Editing FuelCell Energy, Inc.
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== Company Overview == | == Company Overview == | ||
== FuelCell Energy, Inc. (FCE | == FuelCell Energy, Inc. (FCE, together with its subsidiaries, designs, manufactures, sells, installs, operates, and services stationary fuel cell power plants for distributed base-load power generation. It offers SureSource1500, a 1.4-megawatt (MW) platform; SureSource 3000, a 2.8 MW platform; SureSource 4000, a 3.7 MW platform; SureSource 250, a 250-kilowatt (kW) platform; SureSource 400, a 400-kW platform; and SureSource Hydrogen, a 2.3 MW platform that is designed to produce up to 1,200 kilograms of hydrogen per day for multi-megawatt utility, microgrid, and distributed hydrogen applications, as well as on-site heat and chilling applications. == | ||
It also provides a SureSource Capture system that separates and concentrates carbon dioxide from the flue gases of natural gas, biomass, or coal-fired power plants, as well as industrial facilities; solid oxide fuel cell/solid oxide electrolysis cell stack technology. The company's SureSource power plants generate clean electricity, usable heat, water, and hydrogen. | It also provides a SureSource Capture system that separates and concentrates carbon dioxide from the flue gases of natural gas, biomass, or coal-fired power plants, as well as industrial facilities; solid oxide fuel cell/solid oxide electrolysis cell stack technology. The company's SureSource power plants generate clean electricity, usable heat, water, and hydrogen. In addition, it provides engineering, procurement, and construction services; project financing services; real-time monitoring and remote operation, online support system, preventative maintenance, parts and supplies, on-site and classroom training, and power plant refurbishment/recycling services, as well as technical services in the areas of plant operation and performance, and fuel processing. It serves various markets, including utilities and independent power producers, industrial and process applications, education and health care, data centres and communication, wastewater treatment, government, microgrids, food and beverage, and commercial and hospitality. The company primarily operates in the United States, South Korea, England, Germany, and Switzerland. FuelCell Energy, Inc. was founded in 1969 and is headquartered in Danbury, Connecticut. | ||
In addition, it provides engineering, procurement, and construction services; project financing services; real-time monitoring and remote operation, online support system, preventative maintenance, parts and supplies, on-site and classroom training, and power plant refurbishment/recycling services, as well as technical services in the areas of plant operation and performance, and fuel processing. | |||
It serves various markets, including utilities and independent power producers, industrial and process applications, education and health care, data centres and communication, wastewater treatment, government, microgrids, food and beverage, and commercial and hospitality. The company primarily operates in the United States, South Korea, England, Germany, and Switzerland. FuelCell Energy, Inc. was founded in 1969 and is headquartered in Danbury, Connecticut. | |||
== About == | == About == | ||
FuelCell Energy Inc. founded in 1969 and headquartered in Danbury, Connecticut is an American energy company specialising in the design, manufacturing, operation, and maintenance of fuel cell power plants. Its proprietary fuel cell technology utilises carbonate fuel cells that are fuelled by renewable biogas to generate clean electricity. The company offers a range of fuel cell products, including stationary fuel cell power plants for electricity generation, hydrogen-based energy storage systems, and fuel cell solutions for electric mobility applications. Their technology focuses on reducing carbon emissions and providing reliable, efficient, and clean energy solutions. Fuel cell technology is considered a clean and efficient alternative to traditional energy sources, making it an attractive investment option for those interested in the renewable energy sector. | |||
FuelCell Energy Inc. founded in 1969 and headquartered in Danbury, Connecticut is an American energy company specialising in the design, manufacturing, operation, and maintenance of fuel cell power plants. Its proprietary fuel cell technology utilises carbonate fuel cells that are fuelled by renewable biogas to generate clean electricity. | |||
