0000886128 false FY --10-31 0.084 P20Y P4Y P7Y us-gaap:PropertyPlantAndEquipmentNet us-gaap:OtherLiabilitiesNoncurrent P24M P2Y 0.333 P3Y 2021-01-01 2038-01-01 2021-01-01 2038-01-01 0 P7Y 0.333 P3Y 0 P5Y P7Y P20Y P20Y 10 years 26 years 3 years 8 years P7Y 0.00 P6Y10M24D 38.77 P3Y1M6D P5Y2M12D 38.76 416.16 0000886128 2019-11-01 2020-10-31 xbrli:shares 0000886128 2021-01-15 iso4217:USD 0000886128 2020-04-30 iso4217:USD xbrli:shares 0000886128 2020-10-31 0000886128 2019-10-31 0000886128 us-gaap:SeriesBPreferredStockMember 2020-10-31 0000886128 us-gaap:SeriesBPreferredStockMember 2019-10-31 0000886128 us-gaap:ProductMember 2018-11-01 2019-10-31 0000886128 us-gaap:ProductMember 2017-11-01 2018-10-31 0000886128 us-gaap:LicenseAndServiceMember 2019-11-01 2020-10-31 0000886128 us-gaap:LicenseAndServiceMember 2018-11-01 2019-10-31 0000886128 us-gaap:LicenseAndServiceMember 2017-11-01 2018-10-31 0000886128 us-gaap:ElectricityGenerationMember 2019-11-01 2020-10-31 0000886128 us-gaap:ElectricityGenerationMember 2018-11-01 2019-10-31 0000886128 us-gaap:ElectricityGenerationMember 2017-11-01 2018-10-31 0000886128 fcel:AdvancedTechnologiesMember 2019-11-01 2020-10-31 0000886128 fcel:AdvancedTechnologiesMember 2018-11-01 2019-10-31 0000886128 fcel:AdvancedTechnologiesMember 2017-11-01 2018-10-31 0000886128 2018-11-01 2019-10-31 0000886128 2017-11-01 2018-10-31 0000886128 us-gaap:ProductMember 2019-11-01 2020-10-31 0000886128 fcel:SeriesAWarrantMember 2018-11-01 2019-10-31 0000886128 us-gaap:SeriesBPreferredStockMember 2019-11-01 2020-10-31 0000886128 us-gaap:SeriesBPreferredStockMember 2018-11-01 2019-10-31 0000886128 us-gaap:SeriesBPreferredStockMember 2017-11-01 2018-10-31 0000886128 us-gaap:SeriesCPreferredStockMember 2018-11-01 2019-10-31 0000886128 us-gaap:SeriesCPreferredStockMember 2017-11-01 2018-10-31 0000886128 us-gaap:SeriesDPreferredStockMember 2018-11-01 2019-10-31 0000886128 us-gaap:SeriesDPreferredStockMember 2017-11-01 2018-10-31 0000886128 us-gaap:CommonStockMember 2017-10-31 0000886128 us-gaap:AdditionalPaidInCapitalMember 2017-10-31 0000886128 us-gaap:RetainedEarningsMember 2017-10-31 0000886128 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-10-31 0000886128 us-gaap:TreasuryStockMember 2017-10-31 0000886128 us-gaap:DeferredCompensationShareBasedPaymentsMember 2017-10-31 0000886128 2017-10-31 0000886128 us-gaap:CommonStockMember 2017-11-01 2018-10-31 0000886128 us-gaap:AdditionalPaidInCapitalMember 2017-11-01 2018-10-31 0000886128 us-gaap:CommonStockMember us-gaap:SeriesCPreferredStockMember 2017-11-01 2018-10-31 0000886128 us-gaap:AdditionalPaidInCapitalMember us-gaap:SeriesCPreferredStockMember 2017-11-01 2018-10-31 0000886128 us-gaap:AdditionalPaidInCapitalMember us-gaap:SeriesDPreferredStockMember 2017-11-01 2018-10-31 0000886128 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-11-01 2018-10-31 0000886128 us-gaap:TreasuryStockMember 2017-11-01 2018-10-31 0000886128 us-gaap:DeferredCompensationShareBasedPaymentsMember 2017-11-01 2018-10-31 0000886128 us-gaap:RetainedEarningsMember 2017-11-01 2018-10-31 0000886128 us-gaap:CommonStockMember 2018-10-31 0000886128 us-gaap:AdditionalPaidInCapitalMember 2018-10-31 0000886128 us-gaap:RetainedEarningsMember 2018-10-31 0000886128 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-10-31 0000886128 us-gaap:TreasuryStockMember 2018-10-31 0000886128 us-gaap:DeferredCompensationShareBasedPaymentsMember 2018-10-31 0000886128 2018-10-31 0000886128 us-gaap:CommonStockMember 2018-11-01 2019-10-31 0000886128 us-gaap:AdditionalPaidInCapitalMember 2018-11-01 2019-10-31 0000886128 us-gaap:AdditionalPaidInCapitalMember us-gaap:SeriesBPreferredStockMember 2018-11-01 2019-10-31 0000886128 us-gaap:AdditionalPaidInCapitalMember us-gaap:SeriesDPreferredStockMember 2018-11-01 2019-10-31 0000886128 us-gaap:RetainedEarningsMember srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2019-10-31 0000886128 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2019-10-31 0000886128 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-11-01 2019-10-31 0000886128 us-gaap:TreasuryStockMember 2018-11-01 2019-10-31 0000886128 us-gaap:DeferredCompensationShareBasedPaymentsMember 2018-11-01 2019-10-31 0000886128 us-gaap:RetainedEarningsMember 2018-11-01 2019-10-31 0000886128 us-gaap:CommonStockMember 2019-10-31 0000886128 us-gaap:AdditionalPaidInCapitalMember 2019-10-31 0000886128 us-gaap:RetainedEarningsMember 2019-10-31 0000886128 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-10-31 0000886128 us-gaap:TreasuryStockMember 2019-10-31 0000886128 us-gaap:DeferredCompensationShareBasedPaymentsMember 2019-10-31 0000886128 us-gaap:CommonStockMember 2019-11-01 2020-10-31 0000886128 us-gaap:AdditionalPaidInCapitalMember 2019-11-01 2020-10-31 0000886128 us-gaap:AdditionalPaidInCapitalMember us-gaap:SeriesBPreferredStockMember 2019-11-01 2020-10-31 0000886128 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-11-01 2020-10-31 0000886128 us-gaap:TreasuryStockMember 2019-11-01 2020-10-31 0000886128 us-gaap:DeferredCompensationShareBasedPaymentsMember 2019-11-01 2020-10-31 0000886128 us-gaap:RetainedEarningsMember 2019-11-01 2020-10-31 0000886128 us-gaap:CommonStockMember 2020-10-31 0000886128 us-gaap:AdditionalPaidInCapitalMember 2020-10-31 0000886128 us-gaap:RetainedEarningsMember 2020-10-31 0000886128 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-10-31 0000886128 us-gaap:TreasuryStockMember 2020-10-31 0000886128 us-gaap:DeferredCompensationShareBasedPaymentsMember 2020-10-31 0000886128 us-gaap:SeriesDPreferredStockMember 2019-11-01 2020-10-31 0000886128 2019-05-08 2019-05-08 xbrli:pure 0000886128 2019-05-07 0000886128 2019-05-08 0000886128 us-gaap:SubsequentEventMember 2020-12-30 2020-12-31 0000886128 us-gaap:SubsequentEventMember fcel:SrSecuredDebtMember 2020-12-07 2020-12-07 0000886128 us-gaap:SubsequentEventMember fcel:SrSecuredDebtMember 2020-12-07 0000886128 fcel:EnbridgeIncMember us-gaap:SubsequentEventMember fcel:SeriesOnePreferredSharesMember 2020-12-17 iso4217:CAD 0000886128 us-gaap:SubsequentEventMember us-gaap:CommonStockMember 2020-12-31 0000886128 us-gaap:SubsequentEventMember 2020-12-31 0000886128 fcel:SpecificUpgradesMember 2019-11-01 2020-10-31 0000886128 fcel:SpecificUpgradesMember 2018-11-01 2019-10-31 0000886128 fcel:UnspecificUpgradesMember 2019-11-01 2020-10-31 0000886128 fcel:UnspecificUpgradesMember 2018-11-01 2019-10-31 0000886128 fcel:JointDevelopmentAgreementIIMember 2019-11-01 2020-10-31 0000886128 2019-06-13 2019-06-14 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2019-11-01 2020-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2018-11-01 2019-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2017-11-01 2018-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:ExxonMobilResearchAndEngineeringCompanyMember 2019-11-01 2020-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:ExxonMobilResearchAndEngineeringCompanyMember 2018-11-01 2019-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:ExxonMobilResearchAndEngineeringCompanyMember 2017-11-01 2018-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:UILHoldingsCorporationMember 2019-11-01 2020-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:UILHoldingsCorporationMember 2018-11-01 2019-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:UILHoldingsCorporationMember 2017-11-01 2018-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:ConnecticutLightAndPowerMember 2019-11-01 2020-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:ConnecticutLightAndPowerMember 2018-11-01 2019-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:ConnecticutLightAndPowerMember 2017-11-01 2018-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:USDepartmentOfEnergyMember 2019-11-01 2020-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:USDepartmentOfEnergyMember 2018-11-01 2019-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:USDepartmentOfEnergyMember 2017-11-01 2018-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:ClearwayEnergyFormerlyNRGYieldIncMember 2019-11-01 2020-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:ClearwayEnergyFormerlyNRGYieldIncMember 2018-11-01 2019-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:ClearwayEnergyFormerlyNRGYieldIncMember 2017-11-01 2018-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:PfizerIncMember 2019-11-01 2020-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:PfizerIncMember 2018-11-01 2019-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:PfizerIncMember 2017-11-01 2018-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:DominionBridgeportFuelcellParkMember 2019-11-01 2020-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:DominionBridgeportFuelcellParkMember 2018-11-01 2019-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:DominionBridgeportFuelcellParkMember 2017-11-01 2018-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:PoscoEnergyMember 2019-11-01 2020-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:PoscoEnergyMember 2018-11-01 2019-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:PoscoEnergyMember 2017-11-01 2018-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:HanyangIndustrialDevelopementCoLtdMember 2019-11-01 2020-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:HanyangIndustrialDevelopementCoLtdMember 2018-11-01 2019-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:HanyangIndustrialDevelopementCoLtdMember 2017-11-01 2018-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:AEPOnsitePartnersLLCMember 2019-11-01 2020-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:AEPOnsitePartnersLLCMember 2018-11-01 2019-10-31 0000886128 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember fcel:AEPOnsitePartnersLLCMember 2017-11-01 2018-10-31 0000886128 us-gaap:AccountingStandardsUpdate201602Member 2020-10-31 0000886128 fcel:PoscoEnergyMember 2020-10-31 0000886128 us-gaap:ServiceAgreementsMember 2020-10-31 0000886128 us-gaap:LicensingAgreementsMember 2020-10-31 0000886128 fcel:AdvancedTechnologiesContractsMember 2020-10-31 0000886128 us-gaap:DifferenceBetweenRevenueGuidanceInEffectBeforeAndAfterTopic606Member us-gaap:AccountingStandardsUpdate201409Member 2018-11-01 2019-10-31 0000886128 