Yahoo Finance FuelCell Energy (FCEL) Signs Deal With POSCO, Expands in Asia
FuelCell Energy FCEL announced that it has signed an agreement with POSCO Energy Co., Ltd. and its subsidiary, Korea Fuel Cell Co., Ltd., (POSCO) to exclusively sell its different fuel cell platforms to customers in Asia.
The agreement will grant POSCO the right to service the existing installed POSCO customer base, but it will enjoy no other rights to FuelCell Energy technology in South Korea or broader Asian markets. The agreement also provides for a firm order for a minimum of 20 SureSource replacement modules to service the existing South Korean operating projects during the calendar year 2022.
Prospects of Fuel Cell in Asian Markets
Per a report from Mordor Intelligence, the Asia-Pacific fuel cell market is expected to witness a CAGR of over 17% during the 2020-2025 time period. Increasing concerns about the impact of emissions on the environment have prompted investments in clean fuel cell technologies.
The demand for portable and stationary fuel cells is on the rise across major Asian countries. The demand for fuel cells is expected to primarily come from China, India, South Korea and Japan. FuelCell Energy’s decision to sell its products in Asia is well timed as the demand for reliable clean energy sources is rising in Asian countries.
FuelCell Energy already has a presence in the Asian market and provides power to electric grid or utility substations, increasing grid resiliency and making the grid less dependent on large pollution-generating plants.
Increasing Acceptance of Fuel Cell
The fuel cell technology can produce clean electricity relentlessly as long as fuel is provided in the fuel cell systems. The primary concern regarding the mass scale commercial usage of the fuel cell technology is cost and durability of operation. The Department of Energy and industry partners are involved in research and development activities to lower the cost of manufacturing hydrogen and fuel cell components.
Companies like Bloom Energy Corporation BE, Plug Power Inc. PLUG, and Ballard Power Systems Inc. BLDP, among others, are involved in research and development activities to make hydrogen fuel cell economical for mass population.
Bloom Energy’s Hydrogen Energy Servers, 100% hydrogen-powered fuel cells, will be available for commercial usage to customers. The fuel cell modules will be able to supply carbon-free electricity at the premises of customers and the commercial shipment of the same will begin from 2022. Bloom Energy’s long-term (three to five years) earnings growth is pegged at 25%.
Last month, Plug Power Inc. entered into a contract with Fertiglobe and its partners, Sovereign Fund of Egypt, Scatec ASA and Orascom Construction, to provide electrolysis technology for a 100 megawatts electrolyzer. Plug Power recently closed the buyout of Applied Cryo Technologies, Inc., which will assist PLUG to strengthen its green hydrogen ecosystem and reduce costs related to hydrogen infrastructure and logistics networks.
In November 2021, Ballard Power Systems launched a three-year project through collaboration with Caterpillar Inc. and Microsoft to demonstrate a power system incorporating large-format hydrogen fuel cells to produce reliable and sustainable backup power for data centers.
Price Performance
Shares of FuelCell Energy have underperformed the industry in the past three months.
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Zacks Rank
FuelCell Energy currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Buy) stocks here.
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