The company offers a range of fuel cell products, including stationary fuel cell power plants for electricity generation, hydrogen-based energy storage systems, and fuel cell solutions for electric mobility applications. Their technology focuses on reducing carbon emissions and providing reliable, efficient, and clean energy solutions. Fuel cell technology is considered a clean and efficient alternative to traditional energy sources, making it an attractive investment option for those interested in the renewable energy sector. | |||
The company targets utility companies, industrial companies, universities, municipal water treatment facilities, government facilities and other commercial entities as customers. It currently has over 50 U.S. patents and has installed over 50 megawatts of fuel cell systems worldwide. | The company targets utility companies, industrial companies, universities, municipal water treatment facilities, government facilities and other commercial entities as customers. It currently has over 50 U.S. patents and has installed over 50 megawatts of fuel cell systems worldwide. | ||
== Industry Outlook == | == Industry Outlook == | ||
The vast majority of hydrogen produced today is from the steam | The vast majority of hydrogen produced today is from the steam methan process - 95% in Europe (demaco-cryogenics.com/blog/steam-methane-reforming-to-green-hydrogen/). This process, while energy efficient, also produces carbon monoxide and carbon dioxide which is bad for the environment and thus defeats the purpose of the exercise. | ||
In 2021 2.5% of final energy consumption came from hydrogen (www.iea.org/reports/global-hydrogen-review-2022/executive-summary). However, as the vast majority of hydrogen is abstracted using hydrocarbons, mostly natural gas, this figure is misleading. | In 2021 2.5% of final energy consumption came from hydrogen (www.iea.org/reports/global-hydrogen-review-2022/executive-summary). However, as the vast majority of hydrogen is abstracted using hydrocarbons, mostly natural gas, this figure is misleading. | ||
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Thus, while grey hydrogen production is set to grow it is far outpaced by green hydrogen. | Thus, while grey hydrogen production is set to grow it is far outpaced by green hydrogen. | ||
A helping factor to the rise of hydrogen is the lowered costs of renewable energy which is required for green hydrogen. A key example of this is solar energy which is | A helping factor to the rise of hydrogen is the lowered costs of renewable energy which is required for green hydrogen. A key example of this is solar energy which is 25% the price of what it used to be (https://www.marketsandmarkets.com/Market-Reports/green-hydrogen-market-92444177.html). Similarly the cost of electrolysers for green hydrogen is about half the price of what it was 5 years ago, particularly from the developments in the oxide membrane which allows for near 100% efficiency for factories with already hot settings. | ||
Climate goals have been set by almost every country in the world. Hydrogen is a key and realistic method of countries achieving these goals. This is why the EU 10 million tonnes of renewable hydrogen by 2030 and to import 10 million tonnes by 2030 [https://energy.ec.europa.eu/topics/energy-systems-integration/hydrogen_en (energy.ec.europa.eu/topics/energy-systems-integration/hydrogen_en).] This is despite the EU only having 2% of hydrogen in their total energy consumption, below the global average of 2.5%. | Climate goals have been set by almost every country in the world. Hydrogen is a key and realistic method of countries achieving these goals. This is why the EU 10 million tonnes of renewable hydrogen by 2030 and to import 10 million tonnes by 2030 [https://energy.ec.europa.eu/topics/energy-systems-integration/hydrogen_en (energy.ec.europa.eu/topics/energy-systems-integration/hydrogen_en).] This is despite the EU only having 2% of hydrogen in their total energy consumption, below the global average of 2.5%. | ||
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The use of electrolysis to abstract hydrogen as opposed to the steam methane process is due to experience a 16% annual growth rate up to 2028 (www.businesswire.com/news/home/20190618005111/en/Navigant-Research-Report-Shows-the-Global-Market-for-Electrolyzers-is-Expected-to-Grow-at-16-Annually-Through-2028) | The use of electrolysis to abstract hydrogen as opposed to the steam methane process is due to experience a 16% annual growth rate up to 2028 (www.businesswire.com/news/home/20190618005111/en/Navigant-Research-Report-Shows-the-Global-Market-for-Electrolyzers-is-Expected-to-Grow-at-16-Annually-Through-2028) | ||
