On August 27th POSCO Energy announced that it has agreed to extend the long-term maintenance and repair contract with Gyeonggi Green Energy.
After lengthy negotiations, Gyeonggi Green Energy agreed to and signed a 15-year long-term maintenance contract worth W157.5bn. The long term service agreement (LTSA) guarantees that POSCO Energy a contract totalling 5 years and 1.5 billion won per Gyeonggi Green Energy fuel cell facility.
This is good news for POSCO Energy as this contract renewal provides the basis to negotiate a smooth LTSA renewal agreements with 20 other fuel cell generators. Gyeonggi Green Energy new LTSA service contract will including the replacement of aging stacks.
POSCO Energy has seen a cumulative deficit of about 600 billion won over the past 10 years as the fuel cell stacks did not perform as well as expected, the stacks were imported from Fuel Cell Energy (FCE) and installed at POSCO’s power generation customers. Both POSCO and FuelCell Energy settled their issues and through continuous improvement to the fuel cell products have now been very effective. In fact, the fuel cell power generation facilities of Noe Green Energy Co., Ltd., which was installed in Sangam-dong, Seoul, in December 2016, are known to have no further problems.
Posco Energy through its fuel cell hub in Pohang has the world’s largest and Asia’s first manufacturing facility.