us-gaap:CalculatedUnderRevenueGuidanceInEffectBeforeTopic606Member us-gaap:AccountingStandardsUpdate201409Member 2018-11-01 2019-10-31 0000886128 us-gaap:AccountingStandardsUpdate201409Member 2019-10-31 0000886128 us-gaap:AccountingStandardsUpdate201409Member 2018-11-01 utr:MW 0000886128 fcel:BridgeportFuelCellLimitedLiabilityCompanyMember stpr:CT 2019-05-09 2019-05-09 0000886128 fcel:BridgeportFuelCellLimitedLiabilityCompanyMember 2019-05-09 2019-05-09 0000886128 fcel:BridgeportFuelCellLimitedLiabilityCompanyMember 2019-05-09 0000886128 fcel:BridgeportFuelCellProjectMember 2019-05-09 0000886128 fcel:ProjectAssetsMember fcel:BridgeportFuelCellLimitedLiabilityCompanyMember srt:MinimumMember fcel:FuelCellModulesMember 2018-11-01 2019-10-31 0000886128 fcel:ProjectAssetsMember fcel:BridgeportFuelCellLimitedLiabilityCompanyMember fcel:FuelCellModulesMember srt:MaximumMember 2018-11-01 2019-10-31 0000886128 fcel:ProjectAssetsMember fcel:BridgeportFuelCellLimitedLiabilityCompanyMember fcel:BalanceOfPlantAssetsMember 2018-11-01 2019-10-31 0000886128 fcel:BridgeportFuelCellLimitedLiabilityCompanyMember 2018-11-01 2019-10-31 fcel:Employee 0000886128 2019-04-11 2019-04-12 0000886128 us-gaap:OtherAssetsMember 2020-10-31 0000886128 us-gaap:OtherAssetsMember 2019-10-31 0000886128 us-gaap:GovernmentMember 2020-10-31 0000886128 us-gaap:GovernmentMember 2019-10-31 0000886128 us-gaap:CostOfSalesMember 2019-11-01 2020-10-31 0000886128 us-gaap:CostOfSalesMember 2018-11-01 2019-10-31 0000886128 fcel:ProjectAssetsOperatingMember 2020-10-31 0000886128 fcel:ProjectAssetsOperatingMember 2019-10-31 0000886128 fcel:ProjectAssetsConstructionInProgressMember 2020-10-31 0000886128 fcel:ProjectAssetsConstructionInProgressMember 2019-10-31 0000886128 srt:MinimumMember fcel:ProjectAssetsOperatingMember 2019-11-01 2020-10-31 0000886128 srt:MaximumMember fcel:ProjectAssetsOperatingMember 2019-11-01 2020-10-31 0000886128 srt:MinimumMember fcel:ProjectAssetsConstructionInProgressMember 2019-11-01 2020-10-31 0000886128 srt:MaximumMember fcel:ProjectAssetsConstructionInProgressMember 2019-11-01 2020-10-31 0000886128 srt:MinimumMember 2019-11-01 2020-10-31 0000886128 srt:MaximumMember 2019-11-01 2020-10-31 fcel:ProjectAsset 0000886128 fcel:TriangleStreetProjectMember 2018-11-01 2019-10-31 0000886128 fcel:TriangleStreetProjectMember 2019-08-01 2019-10-31 0000886128 fcel:BolthouseFarmsProjectMember 2018-11-01 2019-10-31 0000886128 us-gaap:LandMember 2020-10-31 0000886128 us-gaap:LandMember 2019-10-31 0000886128 us-gaap:BuildingAndBuildingImprovementsMember 2020-10-31 0000886128 us-gaap:BuildingAndBuildingImprovementsMember 2019-10-31 0000886128 us-gaap:MachineryAndEquipmentMember 2020-10-31 0000886128 us-gaap:MachineryAndEquipmentMember 2019-10-31 0000886128 us-gaap:FurnitureAndFixturesMember 2020-10-31 0000886128 us-gaap:FurnitureAndFixturesMember 2019-10-31 0000886128 us-gaap:ConstructionInProgressMember 2020-10-31 0000886128 us-gaap:ConstructionInProgressMember 2019-10-31 0000886128 us-gaap:BuildingAndBuildingImprovementsMember srt:MinimumMember 2019-11-01 2020-10-31 0000886128 us-gaap:BuildingAndBuildingImprovementsMember srt:MaximumMember 2019-11-01 2020-10-31 0000886128 us-gaap:MachineryAndEquipmentMember srt:MinimumMember 2019-11-01 2020-10-31 0000886128 us-gaap:MachineryAndEquipmentMember srt:MaximumMember 2019-11-01 2020-10-31 0000886128 us-gaap:FurnitureAndFixturesMember 2019-11-01 2020-10-31 0000886128 fcel:VersaAcquisitionMember 2020-10-31 0000886128 fcel:VersaAcquisitionMember 2019-10-31 0000886128 fcel:BridgeportFuelCellLimitedLiabilityCompanyMember 2019-11-01 2020-10-31 0000886128 us-gaap:InProcessResearchAndDevelopmentMember 2020-10-31 0000886128 fcel:BridgeportFuelCellLimitedLiabilityCompanyMember 2020-10-31 0000886128 us-gaap:InProcessResearchAndDevelopmentMember 2019-10-31 0000886128 fcel:BridgeportFuelCellLimitedLiabilityCompanyMember 2019-10-31 fcel:Customer 0000886128 2016-06-29 0000886128 fcel:BridgeportFuelCellProjectMember 2020-10-31 0000886128 fcel:BridgeportFuelCellProjectMember 2019-10-31 0000886128 2019-11-01 0000886128 fcel:ComputerAndOfficeEquipmentAndManufacturingFacilitiesMember 2019-01-01 2019-12-31 0000886128 fcel:ComputerAndOfficeEquipmentAndManufacturingFacilitiesMember 2017-11-01 2018-10-31 0000886128 fcel:PurchaseAndSaleAgreementMember fcel:CentralCAFuelCell2Member fcel:CrestmarkSalesLeasebackTransactionMember fcel:TulareBioMATMember country:CA 2020-02-11 2020-02-11 0000886128 fcel:CrestmarkSalesLeasebackTransactionMember 2020-02-11 0000886128 fcel:CrestmarkSalesLeasebackTransactionMember 2020-02-11 2020-02-11 0000886128 fcel:CrestmarkSalesLeasebackTransactionMember 2019-11-01 2020-10-31 0000886128 fcel:OrionEnergyPartnersCreditFacilityMember 2020-10-31 0000886128 fcel:OrionEnergyPartnersCreditFacilityMember 2019-10-31 0000886128 fcel:ConnecticutGreenBankLoansMember 2020-10-31 0000886128 fcel:ConnecticutGreenBankLoansMember 2019-10-31 0000886128 fcel:ConnecticutGreenBankLoanBFCLoanMember 2020-10-31 0000886128 fcel:ConnecticutGreenBankLoanBFCLoanMember 2019-10-31 0000886128 fcel:LibertyBankTermLoanAgreementMember 2020-10-31 0000886128 fcel:LibertyBankTermLoanAgreementMember 2019-10-31 0000886128 fcel:FifthThirdBankTermLoanAgreementMember 2020-10-31 0000886128 fcel:FifthThirdBankTermLoanAgreementMember 2019-10-31 0000886128 fcel:FinanceObligationsForSaleLeaseBackTransactionsMember 2020-10-31 0000886128 fcel:FinanceObligationsForSaleLeaseBackTransactionsMember 2019-10-31 0000886128 fcel:StateOfConnecticutMember 2020-10-31 0000886128 fcel:StateOfConnecticutMember 2019-10-31 0000886128 fcel:NewBritainRenewableEnergyMember 2019-10-31 0000886128 fcel:EnhancedCapitalTermLoanAndSecurityAgreementMember 2019-10-31 0000886128 fcel:FifthThirdBankConstructionLoanAgreementMember 2019-10-31 0000886128 fcel:LibertyBankPromissoryNoteMember 2020-10-31 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember fcel:SeniorSecuredCreditFacilityMember 2019-10-31 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember 2018-11-01 2019-10-31 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember fcel:InitialFundingMember 2018-11-01 2019-10-31 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember fcel:InitialFundingMember 2019-10-31 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember fcel:InitialFundingMember srt:MaximumMember 2019-10-31 0000886128 fcel:SecondFundingMember fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember 2019-11-22 2019-11-22 0000886128 fcel:SecondFundingMember fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember fcel:GrotonProjectMember 2019-11-22 2019-11-22 0000886128 fcel:SecondFundingMember fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember fcel:LIPAYaphankSolidWasteManagementProjectMember 2019-11-22 2019-11-22 0000886128 fcel:SecondFundingMember fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember fcel:TulareBioMATMember 2019-11-22 2019-11-22 0000886128 fcel:SecondFundingMember fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember 2019-11-22 0000886128 fcel:SecondFundingMember fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember srt:MaximumMember 2019-11-22 0000886128 fcel:SecondFundingMember fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember fcel:ExercisePriceZeroPointTwoFourTwoMember 2019-11-22 0000886128 fcel:SecondFundingMember fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember fcel:ExercisePriceZeroPointSixTwoMember 2019-11-22 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember 2019-11-01 2020-10-31 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember fcel:InitialFundingMember 2019-11-01 2020-10-31 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember fcel:InitialFundingMember srt:MaximumMember 2019-11-01 2020-10-31 0000886128 fcel:OrionCreditAgreementMember fcel:SecondFundingMember 2020-10-31 0000886128 fcel:OrionCreditAgreementMember fcel:SecondaryFacilityLoansMember 2020-10-31 0000886128 fcel:OrionCreditAgreementMember fcel:FifthOrionAmendmentMember 2020-05-09 2020-06-08 0000886128 fcel:OrionCreditAgreementMember fcel:FifthOrionAmendmentMember 2020-08-01 2020-10-31 0000886128 fcel:ConnecticutGreenBankNotesMember 2019-10-31 0000886128 fcel:ConnecticutGreenBankNotesMember 2019-12-31 0000886128 fcel:ConnecticutGreenBankNotesMember 2020-10-31 0000886128 fcel:GrotonCommitmentLetterMember fcel:ConnecticutGreenBankNotesMember 2019-02-06 0000886128 fcel:SubordinatedCreditAgreementMember fcel:BridgeportFuelCellLimitedLiabilityCompanyMember fcel:ConnecticutGreenBankLoansMember 2019-05-09 2019-05-09 0000886128 fcel:IncrementalFundingMember fcel:SubordinatedCreditAgreementMember fcel:BridgeportFuelCellLimitedLiabilityCompanyMember fcel:ConnecticutGreenBankLoansMember 2019-05-09 2019-05-09 0000886128 fcel:PreviouslyReceivedMember fcel:SubordinatedCreditAgreementMember fcel:BridgeportFuelCellLimitedLiabilityCompanyMember fcel:ConnecticutGreenBankLoansMember 2019-05-09 2019-05-09 0000886128 fcel:SeniorTermLoanMember fcel:SubordinatedCreditAgreementMember fcel:BridgeportFuelCellLimitedLiabilityCompanyMember fcel:ConnecticutGreenBankLoansMember 2019-05-09 0000886128 fcel:SubordinatedCreditAgreementMember fcel:BridgeportFuelCellLimitedLiabilityCompanyMember fcel:ConnecticutGreenBankLoansMember 2019-05-09 0000886128 fcel:SubordinatedCreditAgreementMember fcel:BridgeportFuelCellLimitedLiabilityCompanyMember fcel:ConnecticutGreenBankLoansMember 2019-11-01 2020-10-31 0000886128 fcel:SubordinatedCreditAgreementMember fcel:BridgeportFuelCellLimitedLiabilityCompanyMember fcel:ConnecticutGreenBankLoansMember srt:MinimumMember 2019-05-09 2019-05-09 0000886128 fcel:SubordinatedCreditAgreementMember fcel:BridgeportFuelCellLimitedLiabilityCompanyMember fcel:ConnecticutGreenBankLoansMember 2020-10-31 0000886128 fcel:CreditAgreementMember fcel:BridgeportFuelCellLimitedLiabilityCompanyMember fcel:FifthThirdBankMember fcel:BridgeportLoansMember 2019-05-09 2019-05-09 0000886128 fcel:CreditAgreementMember fcel:BridgeportFuelCellLimitedLiabilityCompanyMember fcel:LibertyBankMember fcel:BridgeportLoansMember 2019-05-09 2019-05-09 0000886128 fcel:CreditAgreementMember fcel:BridgeportLoansMember 2019-05-09 2019-05-09 0000886128 fcel:CreditAgreementMember fcel:BridgeportLoansMember 2019-11-01 2020-10-31 0000886128 fcel:BridgeportLoansMember