== Traction of Hydrogen produced by Fuel Cell Energy == | == Traction of Hydrogen produced by Fuel Cell Energy == | ||
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* 2022 operating capacity of 36.3 MW, percentage change from previus year: 6.8%. Ones in process of being made 26.8 | * 2022 operating capacity of 36.3 MW, percentage change from previus year: 6.8%. Ones in process of being made 26.8 | ||
The last few years clearly saw a reduced growth rate. | |||
== Revenue Analysis == | == Revenue Analysis == | ||
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* 2022 289 TWH | * 2022 289 TWH | ||
== Main competitors == | |||
== Main | |||
'''Bloom Energy''' | '''Bloom Energy''' | ||
* Revenue of $462.6 million and Gross margin of 15.4% in the fourth quarter of 2022 but Operating loss of ($40.6) million | * Revenue of $462.6 million and Gross margin of 15.4% in the fourth quarter of 2022 but Operating loss of ($40.6) million ([https://www.bloomenergy.com/news/bloom-energy-reports-fourth-quarter-and-full-year-2022-financial-results/#:~:text=Gross%20margin%20of%2012.4%25%20in,(%24114.5)%20million%20in%202021. https://www.bloomenergy.com/news/bloom-energy-reports-fourth-quarter-and-full-year-2022-financial-results/#:~:text=Gross%20margin%20of%2012.4%25%20in,(%24114.5)%20million%20in%202021.]) | ||
* Revenue of $1,199.1 million in 2022, an increase of 23.3% compared to $972.2 million in 2021; | * Revenue of $1,199.1 million in 2022, an increase of 23.3% compared to $972.2 million in 2021; | ||
** Gross margin of 12.4% in 2022, a decline of 8.0 percentage points compared to 20.3% in 2021. | ** Gross margin of 12.4% in 2022, a decline of 8.0 percentage points compared to 20.3% in 2021. | ||
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'''Linde''' | '''Linde''' | ||
* | * revenue in 2022 was 33,364 million, up from 30,793 million in 2021 | ||
* operating profit was | * operating profit was 5369 million in 2022, up from 4984 million in 2021 | ||
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* gross loss in 2021 of 6.5, 23.5 million in 2022. This jump has been explained by extra costs incurred by REFHYNE I and Leuna projects.([https://itm-power-assets.s3.eu-west-2.amazonaws.com/2022_Annual_Report_d61e87a868.pdf https://itm-power-assets.s3.eu-west-2.amazonaws.com/2022_Annual_Report_d61e87a868.pdf)] | * gross loss in 2021 of 6.5, 23.5 million in 2022. This jump has been explained by extra costs incurred by REFHYNE I and Leuna projects.([https://itm-power-assets.s3.eu-west-2.amazonaws.com/2022_Annual_Report_d61e87a868.pdf https://itm-power-assets.s3.eu-west-2.amazonaws.com/2022_Annual_Report_d61e87a868.pdf)] | ||
* Pre tax loss of 27.6 million in 2021 and 46.7 in 2022 | * Pre tax loss of 27.6 million in 2021 and 46.7 in 2022 | ||
== Recent Financial Performance == | == Recent Financial Performance == | ||
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== Investment Thesis == | == Investment Thesis == | ||
FuelCell Energy is a speculative turnaround play on the growth of distributed carbon-free baseload power and carbon capture. While still unprofitable, its proprietary fuel cell technology provides unique advantages in high efficiency, fuel flexibility and emissions reductions. At 5x 2023 projected sales, the stock appears to discount significant execution risk. But success in commercialising the carbon capture solution and improving profitability could catalyse the shares. Investors should size positions accordingly given the binary, high-risk/high-reward nature of the opportunity here. | FuelCell Energy is a speculative turnaround play on the growth of distributed carbon-free baseload power and carbon capture. While still unprofitable, its proprietary fuel cell technology provides unique advantages in high efficiency, fuel flexibility and emissions reductions. At 5x 2023 projected sales, the stock appears to discount significant execution risk. But success in commercialising the carbon capture solution and improving profitability could catalyse the shares. Investors should size positions accordingly given the binary, high-risk/high-reward nature of the opportunity here. | ||
The company represents a high-risk, high-reward speculative investment opportunity. For investors with longer time horizons and higher risk tolerance, shares could return multiples if execution is strong. But the downside is substantial if growth stalls. | The company represents a high-risk, high-reward speculative investment opportunity. For investors with longer time horizons and higher risk tolerance, shares could return multiples if execution is strong. But the downside is substantial if growth stalls. |