Officials at FuelCell Energy Inc. announce an order from its South Korean partner, POSCO Energy for 121.8MW of fuel cell kits and services to be manufactured at the FuelCell Energy production facility in Torrington, CT. 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 58.8MW project located in South Korea," says Jung-Gon Kim, senior vice president, POSCO Energy. "This order to FuelCell Energy for 121.8MW will help us meet demand in South Korea as well as other Asian countries."
"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," says Chip Bottone, president and CEO, 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 58.8MW 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,"
comments Tony Rauseo, COO, 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 sub-megawatt plants.
"Production from this order, combined with production for scheduled restacks under existing service agreements, generates annual committed production of approximately 50MW to 55MW, which is the level needed for the company to achieve quarterly positive gross margins," Bottone says.