fcel:CreditAgreementMember us-gaap:InterestRateSwapMember 2019-05-16 0000886128 us-gaap:FairValueInputsLevel2Member fcel:BridgeportLoansMember fcel:CreditAgreementMember us-gaap:InterestRateSwapMember 2019-11-01 2020-10-31 0000886128 us-gaap:FairValueInputsLevel2Member fcel:BridgeportLoansMember fcel:CreditAgreementMember us-gaap:InterestRateSwapMember 2018-11-01 2019-10-31 0000886128 us-gaap:FairValueInputsLevel2Member fcel:BridgeportLoansMember fcel:CreditAgreementMember us-gaap:InterestRateSwapMember 2020-10-31 0000886128 us-gaap:FairValueInputsLevel2Member fcel:BridgeportLoansMember fcel:CreditAgreementMember us-gaap:InterestRateSwapMember 2019-10-31 0000886128 fcel:LibertyBankMember fcel:BridgeportLoansMember fcel:CreditAgreementMember 2020-10-31 0000886128 fcel:FifthThirdBankMember fcel:BridgeportLoansMember fcel:CreditAgreementMember 2020-10-31 0000886128 srt:MinimumMember fcel:BridgeportLoansMember fcel:CreditAgreementMember 2019-11-01 2020-10-31 0000886128 fcel:FinanceObligationsForSaleLeaseBackAgreementMember fcel:PNCEnergyCapitalLLCMember 2020-10-31 0000886128 fcel:FinanceObligationsForSaleLeaseBackAgreementMember fcel:PNCEnergyCapitalLLCMember 2019-10-31 0000886128 fcel:FinanceObligationsForSaleLeaseBackAgreementMember fcel:PNCEnergyCapitalLLCMember 2019-11-01 2020-10-31 0000886128 fcel:SaleLeasebackArrangementsWithPNCMember 2019-11-01 2020-10-31 0000886128 fcel:StateOfConnecticutMember 2015-10-31 0000886128 fcel:StateOfConnecticutMember 2020-04-30 0000886128 fcel:StateOfConnecticutMember 2015-10-01 2015-10-31 0000886128 fcel:StateOfConnecticutMember srt:MaximumMember 2019-11-01 2020-10-31 0000886128 fcel:StateOfConnecticutMember 2019-11-01 2020-10-31 fcel:Position 0000886128 fcel:StateOfConnecticutMember fcel:EmploymentObligationMember 2015-10-01 2015-10-31 0000886128 fcel:StateOfConnecticutMember fcel:SecondAmendmentMember fcel:EmploymentObligationMember 2019-01-01 2019-01-31 0000886128 fcel:StateOfConnecticutMember fcel:SecondAmendmentMember fcel:EmploymentObligationMember 2019-01-31 0000886128 fcel:LibertyBankPromissoryNoteMember 2020-04-22 2020-04-24 0000886128 fcel:LibertyBankPromissoryNoteMember fcel:LibertyBankMember fcel:CoronavirusAidReliefAndEconomicSecurityActMember 2019-11-01 2020-10-31 0000886128 fcel:LibertyBankMember fcel:CoronavirusAidReliefAndEconomicSecurityActMember 2019-11-01 2020-10-31 0000886128 fcel:NewBritainRenewableEnergyTermLoanMember 2019-11-01 2020-10-31 0000886128 fcel:NewBritainRenewableEnergyTermLoanMember 2019-10-31 0000886128 fcel:EnhancedCapitalTermLoanAndSecurityAgreementMember 2019-01-09 0000886128 fcel:EnhancedCapitalTermLoanAndSecurityAgreementMember 2019-01-08 2019-01-09 0000886128 fcel:NewConstructionLoanFacilityMember fcel:FifthThirdBankGrotonLoanMember 2019-02-28 0000886128 fcel:NewConstructionLoanFacilityMember fcel:FifthThirdBankGrotonLoanMember 2019-10-31 0000886128 fcel:NewConstructionLoanFacilityMember fcel:GrotonCTMember fcel:FifthThirdBankGrotonLoanMember 2019-02-27 2019-02-28 0000886128 fcel:NewConstructionLoanFacilityMember fcel:FifthThirdBankGrotonLoanMember 2019-02-27 2019-02-28 0000886128 fcel:NewConstructionLoanFacilityMember fcel:FifthThirdBankGrotonLoanMember 2019-04-01 2019-04-30 0000886128 fcel:NewConstructionLoanFacilityMember fcel:FifthThirdBankGrotonLoanMember 2019-02-28 0000886128 fcel:PNCEnergyCapitalLLCMember 2019-11-01 2020-10-31 0000886128 fcel:BridgeportFuelCellLimitedLiabilityCompanyMember 2019-11-01 2020-10-31 0000886128 fcel:OrionCreditFacilityMember 2019-11-01 2020-10-31 0000886128 2020-05-11 0000886128 us-gaap:CommonStockMember srt:MaximumMember fcel:AtMarketIssuanceSalesAgreementMember fcel:JefferiesLLCMember 2020-06-15 2020-06-16 0000886128 us-gaap:CommonStockMember fcel:AtMarketIssuanceSalesAgreementMember fcel:JefferiesLLCMember 2020-06-15 2020-06-16 0000886128 us-gaap:CommonStockMember fcel:AtMarketIssuanceSalesAgreementMember fcel:JefferiesLLCMember 2020-06-01 2020-10-31 0000886128 us-gaap:CommonStockMember fcel:AtMarketIssuanceSalesAgreementMember fcel:JefferiesLLCMember 2020-10-31 0000886128 fcel:AtMarketIssuanceSalesAgreementMember fcel:BRileyFBRIncMember srt:MaximumMember 2019-10-04 2019-10-04 0000886128 fcel:AtMarketIssuanceSalesAgreementMember fcel:BRileyFBRIncMember 2019-10-04 0000886128 fcel:AtMarketIssuanceSalesAgreementMember fcel:BRileyFBRIncMember srt:MaximumMember 2019-10-31 0000886128 fcel:AtMarketIssuanceSalesAgreementMember fcel:BRileyFBRIncMember 2018-11-01 2019-10-31 0000886128 fcel:AtMarketIssuanceSalesAgreementMember fcel:BRileyFBRIncMember 2019-10-04 2019-10-04 0000886128 us-gaap:CommonStockMember fcel:AtMarketIssuanceSalesAgreementMember fcel:BRileyFBRIncMember 2019-11-01 2020-10-31 0000886128 us-gaap:CommonStockMember fcel:AtMarketIssuanceSalesAgreementMember fcel:BRileyFBRIncMember 2020-10-31 0000886128 us-gaap:CommonStockMember fcel:AtMarketIssuanceSalesAgreementMember fcel:BRileyFBRIncMember 2018-11-01 2019-10-31 0000886128 fcel:AtMarketIssuanceSalesAgreementMember fcel:BRileyFBRIncAndOppenheimerCoIncMember srt:MaximumMember 2018-06-13 2018-06-13 0000886128 fcel:AtMarketIssuanceSalesAgreementMember fcel:BRileyFBRIncAndOppenheimerCoIncMember 2018-06-13 2018-06-13 0000886128 fcel:AtMarketIssuanceSalesAgreementMember fcel:BRileyFBRIncAndOppenheimerCoIncMember us-gaap:CommonStockMember 2018-11-01 2019-10-31 0000886128 fcel:AtMarketIssuanceSalesAgreementMember fcel:BRileyFBRIncAndOppenheimerCoIncMember us-gaap:CommonStockMember 2017-11-01 2018-10-31 0000886128 fcel:AtMarketIssuanceSalesAgreementMember fcel:BRileyFBRIncAndOppenheimerCoIncMember us-gaap:CommonStockMember 2019-10-31 0000886128 fcel:AtMarketIssuanceSalesAgreementMember fcel:BRileyFBRIncAndOppenheimerCoIncMember us-gaap:CommonStockMember 2018-10-31 0000886128 fcel:UnderwritingAgreementMember 2020-10-01 2020-10-31 0000886128 us-gaap:IPOMember fcel:SeriesCWarrantsMember 2017-05-03 0000886128 fcel:SeriesCWarrantsMember us-gaap:CommonStockMember 2017-11-01 2018-10-31 0000886128 us-gaap:IPOMember fcel:SeriesDWarrantsMember 2017-05-03 0000886128 us-gaap:IPOMember fcel:SeriesDWarrantsMember 2017-05-02 2017-05-03 0000886128 fcel:SeriesDWarrantsMember us-gaap:CommonStockMember 2017-11-01 2018-10-31 0000886128 us-gaap:IPOMember fcel:SeriesCWarrantsMember 2017-05-02 2017-05-03 0000886128 fcel:SeriesCWarrantsMember us-gaap:CommonStockMember 2018-11-01 2019-10-31 0000886128 fcel:SeriesCWarrantsMember us-gaap:CommonStockMember 2019-11-01 2020-10-31 0000886128 fcel:SeriesAWarrantsMember 2016-07-12 0000886128 fcel:ExchangeAgreementMember 2019-02-21 2019-02-21 0000886128 fcel:SeriesAWarrantsMember fcel:ExchangeAgreementMember 2019-11-01 2020-10-31 0000886128 fcel:OrionCreditAgreementMember fcel:InitialFundingWarrantsMember 2019-10-31 0000886128 fcel:OrionCreditAgreementMember fcel:SecondFundingWarrantsMember 2019-11-22 0000886128 fcel:OrionCreditAgreementMember fcel:SecondFundingWarrantsMember fcel:ExercisePriceZeroPointTwoFourTwoMember 2019-11-22 0000886128 fcel:OrionCreditAgreementMember fcel:SecondFundingWarrantsMember fcel:ExercisePriceZeroPointSixTwoMember 2019-11-22 0000886128 us-gaap:WarrantMember fcel:SecondFundingWarrantsMember 2018-11-01 2019-10-31 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember fcel:InitialFundingWarrantsMember fcel:ExercisePriceZeroPointThreeOneZeroMember 2020-01-09 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember fcel:SecondFundingMember fcel:ExercisePriceZeroPointSixTwoMember 2020-01-09 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember 2020-01-09 2020-01-09 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember fcel:InitialFundingWarrantsMember 2020-01-09 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember fcel:SecondFundingMember 2020-01-09 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember 2020-01-09 0000886128 2020-01-07 2020-01-08 0000886128 2019-11-01 2020-01-31 0000886128 2020-01-08 0000886128 2020-10-06 0000886128 2020-10-06 2020-10-06 0000886128 fcel:SeriesAWarrantsMember 2018-10-31 0000886128 fcel:SeriesCWarrantsMember 2018-10-31 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember 2018-11-01 2019-10-31 0000886128 fcel:SeriesAWarrantsMember 2018-11-01 2019-10-31 0000886128 fcel:SeriesCWarrantsMember 2019-10-31 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember 2019-10-31 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember 2019-11-01 2020-10-31 0000886128 fcel:SeriesCWarrantsMember 2020-10-31 0000886128 fcel:OrionEnergyPartnersInvestmentAgentLLCCreditFacilityMember 2020-10-31 0000886128 us-gaap:SeriesBPreferredStockMember 2005-03-31 0000886128 us-gaap:SeriesBPreferredStockMember 2005-03-30 2005-03-31 0000886128 us-gaap:SeriesDPreferredStockMember 2018-08-31 0000886128 us-gaap:SeriesDPreferredStockMember 2018-08-01 2018-08-31 0000886128 fcel:InstallmentAndOptionalConversionsTriggeringEventConversionsOfSeriesDPreferredStockToCommonStockMember 2018-11-01 2019-10-31 0000886128 us-gaap:SeriesDPreferredStockMember srt:MinimumMember 2018-11-01 2019-10-31 0000886128 us-gaap:SeriesDPreferredStockMember fcel:ConvertiblePreferredOfferingMember srt:MinimumMember 2018-11-01 2019-10-31 0000886128 us-gaap:SeriesDPreferredStockMember srt:MinimumMember 2019-06-11 2019-07-03 0000886128 us-gaap:SeriesDPreferredStockMember srt:MaximumMember 2019-06-11 2019-07-03 0000886128 us-gaap:SeriesCPreferredStockMember fcel:ConvertiblePreferredOfferingMember 2016-11-01 2017-10-31 0000886128 us-gaap:SeriesCPreferredStockMember 2018-10-31 0000886128 us-gaap:SeriesCPreferredStockMember fcel:WaiverAgreementMember 2019-02-21 0000886128 us-gaap:SeriesCPreferredStockMember fcel:WaiverAgreementMember 2018-11-01 2019-10-31 0000886128 us-gaap:SeriesCPreferredStockMember fcel:WaiverAgreementMember 2019-02-21 2019-02-21 fcel:TradingDay 0000886128 us-gaap:SeriesCPreferredStockMember fcel:WaiverAgreementMember us-gaap:MeasurementInputPriceVolatilityMember 2019-02-21 2019-02-21 0000886128 us-gaap:SeriesCPreferredStockMember fcel:WaiverAgreementMember us-gaap:MeasurementInputDiscountRateMember 2019-02-21 2019-02-21 0000886128 us-gaap:SeriesCPreferredStockMember fcel:WaiverAgreementMember 2019-02-01 2019-04-30 0000886128 us-gaap:SeriesCPreferredStockMember 2018-08-26 0000886128 us-gaap:SeriesCPreferredStockMember 2018-08-27 0000886128 us-gaap:SeriesCPreferredStockMember