, has made a multi-year US$181m order for fuel cell kits and services with FuelCell Energy Inc. This is the largest order ever received by FuelCell Energy and any firm in the fuel cell industry, according to the firm’s president and CEO, Chip Bottone. The order will triple the firm’s product backlog and initiate its 2013 production levels.

Background

The 121.8MW of fuel cell kits form part of a 58.8MW project which will be located in South Korea. The project, the world’s largest fuel cell park, will help the country to meet the nation’s energy demands, as well as that of other Asian countries. Construction is due to start this year sometime. The ownership of the 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.

The fuel cell kits will be manufactured at FuelCell Energy’s production facility in Torrington, Connecticut.The first delivery of kits is scheduled for May 2013, ensuring an uninterrupted supply as deliveries, under an existing 70MW order, will end in April 2013, writes Power Engineering. Each kit consists of 1.4MW of fuel cell components that are interchangeable and can be used for megawatt class fuel cell power plants or sub-megawatt plants.

South Korea adopted an ambitious Renewable Portfolio Standard (RPS) in 2012 to promote clean energy, cut 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. This includes the new fuel cell park.

The RPS requires that the country’s 14 power utilities, with capacities over 500MW, generate 4% of energy from renewable sources by 2015. This will increase to 10% by 2022. Effective as of 2012, this program will mandate an additional 350 MW per year of renewable energy capacity until 2016, and 700 MW per year thereafter. In addition to this, all renewable energy technologies receive a 5% tax credit. Government subsidies are also available to local governments of up to 60% for the installation of renewable facilities. They also receive low interest loans (5.5%-7.5%) for renewable projects.

South Korea’s market acceptance for fuel cell power generation should be replicated throughout the world

Chip Bottone, President and Chief Executive Officer, FuelCell Energy, Inc. points out: "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."    

FuelCell Energy Inc

FuelCell Energy, Inc. is a global leader in the design, manufacture, operation and service of ultra-clean, efficient and reliable fuel cell power plants. The firm develops and commercializes fuel cell power plants for electric power generation. The firm also has contracts to develop its fuel cells for the use of alternative fuels.         

Sources               

Globe Newswire-FuelCell Energy Announces 121.8 Megawatt Order, Largest Ever Received by the Company and the Fuel Cell Industry

Power Engineering-Multi-year contract signed for fuel cell kits in South Korea

Reegle-South Korea(2012)

Trading Charts-Stock to Watch: FuelCell Energy Up 17.0%