FuelCell Energy Inc (FCEL)

[Maximilliano]

FCEL needs another large MW deal with KOSPO in South Korea to shore up cash. As mentioned in the 4th Quarter CC:

South Korea is a large near-term market opportunity. KOSPO owns 9 gigawatts of generation assets alone and this 20MW facility is their first fuel cell project. The government's Renewable Portfolio Standard or RPS obligates the country's 18 largest power generators to achieve the RPS requirements in their generation or purchase offsetting renewable energy certificates, which is driving increased activity in our direction. Our team is actively pursuing many opportunities in this market.

Non compliance with annual RPS targets has a financial penalty of 150% of an average REC price on every REC missing.

Yearly RPS target (% of RE power generation:

2018 @ 5% 2019 @ 6% 2020 @ 7% 2021 @ 8% 2022 @ 9% 2023 @ 10%

The business models for our markets in South Korea and the U.S. are complementary. In Korea, the transactions tend to be outright equipment sales with short execution cycles and long-term service agreements.