srt:MinimumMember 2019-05-23 0000886128 us-gaap:SeriesCPreferredStockMember srt:MaximumMember 2019-05-22 0000886128 us-gaap:SeriesCPreferredStockMember 2018-12-03 0000886128 us-gaap:SeriesCPreferredStockMember 2018-12-17 0000886128 us-gaap:SeriesCPreferredStockMember 2019-01-02 0000886128 fcel:WaiverAgreementMember 2018-02-01 2018-04-30 0000886128 2018-11-01 2019-01-31 0000886128 us-gaap:SeriesCPreferredStockMember fcel:WaiverAgreementMember fcel:ConvertiblePreferredOfferingMember 2018-11-01 2019-10-31 0000886128 us-gaap:SeriesCPreferredStockMember fcel:WaiverAgreementMember 2019-10-31 0000886128 us-gaap:SeriesCPreferredStockMember 2019-05-23 0000886128 fcel:InstallmentConversionOfSeriesCPreferredStockToCommonStockMember 2017-11-01 2018-10-31 0000886128 us-gaap:SeriesBPreferredStockMember 2019-05-15 2019-05-15 0000886128 us-gaap:SeriesBPreferredStockMember 2019-08-15 2019-08-15 0000886128 us-gaap:SeriesBPreferredStockMember us-gaap:CommonStockMember 2019-11-01 2020-10-31 0000886128 us-gaap:SeriesBPreferredStockMember srt:MinimumMember 2019-11-01 2020-10-31 0000886128 fcel:ClassACumulativeRedeemableExchangeablePreferredSharesMember 2020-10-31 0000886128 us-gaap:PreferredClassAMember 2019-11-01 2020-10-31 0000886128 us-gaap:PreferredClassAMember srt:MinimumMember 2019-11-01 2020-10-31 0000886128 us-gaap:PreferredClassAMember srt:MaximumMember 2019-11-01 2020-10-31 0000886128 us-gaap:PreferredClassAMember 2020-10-31 0000886128 fcel:ClassACumulativeRedeemableExchangeablePreferredSharesMember 2019-11-01 2020-10-31 0000886128 fcel:ClassACumulativeRedeemableExchangeablePreferredSharesMember 2018-11-01 2019-10-31 0000886128 fcel:ClassACumulativeRedeemableExchangeablePreferredSharesMember 2017-11-01 2018-10-31 0000886128 fcel:ClassACumulativeRedeemableExchangeablePreferredSharesMember 2019-10-31 fcel:Segment 0000886128 country:US 2019-11-01 2020-10-31 0000886128 country:US 2018-11-01 2019-10-31 0000886128 country:US 2017-11-01 2018-10-31 0000886128 country:KR 2019-11-01 2020-10-31 0000886128 country:KR 2018-11-01 2019-10-31 0000886128 country:KR 2017-11-01 2018-10-31 0000886128 country:GB 2019-11-01 2020-10-31 0000886128 country:GB 2018-11-01 2019-10-31 0000886128 country:GB 2017-11-01 2018-10-31 0000886128 country:DE 2019-11-01 2020-10-31 0000886128 country:DE 2018-11-01 2019-10-31 0000886128 country:DE 2017-11-01 2018-10-31 0000886128 country:CA 2017-11-01 2018-10-31 0000886128 country:CH 2019-11-01 2020-10-31 0000886128 us-gaap:FinancialServiceOtherMember 2019-11-01 2020-10-31 0000886128 us-gaap:FinancialServiceOtherMember 2018-11-01 2019-10-31 0000886128 us-gaap:FinancialServiceOtherMember 2017-11-01 2018-10-31 0000886128 fcel:TwoThousandEighteenOmnibusIncentivePlanMember 2020-05-08 0000886128 fcel:TwoThousandEighteenOmnibusIncentivePlanMember srt:MinimumMember 2020-05-06 2020-05-08 0000886128 fcel:TwoThousandEighteenOmnibusIncentivePlanMember srt:MaximumMember 2020-05-06 2020-05-08 0000886128 fcel:TwoThousandEighteenOmnibusIncentivePlanMember 2019-08-26 0000886128 fcel:TwoThousandEighteenOmnibusIncentivePlanMember 2020-10-31 0000886128 fcel:TwoThousandEighteenOmnibusIncentivePlanMember 2020-08-23 2020-08-24 0000886128 2020-08-23 2020-08-24 0000886128 us-gaap:CostOfSalesMember 2017-11-01 2018-10-31 0000886128 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2019-11-01 2020-10-31 0000886128 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2018-11-01 2019-10-31 0000886128 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2017-11-01 2018-10-31 0000886128 us-gaap:ResearchAndDevelopmentExpenseMember 2019-11-01 2020-10-31 0000886128 us-gaap:ResearchAndDevelopmentExpenseMember 2018-11-01 2019-10-31 0000886128 us-gaap:ResearchAndDevelopmentExpenseMember 2017-11-01 2018-10-31 0000886128 fcel:ExercisePriceRangeBetweenZeroPointZeroZeroAndThirtyEightPointSeventySixMember 2019-11-01 2020-10-31 0000886128 fcel:ExercisePriceRangeBetweenThirtyEightPointSeventySevenAndFourHundredSixteenPointSixteenMember 2019-11-01 2020-10-31 0000886128 fcel:ExercisePriceRangeBetweenZeroPointZeroZeroAndThirtyEightPointSeventySixMember 2020-10-31 0000886128 fcel:ExercisePriceRangeBetweenThirtyEightPointSeventySevenAndFourHundredSixteenPointSixteenMember 2020-10-31 0000886128 fcel:PresidentAndChiefExecutiveMember us-gaap:RestrictedStockMember 2019-11-01 2020-10-31 0000886128 us-gaap:RestrictedStockMember fcel:LongTermIncentivePlanMember 2020-08-23 2020-08-24 0000886128 us-gaap:RestrictedStockMember 2022-08-26 0000886128 us-gaap:RestrictedStockMember 2019-11-01 2020-10-31 0000886128 us-gaap:PerformanceSharesMember 2019-11-01 2020-10-31 0000886128 fcel:TimeBasedAwardsMember 2019-11-01 2020-10-31 0000886128 fcel:TotalShareholderReturnPerformanceSharesMember 2019-11-01 2020-10-31 0000886128 fcel:TotalShareholderReturnPerformanceSharesMember 2020-10-31 0000886128 fcel:AbsolutePerformanceSharesMember 2019-11-01 2020-10-31 0000886128 fcel:AbsolutePerformanceSharesMember 2020-10-31 0000886128 fcel:RestrictedStockAwardsAndRestrictedStockUnitsMember 2019-11-01 2020-10-31 0000886128 us-gaap:EmployeeStockMember srt:MaximumMember 2018-10-31 0000886128 fcel:EmployeeStockPurchasePlanMember 2020-10-31 0000886128 2017-11-01 2017-12-31 0000886128 us-gaap:InProcessResearchAndDevelopmentMember 2019-11-01 2020-10-31 0000886128 us-gaap:DomesticCountryMember srt:MinimumMember 2019-11-01 2020-10-31 0000886128 us-gaap:DomesticCountryMember srt:MaximumMember 2019-11-01 2020-10-31 0000886128 us-gaap:StateAndLocalJurisdictionMember srt:MinimumMember 2019-11-01 2020-10-31 0000886128 us-gaap:StateAndLocalJurisdictionMember srt:MaximumMember 2019-11-01 2020-10-31 0000886128 us-gaap:DomesticCountryMember 2020-10-31 0000886128 us-gaap:StateAndLocalJurisdictionMember 2020-10-31 0000886128 us-gaap:SeriesAMember 2019-11-01 2020-10-31 0000886128 us-gaap:SeriesAMember 2018-11-01 2019-10-31 0000886128 us-gaap:SeriesAMember 2017-11-01 2018-10-31 0000886128 us-gaap:SeriesCPreferredStockMember 2019-11-01 2020-10-31 0000886128 fcel:OrionWarrantsMember 2019-11-01 2020-10-31 0000886128 fcel:OrionWarrantsMember 2018-11-01 2019-10-31 0000886128 fcel:SeriesCWarrantsMember 2019-11-01 2020-10-31 0000886128 fcel:SeriesCWarrantsMember 2018-11-01 2019-10-31 0000886128 fcel:SeriesCWarrantsMember 2017-11-01 2018-10-31 0000886128 fcel:SeriesAWarrantMember 2017-11-01 2018-10-31 0000886128 us-gaap:EmployeeStockOptionMember 2019-11-01 2020-10-31 0000886128 us-gaap:EmployeeStockOptionMember 2018-11-01 2019-10-31 0000886128 us-gaap:EmployeeStockOptionMember 2017-11-01 2018-10-31 0000886128 fcel:UnvestedRestrictedStockAwardsMember 2019-11-01 2020-10-31 0000886128 fcel:UnvestedRestrictedStockAwardsMember 2018-11-01 2019-10-31 0000886128 fcel:UnvestedRestrictedStockAwardsMember 2017-11-01 2018-10-31 0000886128 fcel:UnvestedRestrictedStockUnitsMember 2019-11-01 2020-10-31 0000886128 fcel:UnvestedRestrictedStockUnitsMember 2018-11-01 2019-10-31 0000886128 fcel:UnvestedRestrictedStockUnitsMember 2017-11-01 2018-10-31 0000886128 us-gaap:SeriesCPreferredStockMember 2017-11-01 2018-10-31 0000886128 us-gaap:SeriesDPreferredStockMember 2017-11-01 2018-10-31 0000886128 fcel:SeriesBCumulativePreferredStockMember 2019-11-01 2020-10-31 0000886128 fcel:SeriesBCumulativePreferredStockMember 2018-11-01 2019-10-31 0000886128 fcel:SeriesBCumulativePreferredStockMember 2017-11-01 2018-10-31 0000886128 fcel:Series1PreferredSharesMember 2018-11-01 2019-10-31 0000886128 fcel:Series1PreferredSharesMember 2017-11-01 2018-10-31 0000886128 fcel:PoscoEnergyMember 2020-04-27 2020-04-27 0000886128 fcel:PoscoEnergyMember 2020-06-28 2020-06-28 0000886128 2020-10-30 2020-10-31 0000886128 fcel:PoscoEnergyMember 2020-09-14 2020-09-14 0000886128 2020-02-01 2020-04-30 0000886128 2020-05-01 2020-07-31 0000886128 2020-08-01 2020-10-31 0000886128 us-gaap:SeriesBPreferredStockMember 2019-11-01 2020-01-31 0000886128 us-gaap:SeriesBPreferredStockMember 2020-02-01 2020-04-30 0000886128 us-gaap:SeriesBPreferredStockMember 2020-05-01 2020-07-31 0000886128 us-gaap:SeriesBPreferredStockMember 2020-08-01 2020-10-31 0000886128 2019-02-01 2019-04-30 0000886128 2019-05-01 2019-07-31 0000886128 2019-08-01 2019-10-31 0000886128 us-gaap:SeriesAMember 2019-02-01 2019-04-30 0000886128 us-gaap:SeriesBPreferredStockMember 2018-11-01 2019-01-31 0000886128 us-gaap:SeriesBPreferredStockMember 2019-02-01 2019-04-30 0000886128 us-gaap:SeriesBPreferredStockMember 2019-05-01 2019-07-31 0000886128 us-gaap:SeriesBPreferredStockMember 2019-08-01 2019-10-31 0000886128 us-gaap:SeriesCPreferredStockMember 2018-11-01 2019-01-31 0000886128 us-gaap:SeriesCPreferredStockMember 2019-02-01 2019-04-30 0000886128 us-gaap:SeriesCPreferredStockMember 2019-05-01 2019-07-31 0000886128 us-gaap:SeriesDPreferredStockMember 2018-11-01 2019-01-31 0000886128 us-gaap:SeriesDPreferredStockMember 2019-02-01 2019-04-30 0000886128 us-gaap:SeriesDPreferredStockMember 2019-05-01 2019-07-31 0000886128 us-gaap:SeriesDPreferredStockMember 2019-08-01 2019-10-31 0000886128 us-gaap:SubsequentEventMember fcel:UnderwritingAgreementMember 2020-12-01 0000886128 us-gaap:SubsequentEventMember srt:MaximumMember fcel:UnderwritingAgreementMember 2020-12-01 2020-12-01 0000886128 us-gaap:SubsequentEventMember fcel:UnderwritingAgreementMember 2020-12-01 2020-12-01 0000886128 us-gaap:SubsequentEventMember fcel:UnderwritingAgreementMember 2020-12-04 2020-12-04 0000886128 us-gaap:SubsequentEventMember 2020-12-04 0000886128 us-gaap:CommonStockMember fcel:OrionCreditAgreementMember srt:MinimumMember us-gaap:SubsequentEventMember 2020-12-04 0000886128 us-gaap:SubsequentEventMember fcel:PayoffLetterMember 2020-12-07 0000886128 us-gaap:SubsequentEventMember fcel:PayoffLetterMember 2020-12-07 2020-12-07 0000886128 us-gaap:SubsequentEventMember fcel:PayoffLetterMember 2020-11-30 2020-11-30 0000886128 us-gaap:SubsequentEventMember fcel:PayoffLetterMember srt:MaximumMember 2020-12-07 2020-12-07 0000886128 us-gaap:SubsequentEventMember fcel:OrionCreditAgreementMember 2020-12-07 0000886128 us-gaap:SubsequentEventMember fcel:OrionCreditAgreementMember 2020-12-07 2020-12-07 0000886128 us-gaap:SubsequentEventMember fcel:PayoffLetterMember fcel:EnbridgeIncMember 2020-12-31 0000886128 us-gaap:SubsequentEventMember fcel:PayoffLetterMember fcel:EnbridgeIncMember 2020-12-17 2020-12-18

