Hartford Business Journal

16 Hartford Business Journal • May 20, 2019 • www.HartfordBusiness.com By Matt Pilon mpilon@hartfordbusiness.com C onnecticut's homegrown fuel cell industry suffered a major blow last month when Danbury-based Fu- elCell Energy announced it would eliminate nearly one-third of its 431 jobs here. That news invited fresh skepticism and concern about an industry that last year employed nearly 1,000 people in the state, according to one estimate. Fuel cells, while growing in number in the U.S. and Asia, remain a relatively niche and unprofitable technology, despite more than 20 years of commercial sales. A Bloomberg story last month said FuelCell Energy, which has accumulated more than $1 billion in losses since the 1990s and whose stock price has plum- meted, is "running out of time" and needs a major capital infusion. Bloom- berg quoted one stock analyst who described "furious" investors, and said fuel cells, which produce relatively low- emissions energy virtually around the clock, have often had to compete with the falling costs of intermittent renew- ables like solar panels and wind turbines. However, while fuel cell makers share some common struggles, Fuel- Cell Energy's plight doesn't necessar- ily forecast an industry death march. On the other side of the state in South Windsor, at Doosan Fuel Cell America — formed in 2014 when South Korea- based Doosan Corp. acquired ClearEdge, a successor of UTC Power — company officials struck an optimistic tone dur- ing a recent interview with HBJ. Doosan is a subsidiary of a global conglomerate that owns construction- equipment maker Bobcat and reported $15.2 billion in total 2018 revenue. That kind of corporate backing can benefit any manufacturer, particularly in fuel cells, where sales can fluctuate and it can take years for projects to generate revenue. The parent com- pany connection can also help when pitching to potential customers, said Michael Coskun, Doosan's general manager of sales and business devel- opment. "You walk through the door and the first slide says 'we're a $16 billion con- glomerate.' That already should put a lot of people at ease," Coskun said. Clean-energy news website Green- tech Media reported this month that no public company focused primarily on fuel cell manufacturing has ever posted an annual profit on a GAAP ac- counting basis. However, Doosan Corp.'s annual audited financial reports show that its American fuel cell business was profitable in both 2015 and 2017. Doosan's disclosures also show its American fuel cell business has seen revenues jump from $124.8 million in 2015 (converted using recent Korean Won exchange rates) to $204.6 million in 2017. Korean companies like Doosan, which trades on the Korean Exchange, don't use GAAP accounting. Robust pipeline Coskun and his colleague David Gior- dano, a Doosan government relations and business development executive, say they are bullish about a series of pend- ing Doosan projects in Connecticut, including a state-awarded 20-megawatt development that will power a proposed data center in New Britain. The fuel cells at the data-center site are expected to be operational by 2020, according to the developer. Doosan fuel cells will also help power water-treatment facilities in Bristol and Fairfield, adding to three fuel cells that went live last year at Waterbury's waste- water plant. They're also hopeful about win- ning new business from UConn and the Connecticut State Colleges and Universities system, which are also seeking to install the technology. Since acquiring ClearEdge five years ago for just over $32 million, Doosan has invested in improving the company's South Windsor plant, and several years ago completed construction on a second fuel cell factory in South Korea, which can produce approximately 63 megawatts of fuel cell energy annually, the same amount as the South Windsor plant. The rollout of hydrogen fuel cell cars by Toyota and Honda could also raise the technology's profile, Giordano and Coskun hope. While Connecticut, California and Doosan's growing fuel cell portfolio Total megawatts (MWs) installed globally 160 Total MWs installed in U.S. 45 (includes CT) Total MWs installed in CT 18 Total MWs in the pipeline globally 235 Total MWs in the pipeline in CT 30 Source: Doosan Fuel Cell America Power Glitch Amid FuelCell Energy's capital crunch, Doosan reports steady progress Doosan Fuel Cell America's annual revenue 2015 2016 2017 $0 $50 $100 $150 $200 $250 In millions of dollars $124.8M $167.2M $204.6M $124.8M $167.2M $204.6M Source: Doosan Corp. audited reports Note: Doosan reports revenue in Korean Won. Amounts have been converted to USD using recent exchange rates. HBJ PHOTO | MATT PILON Michael Coskun (left) and David Giordano, business development executives at Doosan Fuel Cell America, say business at the South Windsor plant is steady, with some bright spots on the horizon.

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