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FuelCell Energy (Nasdaq:FCEL) Announces Market Development Updates in Asia for Efficient and Environmentally Friendly Fuel Cell Power Generation

  • Construction started for South Korean fuel cell manufacturing facility
  • Growing Asian demand for ultra-clean, efficient and reliable distributed generation
  • POSCO Energy and FuelCell Energy enter into a Master Service Agreement for Asian fuel cell power plant installations

DANBURY, Conn.FuelCell Energy, Inc. (Nasdaq:FCEL), a global leader in the design, manufacture, operation and service of ultra-clean, efficient and reliable fuel cell power plants, today announced a series of updates with its South Korean partner, POSCO Energy, including the start of construction for the South Korean fuel cell manufacturing facility, growing demand for multi-megawatt fuel cell installations, and the execution of a master service agreement for installations in Asia.

POSCO Energy is licensed to manufacture Direct FuelCell® power plants in South Korea and commenced construction of the previously announced manufacturing facility. The facility will serve Asian markets and is expected to be producing in 2015 with an initial capacity of 100 megawatts (MW) per year and capacity will be increased as demand supports. Industrial engineering enhancements at the FuelCell Energy (FCE) production facility in North America increased total production capacity to 100 megawatts annually and these enhancements will be incorporated into the South Korean production process, accounting for the increased production capacity compared to previously stated figure of 70 MW annually.

Increasing production volume leads to lower product costs for both FuelCell Energy and POSCO Energy as a globally integrated supply chain serves all the manufacturing facilities, including this new facility in Pohang, South Korea as well as existing production facilities in Torrington, Connecticut, USA and Ottobrunn, Germany. Greater purchasing volume and enhanced predictability of demand reduces material costs.

The South Korean market is adopting large-scale fuel cell parks and the project pipeline of POSCO Energy is oriented towards multi-megawatt installations composed of two to twenty power plants per site. The fuel cell parks supply continuous ultra-clean power to the electric grid near the point of use and can supply steam or hot water to district heating systems.

“Highly efficient and low emission fuel cells are meeting the needs of power generators in South Korea and we are discussing more multi-megawatt projects in the second year following the adoption of the renewable portfolio standard,” said Jung-Gon Kim, Senior Vice President, POSCO Energy.

“We value our relationship with POSCO Energy as they are an excellent partner for expanding the Asian market based on their commitment, their power generation expertise and the resources that they are investing in market development such as the production facility in Pohang, South Korea,” said Chip Bottone, President and Chief Executive Officer. “As we discuss multi-megawatt projects with prospective customers and project investors in North America and Europe, it is helpful to have a strong partner in Asia to provide validation of the market opportunities.”

The Gyeonggi Green Energy 59 MW fuel cell park illustrates the scale and the ability to rapidly construct multi-megawatt fuel cell installations. Construction began in December 2012 and all twenty one of the DFC3000® fuel cell power plants are installed and operating, undergoing commissioning or being prepared for commissioning. Sixteen of the plants are operational, producing ultra-clean electricity for the South Korean electric grid and usable high quality heat for a district heating system. Full operation is expected by the end of 2013 or early 2014. This park is a global model demonstrating ultra-clean and efficient power generation that can improve the resiliency of the electric grid due to the ability to easily site fuel cell power plants throughout an electric utility service area.

High urban population densities, costly imported fuels and adoption of a visionary renewable portfolio standard support the demand for clean and efficient distributed generation including fuel cells. POSCO Energy is witnessing an increase in inquiries for multi-megawatt installations, including:

  • Seoul City, the capital of South Korea, previously announced a program to install 230 megawatts of fuel cell power plants to enhance power independence with an efficient and environmentally friendly distributed power generation solution. Seoul City is moving forward with Korea Hydro and Nuclear Power (KHNP), an electric utility, to procure and install the first stage of fuel cell power plants totaling 120 MW beginning with a 20 MW fuel cell park. This fuel cell park will be located on a former municipal landfill that has been converted to a new and renewable energy park containing a solar power array and a hydrogen fueling station utilizing landfill gas. The fuel cell park will use clean natural gas to generate low carbon and virtually pollutant free electricity adequate to power approximately 43,000 households and heat adequate for 9,000 households and is expected to be fully operational by the end of 2014.
  • The first phase of the South Korean Renewable Heat Obligation (RHO) beginning in 2016 requires new commercial building construction exceeding 10,000 square meters to contain on-site new & renewable power generation such as combined heat and power fuel cell plants. The program goals are to reduce the emission of greenhouse gases and support economic growth through clean energy adoption.  The second phase begins in 2020 and expands the requirement to buildings of 5,000 square meters or larger. POSCO Energy has two sub-megawatt Direct FuelCell® products for on-site applications and the high urban density of South Korea supports the servicing of sub-megawatt as well as multi-megawatt installations. The population is concentrated in urban areas and on-site power requirements account for approximately 60 percent of total energy use in metropolitan areas such as Seoul City, highlighting the size of the potential market.
  • Liquefying and transporting natural gas results in some leakage of the gas, termed boil-off gas. POSCO Energy recently signed a contract with Korea Gas Corporation (KOGAS), the world’s largest LNG importer, for a demonstration project at the Samcheok LNG terminal to utilize boil-off gas to generate ultra-clean power, rather than letting the gas escape or incurring the cost to re-liquefy the gas. This project is intended to be the initial step in developing multi-megawatt fuel cell parks at LNG facilities to generate electricity for the LNG operations and to supply to the electric grid. The market potential is sizeable as POSCO estimates a 600 megawatt LNG opportunity in just South Korea.
  • The South Korean Ministry of Trade, Industry and Energy (MOTIE) recently announced a plan to introduce the second phase of the Renewable Portfolio Standard, expanding compliance obligations to major commercial energy users such as the information technology and heavy industry sectors, with implementation expected in 2016. POSCO Energy anticipates a significant market opportunity will develop that has even greater market potential than the large market opportunity from the current RPS program that is oriented towards power producers.

Service is an important facet of the fuel cell business model, both to serve the customer and to provide a source of stable and recurring revenue. Service agreements are up to 20 years in duration and include scheduled fuel cell module exchanges. FCE and POSCO Energy recently executed a revised Master Service Agreement whereby POSCO assumes more responsibility for servicing installations in Asia that utilize power plants manufactured by POSCO Energy. FCE will perform engineering and support services for each unit in the installed fleet and receive quarterly fees as well as a royalty on each scheduled fuel cell module exchange built by POSCO Energy and installed at any plant in Asia.

Fuel cells electrochemically convert a fuel source into electricity and heat in a highly efficient process that emits virtually no pollutants due to the absence of combustion. The Direct FuelCell® stationary fuel cell power plants manufactured by FuelCell Energy utilize carbonate fuel cell technology and provide continuous baseload power that is located where the power is used, including both on-site applications and electric grid support. The combination of near-zero pollutants, modest land-use needs, and quiet operating nature of these stationary fuel cell power plants facilitates locating the power plants in urban locations. The power plants are fuel flexible, capable of operating on natural gas, on-site renewable biogas, or directed biogas.

About FuelCell Energy

Direct FuelCell® 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 1.8 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 www.fuelcellenergy.com.

October 25, 2013 - 11:44 AM Comments: Closed

Van Hool & Ballard Presented with “ Ecology Award ” at Kortrijk Busw orld Europe Event

Ballard-Van Hook Ecology Award

Ballard Power Systems and its partner Van Hool have been presented with the “Ecology Award”, coincident with the Busworld Europe industry event held in Kortrijk, Belgium, http://kortrijk.busworld.org/ for successfully combining: (i) a new vehicle concept, with (ii) a high efficiency fuel cell hybrid driveline, and (iii) a high level of passenger comfort in a bus deployed in San Remo, Italy.

The competition was held on the eve of the Busworld Europe exhibition, involving six buses and twelve coaches. All participants were subjected to a number of tests and observations by teams of experienced field jury members.

Van Hool is a Belgian-based independent bus, coach and industrial vehicle OEM with a long history of innovation in fuel cell bus manufacturing. By 2014 the Company plans to have 27 buses – powered by Ballard fuel cell modules – operating in these European cities: Oslo, Norway (5 buses); Cologne, Germany (2); San Remo, Italy (5); Flanders, Belgium (5); and Aberdeen, Scotland (10).

Ballard anticipates powering 40 of the 50 zero emission fuel cell buses used in transit service on European roads in 2014, including the 27 Van Hool buses.

Increased volumes of fuel cell-powered buses are supporting cost reductions through scale economies in sourcing and manufacturing, enabling fuel cell solutions to compete more effectively with incumbent transit technologies.

Ballard’s FCvelocity®-HD7 will be the next-generation of fuel cell power module, designed specifically for integration into buses and reflecting improved durability, reliability along with significant cost reduction.