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 31, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to

Commission file number: 1-14204

 

FUELCELL ENERGY, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

06-0853042

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

 

 

3 Great Pasture Road

 

 

Danbury, Connecticut

 

06810

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (203825-6000

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol (s)

 

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

 

FCEL

 

The Nasdaq Stock Market LLC (Nasdaq Global Market)

 

Securities registered pursuant to Section 12(g) of the Act: None

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer 

 

Accelerated filer 

 

Non-accelerated filer 

 

Smaller reporting company 

 

 

 

 

 

 

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of April 30, 2020, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $426,040,826 based on the closing sale price of $2.02 as reported on the NASDAQ Global Market.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

 

Class

 

Outstanding at January 15, 2021

Common Stock, $0.0001 par value per share

 

322,412,341

DOCUMENT INCORPORATED BY REFERENCE

 

Document

 

Parts Into Which Incorporated

Definitive Proxy Statement for the 2021 Annual Meeting of Stockholders

 

Part III

 


 

FUELCELL ENERGY, INC.

INDEX

 

 

 

Page

Description

 

Number

Part I

 

 

 

 

 

Item 1 Business

 

3

 

 

 

Item 1A Risk Factors

 

42

 

 

 

Item 1B Unresolved Staff Comments

 

60

 

 

 

Item 2 Properties

 

60

 

 

 

Item 3 Legal Proceedings

 

60

 

 

 

Item 4 Mine Safety Disclosures

 

61

 

 

 

Part II

 

 

 

 

 

Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

62

 

 

 

Item 6 Selected Financial Data

 

65

 

 

 

Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

67

 

 

 

Item 7A Quantitative and Qualitative Disclosures About Market Risk

 

91

 

 

 

Item 8 Consolidated Financial Statements and Supplementary Data

 

92

 

 

 

Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

146

 

 

 

Item 9A Controls and Procedures

 

146

 

 

 

Item 9B Other Information

 

147

 

 

 

Part III

 

 

 

 

 

Item 10 Directors, Executive Officers and Corporate Governance

 

148

 

 

 

Item 11 Executive Compensation

 

148

 

 

 

Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

148

 

 

 

Item 13 Certain Relationships and Related Transactions, and Director Independence

 

148

 

 

 

Item 14 Principal Accounting Fees and Services

 

149

 

 

 

Part IV

 

 

 

 

 

Item 15 Exhibits and Financial Statement Schedules

 

149

 

 

 

Item 16 Form 10-K Summary

 

158

 

 

 

Signatures

 

159

 

 

 

2


 

PART I

Item 1.

BUSINESS

 

Index to Item 1. BUSINESS

 

Page

 

 

 

Forward-Looking Statement Disclaimer

 

4

 

 

 

Risk Factor Summary

 

6

 

 

 

Background

 

7

 

 

 

Additional Technical Terms and Definitions

 

8

 

 

 

At a Glance

 

10

 

 

 

Overview

 

10

 

 

 

Business Model, Strategy and Competitive Advantages

 

11

 

 

 

Products

 

14

 

 

 

Advanced Technologies Programs

 

18

 

 

 

Markets

 

23

 

 

 

Growth and Market Adoption Targets

 

25

 

 

 

Manufacturing and Service Facilities

 

27

 

 

 

Raw Materials and Supplier Relationships

 

29

 

 

 

Engineering, Procurement and Construction

 

29

 

 

 

Services and Warranty Agreements

 

29

 

 

 

License Agreements and Royalty Income; Relationship with POSCO Energy

 

30

 

 

 

Company Funded Research and Development

 

32

 

 

 

Backlog

 

33

 

 

 

Competition

 

33

 

 

 

Regulatory and Legislative Environment

 

35

 

 

 

Government Regulation

 

36

 

 

 

Proprietary Rights and Licensed Technology

 

36

 

 

 

Significant Customers and Information about Geographic Areas

 

37

 

 

 

Sustainability

 

38

 

 

 

Human Capital Resources

 

39

 

 

 

Available Information

 

39

 

3

 


 

Forward-Looking Statement Disclaimer

This Annual Report on Form 10-K contains statements that the Company believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). All statements other than statements of historical fact included in this Form 10-K, including statements regarding the Company’s future financial condition, results of operations, plans, objectives, expectations, future performance, business operations and business prospects, are forward-looking statements. Words such as “expects,” “anticipates,” “estimates,” “goals,” “projects,” “intends,” “plans,” “believes,” “predicts,” “should,” “seeks,” “will,” “could,” “would,” “may,” “forecast,” and similar expressions and variations of such words are intended to identify forward-looking statements and are included, along with this statement, for purposes of complying with the safe harbor provisions of the PSLRA. Forward-looking statements are neither historical facts, nor assurances of future performance. Instead, such statements are based only on our beliefs, expectations and assumptions regarding the future. As such, the realization of matters expressed in forward looking statements involves inherent risks and uncertainties. Such statements relate to, among other things, the following:

 

the development and commercialization by FuelCell Energy, Inc. and its subsidiaries (“FuelCell Energy,” “Company,” “we,” “us” and “our”) of fuel cell technology and products and the market for such products,

 

expected operating results such as revenue growth and earnings,

 

our belief that we have sufficient liquidity to fund our business operations,

 

future funding under Advanced Technologies contracts,

 

future financing for projects, including publicly issued bonds, equity and debt investments by investors and commercial bank financing,

 

the expected cost competitiveness of our technology, and

 

our ability to achieve our sales plans, market access and market expansion goals, and cost reduction targets.

The forward-looking statements contained in this report are subject to risks and uncertainties, known and unknown, that could cause actual results and future events to differ materially from those set forth in or contemplated by the forward-looking statements, including, without limitation, the risks described under Item 1A - Risk Factors of this report and the following factors:

 

general risks associated with product development and manufacturing,

 

general economic conditions,

 

changes in the utility regulatory environment,    

 

changes in the utility industry and the markets for Distributed Generation, Distributed Hydrogen, and fuel cell power plants configured for Carbon Capture or Carbon Separation,

 

potential volatility of energy prices,

 

availability of government subsidies and economic incentives for alternative energy technologies,

 

our ability to remain in compliance with U.S. federal and state and foreign government laws and regulations and the listing rules of The Nasdaq Stock Market (“Nasdaq”),

 

rapid technological change,

 

competition,

 

the risk that our bid awards will not convert to contracts or that our contracts will not convert to revenue,

 

market acceptance of our products,

 

changes in accounting policies or practices adopted voluntarily or as required by accounting principles generally accepted in the United States (“GAAP”),

4

 


 

 

factors affecting our liquidity position and financial condition,

 

government appropriations,

 

the ability of the government and third parties to terminate their development contracts at any time,

 

the ability of the government to exercise “march-in” rights with respect to certain of our patents,

 

the arbitration and other legal proceedings with POSCO Energy Co., Ltd. (“POSCO Energy”),

 

our ability to implement our strategy,

 

our ability to reduce our levelized cost of energy and our cost reduction strategy generally,

 

our ability to protect our intellectual property,

 

litigation and other proceedings,

 

the risk that commercialization of our products will not occur when anticipated,

 

our need for and the availability of additional financing,

 

our ability to generate positive cash flow from operations,

 

our ability to service our long-term debt,

 

our ability to increase the output and longevity of our power plants and to meet the performance requirements of our contracts,

 

our ability to expand our customer base and maintain relationships with our largest customers and strategic business allies,

 

changes by the U.S. Small Business Administration (the “SBA”) or other governmental authorities to, or with respect to the implementation or interpretation of, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the Paycheck Protection Program or related administrative matters, and

 

concerns with, threats of, or the consequences of, pandemics, contagious diseases or health epidemics, including the 2019 novel coronavirus (“COVID-19”), and resulting supply chain disruptions, shifts in clean energy demand, impacts to our customers’ capital budgets and investment plans, impacts to our project schedules, impacts to our ability to service existing projects, and impacts on the demand for our products.

