Doosan Fuel Cell, SOFC First Application in Domestic Sites Imminent

[Financial News] Doosan Fuel Cell is applying solid oxide fuel cells (SOFC) to domestic sites for the first time. It plans to supply the initial volume of 9MW in November. Doosan Fuel Cell is a subsidiary of Doosan Enerbility. As of the end of the first half of this year, Doosan Enerbility holds a 30.33% stake in Doosan Fuel Cell, including preferred shares.
According to the industry on the 15th, Doosan Fuel Cell signed a technology agreement with Ceres Power in the UK in November 2023 to develop mass production technology for cell stacks, a key component of power generation SOFC. The initial volume of SOFC is expected to be supplied to the High Changwon Fuel Cell Project in November. It aims to target markets such as data centers, hospitals, and manufacturing, which were previously dominated by Bloom Energy.
Previously, Doosan Fuel Cell signed a long-term service agreement (LTSA) with High Changwon Fuel Cell for a fuel cell system worth 73 billion KRW. The agreement, worth 73 billion KRW, involves Doosan Fuel Cell supplying the main equipment to a 39.8MW fuel cell power plant (100 fuel cells) until September 4, 2036, with a 10-year LTSA.
Doosan Enerbility also signed a 194.6 billion KRW fuel cell power generation project contract with High Changwon Fuel Cell in December 2023. It will establish 70 phosphoric acid fuel cell (PAFC) facilities (30.8MW) and 30 solid oxide fuel cells (SOFC) (9.0MW). The total project cost is 234.9 billion KRW.
Bloom Energy's SOFC is characterized by high-temperature operation at 700~1000 degrees using solid oxide as an electrolyte. Doosan Fuel Cell's SOFC operates at about 200 degrees lower than Bloom Energy, allowing the use of cheaper materials. It is evaluated to enable fast operation at lower temperatures.
Doosan Fuel Cell started construction of a factory in Gunsan, Jeollabuk-do in 2022 for SOFC production, and recently completed it, starting mass production. It aims to supply auxiliary power solutions for data centers, renewable energy-based power grids, peak power generation, building-type power systems, and marine transportation markets.
In March, Doosan Fuel Cell's core component cell stack of marine solid oxide fuel cells (SOFC) passed the environmental test of the Norwegian classification society (DNV) for the first time in the world. DNV is one of the world's top three classification societies.
SOFC has the advantage of high power generation efficiency and a wide range of applications. However, it is currently in the early stages of mass production, requiring considerable time for operational stabilization. The industry sees the SOFC business as a potential medium- to long-term growth driver, but there is expected to be a burden of fixed costs for the time being.
An Ju-won, a researcher at DS Investment & Securities, explained, "We need to secure production yield before supplying the initial volume of SOFC."
Doosan Fuel Cell is proceeding through its U.S. affiliate, HiAxiom, regarding U.S. orders. It is pushing for orders for data centers with PAFC.
The power generation efficiency of PAFC is 42%, lower than SOFC's 60%. It noted the increasing demand for PAFC due to the current shortage of power sources in the U.S.
Researcher An said, "SOFC relies on air cooling due to high temperatures, but PAFC can also use water cooling at relatively lower operating temperatures," adding, "Doosan Fuel Cell plans to enter the U.S. market with PAFC and secure orders with SOFC in the future, responding to the U.S. market. This year, HiAxiom reorganized its sales team to focus on orders for data centers. If HiAxiom secures orders, Doosan Fuel Cell will handle production and sales."
Through this, DS Investment & Securities expects Doosan Fuel Cell to achieve an operating profit of 28 billion KRW in 2026 despite a deficit this year. It is expected to focus on profitable projects from this year and resolve the yield for the initial supply of SOFC. KB Securities predicts that Doosan Fuel Cell will be able to export 20MW of fuel cells annually to the U.S. market from 2026.
Doosan Fuel Cell was established in 2019 when Doosan's fuel cell business unit was spun off. It focuses on power generation projects using hydrogen fuel cells. In 2020, it completed a 50.16MW by-product hydrogen power plant (Daesan Green Energy) in the Daesan Industrial Complex in Seosan, Chungnam, and began operating the first power plant using by-product hydrogen fuel cells in Korea. In February last year, it signed a 10MW fuel cell system supply contract with Byucksan Engineering. ggg@fnnews.com Kang Gugi Reporter