October 25, 2013 - 7:35 AM Comments: Closed

Acta Completes £2.1 Million Institutional Fundraising

Acta (AIM: ACTA), the clean energy products company, announces that the Company has, via an institutional placing (the ”Placing”), raised £2.1 million (gross) though the issue and allotment of 30,000,000 ordinary shares of Euro 0.006 each in the capital of the Company (“Placing Shares”).

The Placing Shares were placed at a price of 7 pence per share (the ”Placing Price”). The net proceeds of the Placing will be used to finance the working capital requirements of the Company’s current commercial expansion.

Background to, and reasons for, the Placing

At the time of the interim results for the six months ended 30 June 2013, announced on 30 September 2013, the Board was pleased to report that Acta’s product revenues, shipment numbers and average selling price were each increasing rapidly. Further key highlights included in the announcement were as follows:

  • In respect of sales and marketing:

o  The launch of the Acta Power: a hydrogen battery with autonomous refuelling;

o  The appointments of a sales partner for the SE Asia telecoms market along with  distribution partners for both the Indian and Chinese industrial gas and telecom back-up  power markets;

o  The first commercial sales of Acta Power and large electrolysers  achieved in India,  Indonesia, Africa and Taiwan;

o  The first Acta Power trials for telecom back-up power application in Australia, Africa and the  Philippines; and

o  The first repeat order for an Acta Power for operational evaluation in Africa.

  • In respect of operational and product development:

o  Development of the Acta Power based on Future-E fuel cell with Ballard stack;

o  Four-fold expansion of the Company’s production area;

o  Standardisation of product range on modular components;

o  Implementation of web interface for full remote system management and assistance; and

o  Recruitment of 14 new staff in commercial, production, engineering and installation.

The key development in 2013 has been the launch of the Acta Power in April 2013, which was born from the strategic decision to bring the Company’s own end-user product, an integrated hydrogen energy storage system, to market.  This product addresses the very substantial markets for telecom back-up power systems and distributed renewable energy storage.

The immediate commercial response to this product has been highly encouraging and Acta Power units have now been installed or are due to be installed into operational live site trials with various major mobile phone operators in Australia, Africa and the Philippines. Without exception, the initial feedback from the evaluations in progress has been positive. Additional negotiations are in progress for further trials in Malaysia for a potential large Government funded project to replace existing battery systems, Australia, Singapore and elsewhere, and the Board expects to be able to announce progress in these areas in due course.

The Company’s commercial metrics continue to improve, with increases in both volume and average unit price contributing to a strong improvement in revenues from system sales. In addition, there has also been an increase in the levels of repeat orders, with customers coming back for more and/or larger systems. The Board is particularly optimistic regarding potential sales of both the Acta Power system and the Company’s mid to large electrolysers over the next 18 months to two years.

The Board believes that the level of commercial interest that Acta’s products are continuing to attract clearly demonstrates the potential for Acta’s technology and that the Placing will provide new financing for continued business development that will allow the Company to continue to grow its commercial activities with existing customers and new commercial partners around the world.

Details of the Placing

The Placing has been supported by a combination of existing and new institutional investors, plus the Company’s Board members, each of whom has participated in the Placing for a total subscription of £33,000 in aggregate, as follows:

Subscription
Paolo Bert CEO £10,000
Paul Barritt CFO £10,000
Robert Drummond Non Executive £3,000
Aldo Filippini Non Executive £5,000
Rodney Westhead Non Executive £5,000

The Placing utilises the Company’s authority to issue up to 50,000,000 new ordinary shares that was granted on 3 July 2013. The Placing is not underwritten and is subject to, inter alia, admission of the Placing Shares to trading on AIM (“Admission”).

The Placing Shares represent approximately 17.6% of the fully diluted share capital as enlarged by the Placing.

Admission and dealing arrangements

Application has been made to the London Stock Exchange for Admission of the Placing Shares. It is expected that dealings in the Placing Shares will commence at 8.00 a.m. (London time) on 30 October 2013. Following the Admission of the Placing Shares, the issued share capital of the Company will be 170,431,939 ordinary shares.

The Placing Shares will be issued credited as fully paid and will rank pari passu in all respects with the existing ordinary shares, including as to the right to receive and retain all dividends and other distributions declared, made or paid after Admission.

Outlook

The net proceeds of the Placing will be utilised alongside grant funding due to be received during 2014 to finance the continued growth of the Company’s commercial activities with existing customers and new commercial partners around the world. Based on existing financial resources, expected grant receipts and the proceeds of the Placing, the Board believes that the Company has sufficient capital available to finance the working capital requirements of the Company’s current business plan as it expands its commercial and production activities over the next year.

