The license agreement includes an upfront license fee to FuelCell Energy of US$10 million, which was paid on signing, as well as an ongoing royalty, initially set at 4.1% of the revenues generated by sales of the fuel cell stack modules by POSCO Power. In addition, POSCO Power completed its previously announced purchase of $25 million in FuelCell Energy common stock.
Direct FuelCell® (DFC®) fuel cell power plants already generate electricity directly for Korea’s power grid. As part of a drive to establish fuel cell technology as the country’s leading form of alternative energy, POSCO Power has ordered more than 68 MW worth of FuelCell Energy’s DFC units to date, and has built a facility to manufacture balance-of-plant systems in Korea.
Currently, approximately 23 MW of FuelCell Energy molten carbonate fuel cell power plants are installed in Korea, including six DFC3000 MW-class fuel cell power plants. Sites include POSCO Power’s headquarters and balance-of-plant manufacturing facility in Pohang; the paper company Natura; independent power producers HS Holdings and MPC; and electric utilities KOMIPO, KOSEP, and EWP, which are members of the KEPCO group.
South Korea has committed 2% of its gross national product to clean energy projects – more than any other developed country. Currently, Korea is pursuing the passage of an $85.8 billion renewable energy plan that includes a renewable portfolio standard (RPS) mandating 11% clean energy by 2030 – a total of 7150 MW – which further increases the market potential for DFC fuel cell power plants from FuelCell Energy.
Under the agreement, POSCO Power will manufacture fuel cell modules from components and cells manufactured in the US by FuelCell Energy, in a new facility it intends to construct adjacent to its current fuel cell balance-of-plant operation in Pohang. FuelCell Energy will provide training for POSCO Power personnel.