U.S-based FuelCell Energy Inc., a manufacturer of ultra-clean fuel cell power plants that run on biogas, natural gas, coal gas and propane, announced on May 16 it will purchase equipment in Germany, and join with a partner to develop and expand the market for commercial-, industrial- and utility-scale stationary fuel cell power plants in Europe.  

FuelCell Energy Solutions GmbH, the company’s German unit, will buy “select assets” from MTU Friedrichshafen GmbH – which is selling off the fuel cell component inventory and fuel cell manufacturing equipment of MTU Onsite Energy GmbH Fuel Cell Systems, a company with which it has recently merged.

Parties to the agreement include FuelCell Energy Inc. (FCE), FuelCell Energy Solutions GmbH (FCES), MTU Friedrichshafen GmbH (MTU) and Fraunhofer (News - Alert) IKTS (Institute for Ceramic Technologies and Systems).

Under the agreement, MTU will contribute fuel-cell related intellectual property to Fraunhofer IKTS. Fraunhofer IKTS will become a minority owner in FuelCell Energy Solutions by the end of next month – as well as a partner in the European joint venture, geared to expand the fuel cell market on the Continent.

Local manufacturing capacity will be established at a facility formerly leased by MTU in Ottobrunn, Germany, keeping advanced technology fuel cell power plant manufacturing in Germany.

In addition, FCE will execute its business activities for the larger European Served Area from its bases of operations in Dresden and Ottobrunn, using locally hired sales, service, engineering and manufacturing personnel. It is anticipated that FuelCell Energy Solutions will enter into service agreements with existing MTU fuel cell customers

"Leveraging the technology strength of Fraunhofer and the commercial strength and experience of FuelCell Energy, FuelCell Energy Solutions now has a clear path for market development and local manufacturing that will drive job creation in Europe," said Prof. Dr. Alexander Michaelis, director at Fraunhofer IKTS. "We are eager to apply our R&D capabilities to the Direct FuelCell technology and work with European governments and industry to support the adoption of stationary fuel cell power plants that help address the power generation challenges facing certain regions of Europe."

"This effort is a crucial part of FuelCell Energy's previously announced global growth strategy, leveraging prior relationships with MTU as well as an expanding relationship with Fraunhofer IKTS," said Chip Bottone, president and CEO at FuelCell Energy, Inc. "The agreement with MTU provides assets that will accelerate market development while optimizing current and future capital needs from FuelCell Energy, so future investment will be predicated on order flow and a growing installed base."

"This agreement and the ramp-up of FCES will enable cost-effective large-scale fuel cell technology to become available today, for commercial applications throughout Europe,” Bottone added. “We are building on the strength and leadership shown by the vision of the German government, and bringing the experience which comes from over 180 megawatts of commercial installations and order backlog worldwide."

FuelCell  Energy Solutions will continue R&D efforts to further enhance carbonate fuel cell technology, combining the strength of FCE's Direct FuelCell power plants and the carbonate "EuroCell" technology of MTU, licensed into FCES by Fraunhofer IKTS.

MTU and FuelCell Energy have previously maintained various license agreements for fuel cell technology, including a two-way license related to balance of plant technology, and a license from FCE to MTU related to core fuel cell technology.

MTU developed and sold stationary fuel cell power plants in Europe using Direct FuelCell carbonate technology and DFC components manufactured by FuelCell Energy at its plant in Torrington, Connecticut. MTU assembled and stacked the DFC components and added the mechanical and electrical balance of plant. The agreements expired at the end of 2009.

DFC power plants cost effectively provide on-site power and support to the electric grid. The leveled cost of electricity for DFC plants is competitive with the electric grid in regions with high power costs, such as urban centers in Europe, coastal cities in the USA and certain Asian countries.

Increasing sales volume will continue to result in lower power generation costs for DFC plants. Examples of grid support applications include two fuel cell parks operating in Asia – each in excess of 10 megawatts – as well as DFC plants in the United States  owned by utilities and located on the property of the end power user.