We cannot assure you that:

 

we will be able to meet any of our development or commercialization schedules,

 

any of our new products or technology, once developed, will be commercially successful,

 

our SureSource power plants will be commercially successful,

 

the government will appropriate the funds anticipated by us under our government contracts,

 

the government will not exercise its right to terminate any or all of our government contracts, or

 

we will be able to achieve any other result anticipated in any other forward-looking statement contained herein.

The forward-looking statements contained herein speak only as of the date of this report and readers are cautioned not to place undue reliance on these forward-looking statements. Except for ongoing obligations to disclose material information under the federal securities laws, we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based.

5

 


 

Risk Factor Summary

 

Our business is subject to numerous risks and uncertainties, including those described in Item 1A “Risk Factors”. These risks include, but are not limited to the following:

 

 

We have a limited number of shares of common stock available for issuance, which limits our ability to raise equity capital.

 

Our business and operations may be adversely affected by the COVID-19 outbreak or other similar outbreaks.

 

Our Paycheck Protection Program loan (“PPP Loan”) may not be forgiven, may subject us to challenges regarding qualification for the PPP Loan, enforcement actions, fines and penalties, and has resulted in an informal SEC inquiry into our financial disclosures.

 

We have incurred losses and anticipate continued losses and negative cash flows. Our cost reduction strategy may not succeed or may be significantly delayed, which may result in our inability to deliver improved margins.

 

We have debt outstanding and may incur additional debt in the future, which may adversely affect our financial condition and future financial results.

 

Unanticipated increases or decreases in business growth may result in adverse financial consequences for us.

 

If our goodwill and other intangible assets, long-lived assets, inventory or project assets become impaired, we may be required to record a significant charge to operations.

 

Our Advanced Technologies contracts are subject to the risk of termination by the contracting party and we may not realize the full amounts allocated under some contracts due to the lack of Congressional appropriations or early termination.

 

Utility companies may resist the adoption of Distributed Generation (as defined below) and could impose customer fees or interconnection requirements on our customers that could make our products less desirable.

 

We depend on third party suppliers for the development and supply of key raw materials and components for our products.

 

We derive significant revenue from contracts awarded through competitive bidding processes involving substantial costs and risks. Our contracted projects may not convert to revenue, and our project awards and sales pipeline may not convert to contracts, which may have a material adverse effect on our revenue and cash flows.

 

We have signed product sales contracts, engineering, procurement and construction contracts (“EPCs”), power purchase agreements (“PPAs”) and long-term service agreements with customers subject to contractual, technology, operating and commodity risks as well as market conditions that may affect our operating results.

 

We extend product warranties for our products, which products are complex and could contain defects and may not operate at expected performance levels, which could impact sales and market adoption of our products, affect our operating results or result in claims against us.

 

We currently face and will continue to face significant competition, including from products using other energy sources that may be lower priced or have preferred environmental characteristics. Our plans are dependent on market acceptance of our products.

 

Our products use inherently dangerous, flammable fuels, operate at high temperatures and use corrosive carbonate material, each of which could subject our business to product liability claims.

 

We are increasingly dependent on information technology, and disruptions, failures or security breaches of our information technology infrastructure could have a material adverse effect on our operations and the operations of our power plant platforms. In addition, increased information technology security threats and more sophisticated computer crime pose a risk to our systems, networks, products and services.

6

 


 

 

We are required to maintain effective internal control over financial reporting. Our management previously identified a material weakness in our internal control over financial reporting which was remediated in the fourth quarter of fiscal year 2020. If other control deficiencies are identified in the future, we may not be able to report our financial results accurately, prevent fraud or file our periodic reports in a timely manner, which may adversely affect investor confidence in our Company and, as a result, the value of our common stock.

 

Our results of operations could vary as a result of changes to our accounting policies or the methods, estimates and judgments we use in applying our accounting policies.

 

We may be affected by environmental and other governmental regulation.

 

A negative government audit could result in an adverse adjustment of our revenue and costs and could result in civil and criminal penalties.

 

Exports of certain of our products are subject to various export control regulations and may require a license or permission from the U.S. Department of State, the U.S. Department of Energy or other agencies.

 

Provisions of Delaware and Connecticut law and of our certificate of incorporation and by-laws may make a takeover more difficult. Our by-laws provide that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a judicial forum deemed favorable by the stockholder for disputes with us or our directors, officers or employees.

 

We will need to raise additional capital, and such capital may not be available on acceptable terms, if at all. If we do raise additional capital utilizing equity, existing stockholders will suffer dilution. If we do not raise additional capital, our business could fail or be materially and adversely affected.

 

We depend on our intellectual property, and our failure to protect that intellectual property could adversely affect our future growth and success. The U.S. government has certain rights relating to our intellectual property, including the right to restrict or take title to certain patents.

 

Our stock price has been and could remain volatile. Financial markets worldwide have experienced heightened volatility and instability which may have a material adverse impact on our Company, our customers and our suppliers.

 

Future sales of substantial amounts of our common stock could affect the market price of our common stock.

 

The rights of our 5% Series B Cumulative Convertible Perpetual Preferred Stock (“Series B Preferred Stock”) could negatively impact our cash flows and dilute the ownership interest of our common stockholders. The Series B Preferred Stock ranks senior to our common stock with respect to payments upon liquidation, dividends and distributions.

 

Litigation could expose us to significant costs and adversely affect our business, financial condition, and results of operations. The pending legal proceedings with POSCO Energy could expose us to costs of such legal proceedings or an adverse judgment.

 

Our future success will depend on our ability to attract and retain qualified management, technical and other personnel.

 

We are subject to risks inherent in international operations.

 

Background

Information contained in this report concerning the electric power supply industry and the Distributed Generation market, the Distributed Hydrogen market, the energy storage market and the Carbon Capture market, our general expectations concerning these industries and markets, and our position within these industries and markets are based on market research, industry publications, other publicly available information and assumptions made by us based on this information and our knowledge of these industries and markets, which we believe to be reasonable. Although we believe that the market research, industry publications and other publicly available information, including the sources that we cite in this report, are reliable, they have not been independently verified by us and,

7

 


 

accordingly, we cannot assure you that such information is accurate in all material respects. Our estimates, particularly as they relate to our general expectations concerning the electric power supply industry and the Distributed Generation market, the Distributed Hydrogen market, the energy storage market and the Carbon Capture market, involve risks and uncertainties and are subject to change based on various factors, including those discussed under Item 1A - Risk Factors of this report.

As used in this report, all degrees refer to Fahrenheit (“F”); kilowatt (“kW”) and megawatt (“MW”) numbers designate nominal or rated capacity of the referenced power plant; “efficiency” or “electrical efficiency” means the ratio of the electrical energy generated in the conversion of a fuel to the total energy contained in the fuel (lower heating value, the standard for power plant generation, assumes the water in the product is in vapor form; as opposed to higher heating value, which assumes the water in the product is in liquid form, net of parasitic load); kW means 1,000 watts; MW means 1,000,000 watts; “kilowatt hour” (“kWh”) is equal to 1kW of power supplied to or taken from an electric circuit steadily for one hour; and one British Thermal Unit (“Btu”) is equal to the amount of heat necessary to raise one pound of pure water from 59oF to 60oF at a specified constant pressure.

All dollar amounts are in U.S. dollars unless otherwise noted.

 

Additional Technical Terms and Definitions

 

Advanced Technologies - Advanced Technologies projects involve the development of new products or applications based on existing carbonate or solid oxide technologies or new electrochemical technologies. Examples are Carbon Capture, Distributed Hydrogen, Solid Oxide Fuel Cells and Solid Oxide Electrolysis Cell technologies. Advanced Technologies projects are typically externally funded by government or private sources and executed by our Advanced Technologies Group.

Availability - A measure of the amount of time a system is available to operate, as a fraction of total calendar time. For power generation equipment, an industry standard (IEEE (The Institute of Electrical and Electronics Engineers) 762, “Definitions for Use in Reporting Electric Generating Unit Reliability, Availability and Productivity”) is used to compute Availability. “Availability percentage” is calculated as total period hours since Commercial Operations Date less hours not producing electricity due to planned and unplanned maintenance divided by total period hours. Grid disturbances, force majeure events and site-specific issues such as a lack of available fuel supply or customer infrastructure repair do not penalize the calculation of Availability according to this standard.

Carbonate Fuel Cell - Carbonate Fuel Cells, such as the fuel cell power plants produced and sold by FuelCell Energy, are high-temperature fuel cells that use an electrolyte composed of a carbonate salt mixture suspended in a porous, chemically inert ceramic-based matrix. Carbonate Fuel Cells operate at high temperatures, enabling the use of a nickel-based catalyst, a lower cost alternative to precious metal catalysts used in some other fuel cell technologies.

Carbon Capture – The process of extracting dilute carbon dioxide from the flue gas exhaust of fossil or Biogas fueled power plants or thermal processes and purifying the carbon dioxide to the purity required for sequestration or utilization.  Carbon Capture is conventionally done using absorption systems that require energy to produce high purity carbon dioxide.  Carbon Capture can also be done with Carbonate Fuel Cell systems while they produce power.  To our knowledge, this ability to capture carbon dioxide from a power plant or boiler while producing additional power is unique to Carbonate Fuel Cell systems.

Carbon Separation – The process of extracting carbon dioxide from a Carbonate Fuel Cell system or Solid Oxide Fuel Cell system to reduce or eliminate carbon dioxide emissions.  Carbon Separation does not involve carbon dioxide from an external source, as in Carbon Capture, but is the extraction and purification of carbon dioxide produced internally by the fuel cell from a fossil or Biogas fuel. Extracted carbon dioxide can be sequestered or used in industrial or food and beverage applications.

Combined Heat & Power - A power plant configuration or mode of operation featuring simultaneous on-site generation from the same unit of fuel of both electricity and heat with the heat used to produce steam, hot water or heated air for both heating and cooling applications.

Commercial Operations Date - The date that testing and commissioning of a fuel cell project is completed, and the fuel cell power plant is operational with power being generated and sold to the end-user.

8

 


 

Distributed Generation - Electric power that is generated where it is needed (distributed throughout the power grid) rather than from a central location. Centrally generated power requires extensive transmission networks that require maintenance and experience efficiency losses during transmission while Distributed Generation does not. Distributed Generation is typically classified as small to mid-size power plants, typically generating 75 MW or less. Central generation is typically classified as large power plants generating hundreds or even thousands of MW.

Distributed Hydrogen – Hydrogen that is produced near the end user or users of the hydrogen, rather than from a central location.  Large central hydrogen production plants create emissions in their operations and add cost and additional emissions by needing to deliver the gas over long distances to end users.  Distributed Hydrogen can be provided by Carbonate Fuel Cell based Trigeneration systems or Solid Oxide Electrolysis Cell based systems.