The Board is confident that Acta has a market leading range of innovative hydrogen generator products with a wide range of commercial applications, demonstrated by the recent level of product orders and commercial development partnerships recently announced and looks forward to notifying the market of the Company’s further commercial progress in due course.

Paolo Bert, Chief Executive of Acta commented: “We are delighted with our commercial success and the fundraising will strengthen Acta’s cash resources as we expand our operational capacity to keep pace with the growing demand for our products.  We are grateful for the continued support of our shareholders, which will help to drive the already increasing adoption of the Acta Power system in back-up power and renewable energy storage applications.”

October 25, 2013 - 7:31 AM Comments: Closed

Unique chemistry in hydrogen catalysts

This hydrogen-generating cluster of iron (brown) and sulfur (yellow) atoms, with side groups of carbon monoxide (gray/red) and cyanide (gray/blue), could be a key to future fuel sources. (Protein Data Bank/courtesy graphic)

Making hydrogen easily and cheaply is a dream goal for clean, sustainable energy. Bacteria have been doing exactly that for billions of years, and now chemists at the University of California, Davis, and Stanford University are revealing how they do it, and perhaps opening ways to imitate them.

A study published Oct. 25 in the journal Science describes a key step in assembling the hydrogen-generating catalyst.

“It’s pretty interesting that bacteria can do this,” said David Britt, professor of chemistry at UC Davis and co-author on the paper. “We want to know how nature builds these catalysts — from a chemist’s perspective, these are really strange things.”

The bacterial catalysts are based on precisely organized clusters of iron and sulfur atoms, with side groups of cyanide and carbon monoxide. Those molecules are highly toxic unless properly controlled, Britt noted.

The cyanide and carbon monoxide groups were known to come from the amino acid tyrosine, Britt said. Jon Kuchenreuther, a postdoctoral researcher in Britt’s laboratory, used a technique called electron paramagnetic resonance to study the structure of the intermediate steps.

They found a series of chemical reactions involving a type of highly reactive enzyme called a radical SAM enzyme. The tyrosine is attached to a cluster of four iron atoms and four sulfur atoms, then cut loose leaving the cyanide and carbon monoxide groups behind.

“People think of radicals as dangerous, but this enzyme directs the radical chemistry, along with the production of normally poisonous CO and CN, along safe and productive pathways,” Britt said.

Kuchenreuther, Britt and colleagues also used another technique, Fourier Transform Infrared to study how the iron-cyanide-carbon monoxide complex is formed. That work will be published separately.

“Together, these results show how to make this interesting two-cluster enzyme,” Britt said. “This is unique, new chemistry.”

Britt’s laboratory houses the California Electron Paramagnetic Resonance center (CalEPR), the largest center of its kind on the west coast.

Other authors on the paper are: at UC Davis, postdoctoral researchers William Myers and Troy Stich, project scientist Simon George and graduate student Yaser NejatyJahromy; and at Stanford University, James Swartz, professor of chemical engineering and bioengineering. The work was supported by grants from the U.S. Department of Energy.

About UC Davis

For more than 100 years, UC Davis has engaged in teaching, research and public service that matter to California and transform the world. Located close to the state capital, UC Davis has more than 33,000 students, more than 2,500 faculty and more than 21,000 staff, an annual research budget of nearly $750 million, a comprehensive health system and 13 specialized research centers. The university offers interdisciplinary graduate study and more than 100 undergraduate majors in four colleges — Agricultural and Environmental Sciences, Biological Sciences, Engineering, and Letters and Science. It also houses six professional schools — Education, Law, Management, Medicine, Veterinary Medicine and the Betty Irene Moore School of Nursing.

October 25, 2013 - 6:55 AM Comments: Closed

FuelCell Gains as Posco Begins Building South Korea Factory

Justin Doom–Bloomberg

FuelCell Energy Inc., (FCEL) the biggest publicly traded U.S. fuel-cell manufacturer, advanced the most in five months after Posco (005490), its largest shareholder, began construction on a South Korea factory that will manufacture its power systems.

FuelCell rose 12 percent to $1.49 at the close in New York, the most since May 24.

Posco, South Korea’s largest steelmaker, is building a factory that’s expected to begin production in 2015 with an initial annual capacity of 100 megawatts, Danbury, Connecticut-based FuelCell said in a statement today. Posco has licensed FuelCell’s technology and plans to sell them throughout Asia.

FuelCell’s systems convert natural gas into electricity through a chemical process.

October 25, 2013 - 6:16 AM Comments: Closed