Hydrogen Based Long Duration Energy Storage – Energy storage involving the production of hydrogen from power by electrolysis, where hydrogen is stored to be used later to produce power.  The storage duration can be extended to long periods of time by providing sufficient hydrogen storage.  High round trip storage efficiency can be achieved if the electrolysis and power generation processes are each high efficiency processes, such as Solid Oxide Electrolysis Cell based systems and Solid Oxide Fuel Cell based systems, or systems using Reversible Solid Oxide Fuel Cell stacks that alternate between fuel cell and electrolysis mode.

Microgrids - Microgrids are localized electric grids that can disconnect from the traditional electric grid to operate autonomously and strengthen grid resiliency. Microgrids can be composed only of SureSource power plants due to their continual power output or combine a variety of power generation types such as fuel cells and solar arrays.

Nitrogen Oxides (“NOx”) - Generic term for a group of highly reactive gases, all of which contain nitrogen and oxygen in varying amounts. Many of the NOx are colorless and odorless; however, they are a major precursor to smog production and acid rain. One common pollutant, Nitrogen Dioxide, along with particles in the air, can often be seen as a reddish-brown layer over an urban area. NOx form when fuel is burned at high temperatures, as in a combustion process. The primary manmade sources of NOx are motor vehicles, traditional fossil fuel fired electric utility generation, and other industrial, commercial and residential sources that burn fuels.

Particulate Matter (“PM”) - Solid or liquid particles emitted into the air that are generally caused by the combustion of materials or dust generating activities. Particulate Matter caused by combustion can be harmful to humans as the fine particles of chemicals, acids and metals may get lodged in lung tissue.

Power Purchase Agreement (“PPA”) - A Power Purchase Agreement is a contract that enables a power user to purchase energy under a long-term contract where the user agrees to pay a predetermined rate for the kilowatt-hours delivered from a power generating asset while avoiding the need to own the equipment and pay the upfront capital cost. The PPA rate is typically fixed (with an escalation clause tied to a consumer price index or similar index) or pegged to a floating index that is on par with or below the current electricity rate being charged by the local utility company. A PPA is typically for a term of 10 to 20 years.

Reformer / Electrolyzer / Purifier (“REP”) – A system which uses a Carbonate Fuel Cell stack (or stacks) in reverse mode (consuming power instead of producing power) to produce hydrogen by electrolysis simultaneous with production of hydrogen from a hydrocarbon fuel by reforming.  The Carbonate Fuel Cell reactions also purify the hydrogen by transferring carbon dioxide from the hydrogen stream.

Renewable Biogas or Biogas - Renewable Biogas is fuel produced by biological breakdown of organic material. Biogas is commonly produced in biomass digesters employing bacteria in a heated and controlled oxygen environment. These digesters are typically used at wastewater treatment facilities or food processors to break down solid waste and the Biogas produced is a byproduct of the waste digestion. Biogas can be used as a renewable fuel source for SureSource fuel cell plants located on site where the Biogas is produced with gas cleanup, or it can be processed further to meet pipeline fuel standards and injected into a gas pipeline network, which is termed “Directed Biogas”. Directed Biogas requires additional processing to increase the Btu content of the gas, which increases cost and consumes power. Use of Biogas at the point of production (on-site) is more efficient and more economical.

Reversible Solid Oxide Fuel Cell (“RSOFC”) – Reversible Solid Oxide Fuel Cell systems use solid oxide cell stacks that alternate between operation in electrolysis mode (as SOEC stacks) or power generation mode (as SOFC stacks).  The ability to use one stack set for both processes reduces cost in Hydrogen Based Long Duration Energy Storage systems.

9

 


 

Solid Oxide Electrolysis Cell (“SOEC”) - Solid Oxide Electrolysis Cells are electrochemical cells with the same cell and stack structure as Solid Oxide Fuel Cells, but are operated in reverse – instead of producing power from fuel and oxygen, SOEC cells produce hydrogen and oxygen from steam when supplied with power.

Solid Oxide Fuel Cell (“SOFC”) - Solid Oxide Fuel Cells are electrochemical cells with a non-porous ceramic material as the electrolyte. SOFCs operate at high temperatures (slightly higher than Carbonate Fuel Cells) eliminating the need for costly precious-metal catalysts, thereby reducing cost. Like Carbonate Fuel Cells, the high operating temperature enables internal reforming of the hydrogen rich fuel source. The Solid Oxide Fuel Cell platform can be operated in fuel cell mode (producing power from fuel) or electrolysis mode (producing hydrogen from power) and can alternate between the two.

Sulfur Oxide (“SOx”) - Sulfur oxide refers to any one of the following: sulfur monoxide, sulfur dioxide (“SO2”) and sulfur trioxide. SO2 is a byproduct of various industrial processes. Coal and petroleum contain sulfur compounds and generate SO2 when burned. SOx compounds are particulate and acid rain precursors.

 

At a Glance

 

Today, FuelCell Energy is a global leader in sustainable clean energy technologies that address some of the world’s most critical challenges around energy, safety and global urbanization.  In the future, FuelCell Energy plans to commercialize our hydrogen and carbon capture technologies intended to drive next generation solutions as the world strives for a smaller carbon footprint.

 

Overview

 

As a leading global manufacturer of proprietary fuel cell technology platforms, we are uniquely positioned to serve customers worldwide with sustainable products and solutions for businesses, utilities, governments, and municipalities. FuelCell Energy’s solutions are designed to enable a world empowered by clean energy, enhancing the quality of life for people around the globe. We target large-scale power users with our megawatt-class installations globally, and currently offer sub-megawatt solutions for smaller power consumers in Europe.  To provide a frame of reference, one megawatt is adequate to continually power approximately 1,000 average sized U.S. homes. Our customer base includes utility companies, municipalities, universities, hospitals, government entities/military bases and a variety of industrial and commercial enterprises.  Our leading geographic markets are currently the United States and South Korea, and we are pursuing opportunities in other countries around the world.

 

History

 

FuelCell Energy, based in Connecticut, was founded in 1969 as a New York corporation to provide applied research and development services on a contract basis. We completed our initial public offering in 1992 and reincorporated in Delaware in 1999. We began selling stationary fuel cell power plants commercially in 2003.

 

Leadership

 

We believe our leadership in clean energy has significant benefits for our customers and the sustainability of our planet.

 

 

Early Mover: We aim to be a leader in key areas of the clean energy value chain. We have the only fuel cell that is California Air Resource Board (“CARB”) certified utilizing Biogas. Our proprietary Carbon Capture solution is the only solution that we know of that produces power rather than consuming it and is also capable of producing hydrogen for distributed applications and electrolysis.

 

 

Customer Enablement: Our fuel cell platforms are designed to be clean, efficient and reliable and help our customers achieve their sustainability goals while meeting their critical business needs. These efficient and environmentally friendly products support the “Triple Bottom Line” concept of sustainability, consisting of environmental, social and economic considerations.

 

 

Intellectual Property: FuelCell Energy’s innovation is embodied in our intellectual property, including 102 U.S. patents and 186 patents in other jurisdictions covering our fuel cell technology (in certain cases covering the same technology in multiple jurisdictions).

 

10

 


 

 

International Standard Pacesetter: FuelCell Energy is certified for compliance to ISO 14001:2015 which allows organizations to improve environmental performance through more efficient use of resources and reduction of waste.

 

 

Engineered for Reuse: Our solutions are engineered for recycling and reuse, which sets us apart from other sources of clean energy technology such wind turbines, solar cells and batteries that are typically discarded in landfills.

 

Our Team

 

Our senior leadership team is comprised of industry veterans, representing over 200 years of collective experience in the power industry, alternative energy, advanced manufacturing and disruptive technologies.

Business Model, Strategy and Competitive Advantages

 

Our Business Model

 

Our business model is based on multiple revenue streams, including power platform and component sales; recurring service revenue, mainly through long-term service agreements; recurring electricity, capacity and renewable attribute sales under PPAs and tariffs for projects we retain in our generation portfolio; and revenue from public and private industry research contracts under Advanced Technologies.

 

We are a complete solutions provider, controlling the design, manufacturing, sales, installation, operations and maintenance of our patented fuel cell technology under long-term power purchase and service agreements. When utilizing long-term PPAs, the end-user of the power or utility hosts the installation and only pays for power as it is delivered, avoiding up-front capital investment. We also develop projects and sell equipment directly to customers, providing a complete solution of engineering, installing and servicing the fuel cell power plant under an engineering, procurement and construction agreement (“EPC”) and a long-term maintenance and service agreement. FuelCell Energy maintains the long-term recurring service obligation and associated revenues running conterminous with the life of such projects.

 

Our Product Offerings and Opportunities

 

FuelCell Energy is focused on using our proprietary technology to pursue four significant energy opportunities, each of which we believe is important to the achievement of the global energy transition currently underway, and which promote desired sustainability and environmental stewardship outcomes.

 

 

1.

Distributed Generation

 

 

a.

Microgrid/Grid Resiliency

 

 

b.

Combined Heat & Power (“CHP”)

 

 

c.

Carbon Capture, Separation and Utilization

 

d.

Multi-Fuel Capabilities

 

2.

Distributed Hydrogen

 

 

a.

Hydrogen production at the point of use, removing transportation cost

 

b.

Hydrogen co-produced with power, water, and thermal energy

 

3.

Hydrogen Energy Storage and Hydrogen Power Generation

 

a.

High Efficiency Solid Oxide Electrolysis

b. Carbonate Electrolysis with Reforming and Purification

 

c. Carbon free power generation

d. Unlimited storage opportunity

11

 


 

 

4.

Carbon Capture

 

a. Capture carbon while simultaneously producing power to offset the costs of Carbon Capture

b. Climate mitigation reduce CO2 emissions

c. Enables the continued use of abundant fossil fuels

 

FuelCell Energys technology across these four opportunities creates significant optionality for the Company.  

 

To date, the Company has delivered commercial Distributed Generation solutions to our customers. As further described below, we are in the process of commercializing solutions for Distributed Hydrogen, Hydrogen Energy Storage, Hydrogen Power Generation and Carbon Capture.

 

We market different configurations and applications of our SureSource platform to meet specific market needs, including:

 

 

On-Site Power (Behind the Meter): Customers benefit from improved power reliability and energy security from on-site power that reduces reliance on the electric grid in an environmentally responsible manner. Utilization of the high-quality thermal energy produced by the fuel cell in a CHP configuration supports economic and sustainability goals by lessening or even avoiding the need for combustion-based boilers for heat and its associated cost, pollutants and carbon emissions. Heat can be used to produce hot water or steam or to drive high efficiency absorption chillers for cooling applications for commercial and industrial customers. The SureSource platform can also deliver hydrogen and carbon dioxide for product use such as the production of dry ice.

 

 

Utility Grid Support: Our SureSource power platforms are scalable, which enables siting multiple fuel cell power plants together in a fuel cell park. Fuel cell parks enable utilities to add clean and continuous multi-megawatt power generation on a very small footprint when and where needed and enhance the resiliency of the electric grid by reducing reliance on large central generation plants and the associated transmission system. Deploying our SureSource power platforms throughout a utility service territory can also help utilities comply with government-mandated clean energy regulations, meet air quality standards, maintain continuous power output and improve grid reliability. Our fuel cells can firm-up the total utility power generation solution when combined with intermittent power generation, such as solar or wind, or less efficient combustion-based equipment that provides peaking or load following power.

 

 

Microgrid Applications: SureSource platforms can also be configured as a Microgrid, either independently or with other forms of power generation, with the goal of providing continuous power and a seamless transition during times of grid outages. We have multiple installations of our solutions operating within Microgrids, some individually and some with other forms of power generation.

 

 

Distributed Hydrogen: SureSource platforms are configurable to deliver on-site hydrogen for transportation, industrial applications, natural gas blending, and repowering combustion-based equipment with zero carbon hydrogen. The SureSource Hydrogen platform utilizes proprietary fuel cells configured to simultaneously generate three value streams power generation, hydrogen, and thermal energy.

 

 

Carbon Utilization: SureSource platforms do not combust fuel, and because fuel and air are reacted separately before mixing, carbon dioxide from the fuel is not initially diluted by air and can be easily extracted from the system for utilization or sequestration, significantly reducing the carbon footprint of the generated power. A few attractive applications for this developing Carbon Separation technology are the on-site production of carbon dioxide for industrial use, production of dry ice/ultra-cold freezing, and use in beverage and food applications.

 

 

12

 


 

Consistent with our overall strategy, our engineers and scientists focus our innovation on developing sophisticated technical solutions that meet customer needs. Our sales and marketing teams focus on presenting solutions that we expect will lead to long term and repeatable sales opportunities. We have structured our sales efforts along our differentiated capabilities and major end-user market offerings.

 

Our Long-Term Strategy

 

In 2019, we launched our Powerhouse” strategy to strengthen our business, maximize operational efficiencies and position us for future growth. Looking ahead, we have updated and may continue to update the pillars of our Powerhouse Strategy to reflect our future focus and to affirm our commitment to leadership in sustainability.

 

Transform Build a Durable Financial Foundation and Enhance Financial Results

 

Continuing from the transformational groundwork originally laid out in 2019, building balance sheet strength (including enhancing liquidity) is an ongoing focus as FuelCell Energy grows:

 

 

Enhanced liquidity: In fiscal year 2020, we executed a public offering of common stock and at-the-market sales of common stock, improving the Company’s liquidity with net proceeds during fiscal year 2020 of more than $170 million at an efficient cost of capital, which has improved the Company’s financial foundation as we work to execute our strategy.

 

 

Capital structure:  In fiscal year 2020 and subsequent to the end of the fiscal year, we enhanced our liquidity and we expect to continue to do so. In addition, we continue to focus on reducing the cost of borrowing to deliver an overall lower cost of capital, with the goal of creating a capital structure that provides for efficient financing across our platforms and subsidiaries enabled by continued deployment of our projects, advancement of our technologies, and execution of our strategy.

Strengthen Drive Operational Excellence

 

Capital deployment: Making investments that further enhance performance, advance product commercialization, reduce costs and generate target returns on our investments

 

 

Operational excellence: Executing on our project backlog; lean resource management driving rational cost management across our business

Grow Penetrate Significant Market Opportunities Where We Can Win

 

 

Optimization of core business: Capitalizing on our core technological strengths in key product markets, including biofuels, Microgrids, Distributed Hydrogen, and Carbon Separation and utilization

 

 

Commercial excellence: Strengthening customer relationships and building a customer-centric reputation; building our sales pipeline by increasing focus on targeted differentiated applications, product sales and geographic market and customer segment expansion

 

 

Innovation: Successfully delivering extended life stack modules; expanding commercialization of new technologies including proprietary gas treatment systems, advancing hydrogen and Carbon Capture, utilization, and sequestration

 

 

Geographic and market expansion: Targeting growth opportunities in South Korea and across Asia, Europe, the United States and the Middle East

The pillars and goals of our Powerhouse Strategy will continue to evolve over time as goals are met and the Company and market dynamics change.

 

13

 


 

Our Durable Competitive Advantages

 

Given the long history of investment in and deployment of our solutions, we believe the Company has competitive advantages including:

 

 

 

Innovation and Sustainability:

 

 

Intellectual property that we believe makes new entry to the market challenging

 

 

A product portfolio that consists of several technologies that are attractive based on market economics, not government mandate

 

 

Products characterized by sustainability over their full lifecycle versus other “clean” technologies such as wind turbines, solar panels and batteries for which recycling is neither economical nor practical, and that often rely on limited supply minerals, disruptive mining and geopolitical risk

 

 

Technologies that fulfill societys fundamental need for energy without requiring that users/ society change the way they live or use energy

 

 

 

Excellence:

 

 

Operational excellence programs and lean resource management aim to maximize cost- reduction opportunities while improving safety and product quality

 

 

Lean management which drives proprietary manufacturing processes that increase speed to market and cost competitiveness

 

 

Technical expertise through a high level of employee engagement with a tenured, highly skilled workforce, operating complex processes to deliver our platform solutions

 

 

Engagement & Understanding:

 

 

Strategic innovation and development relationships with the U.S. Department of Energy (“DOE”) and ExxonMobil Research and Engineering Company (“EMRE”) provide funding and encourage technology development

 

 

Geographic Footprint in the United States, Asia and Europe provides strategic channels of distribution and allows economical product support

Products

Our core fuel cell products offer clean, highly efficient and affordable power generation for customers.  The plants are scalable for multi-megawatt utility applications, Microgrid applications, Distributed Hydrogen, or use of the ‘platforms’ thermal attributes for on-site heat and chilling applications for a broad range of applications.

Our commercial product line includes:

 

SureSource 1500 TM, our 1.4 MW platform;

 

 

SureSource 3000TM, our 2.8 MW platform;

 

 

SureSource 4000TM, our 3.7 MW high efficiency platform;

 

 

SureSource 250 (Europe only), our 250 kW platform;

 

 

SureSource 400 (Europe only), our 400 kW platform; and

 

 

SureSource HydrogenTM, our 2.3 MW platform that produces 1,200 kg of hydrogen per day.   

 

Our proprietary, patented Carbonate Fuel Cell technology generates electricity directly from a hydrogen-rich fuel, such as natural gas or Renewable Biogas, by reforming the fuel inside the fuel cell to produce the needed hydrogen.  This internal, proprietary “one-step” reforming process results in a simpler, more efficient, and cost-effective energy conversion system compared with external reforming fuel cells.  Additionally, we benefit from multi-fuel capability,

14

 


 

which enables the SureSource platform to leverage the established natural gas infrastructure that is readily available in our existing and target markets, compared to some types of fuel cells that can only operate on high purity hydrogen. In addition, our proprietary gas clean-up skid technology allows us to utilize on-site Biogas as production of on-site Biogas is rapidly growing around the world.  Our fuel-flexible platforms mainly utilize clean natural gas and Renewable Biogas generated by the customer on-site or Directed Biogas generated at a distant location and transported via the existing common carrier gas pipeline networks.  

Our global SureSource product line is uniformly based on the same Carbonate Fuel Cell technology, and offers the following advantages:  

 

Sustainable: Our solutions produce electricity electrochemically − without combustion – which enables siting of the power plants in dense, urban areas with clean air permitting regulations and represents an important public health benefit. Fuel cells also reduce carbon emissions compared to less efficient combustion-based power generation.

 

 

Flexible: Our solutions can operate on natural gas, on-site Renewable Biogas, Directed Biogas, flare gas and propane to offer CHP and are scalable to add power incrementally as demand grows. The unique chemistry of our Carbonate Fuel Cells allows them to directly use low Btu on-site Biogas with no reduction in output or efficiency compared to operation on natural gas.  We have developed proprietary Biogas cleanup and contaminant monitoring equipment which, combined with the inherent suitability of the Carbonate Fuel Cell chemistry, gives us an advantage in on-site Biogas applications.  Our SureSource 1500 and SureSource 3000 power plants are the only fuel cell systems certified to CARB emissions standards under the Distributed Generation Certification Program for operation with on-site Biogas. In addition, we have demonstrated operation of our Carbonate Fuel Cell technology with other fuel sources including coal syngas and propane.

 

Reliable: Our solutions improve power reliability and energy security by lessening reliance on the transmission and distribution infrastructure of the electric grid. Unlike solar and wind power, fuel cells are able to operate continuously regardless of weather, time of day, or geographic location.

 

Standardized: Our solutions use a standard cell design globally, enabling supply chain volume-based cost reduction, optimal resource utilization and long-life product enhancements.

 

Attractive Thermal Attributes: In addition to electricity, our standard fuel cell configuration produces high quality thermal energy (approximately 700° F), suitable for heating facilities or water, or steam for industrial processes or for absorption cooling.  When configured for CHP, our system efficiencies can potentially reach up to 90%, depending on the application.  When configured for Distributed Hydrogen our plants produce hydrogen in addition to power, with an effective efficiency (counting the fuel that would have been used to produce hydrogen conventionally) of up to 80% before considering waste heat utilization, which can raise the total efficiency even higher.

 

Use of Readily Available Catalyst Material: As our fuel cells operate at approximately 1,100° F, our platform solution has a key advantage afforded high temperature fuel cells, specifically that they do not require the use of precious metal electrodes required by lower temperature fuel cells, such as proton-exchange membrane (“PEM”) fuel cells.  As a result, we are able to use less expensive and readily available industrial metals, primarily nickel and stainless steel, as catalysts for our fuel cell components.

 

Easy to Site: Our fuel cell power platforms are easily sited with a relatively small footprint given the amount of power produced. There is minimal noise produced by the mechanical balance of plant (“BOP”) and a clean emissions profile, making our fuel cell power platforms ideally suited for urban locations and in building suburban applications at or near the point of energy consumption.

 

Scalable: Our solutions are scalable, providing a cost-effective solution to adding power incrementally as demand grows, such as multi-megawatt fuel cell parks supporting the electric grid and large scale commercial and industrial operations.

How Our Patented Fuel Cell Works

 

Fuel cells cleanly and efficiently convert chemical energy from hydrogen-rich fuels into electrical power and high-quality heat via an electrochemical process.

 

The process is highly efficient and emits water rather than pollutants as there is no burning of fuel.

15

 


 

 

Similar to a battery, a fuel cell is comprised of many individual cells that are grouped together to form a fuel cell stack, but, unlike a battery, a fuel cell will continue producing power from hydrogen or hydrocarbon fuels as long as fuel and oxidant are continuously supplied to it.

 

When a hydrogen-rich fuel such as clean natural gas or Renewable Biogas enters the fuel cell stack, it reacts chemically to produce hydrogen and electrochemically with oxygen to produce electric power, heat and water.

 

FuelCell Energy’s SureSource power platforms are based on Carbonate Fuel Cell technology and FuelCell Energy is advancing its Solid Oxide Fuel Cell technology closer to commercialization.

 

To produce electricity, Carbonate Fuel Cells generate hydrogen directly from a fuel source, such as natural gas or Renewable Biogas, via an internal reforming process; this approach, which is patented by FuelCell Energy, is a distinct competitive advantage of Carbonate Fuel Cells. Carbonate Fuel Cells produce power from hydrogen by reacting hydrogen in one electrode to make electrons and oxygen in another electrode to consume electrons. This electron circuit generates the power, and the circuit is completed by carbonate ions that diffuse from the oxygen electrode to the hydrogen electrode. The carbonate ions are converted to carbon dioxide and recycled back to the cathode, where they react to regenerate the carbonate ion. The cell concept is illustrated in the following figure.

 

Schematic of Carbonate Fuel Cell Chemical Reactions

Advantages of Carbonate Fuel Cells

Fuel cell technologies are generally classified according to the electrolyte used by each fuel cell type. Our SureSource technology utilizes a carbonate electrolyte. Carbonate-based fuel cells are well-suited for megawatt-class applications, offering a number of advantages over other types of fuel cells in our target markets.

These advantages include:

 

 

The ability of Carbonate Fuel Cells to generate electricity directly from readily available fuels such as natural gas or Renewable Biogas;

 

Lower raw material costs as the high temperature of the fuel cell enables the use of commodity metals rather than precious metals;

 

Scalability to leverage on-site components to reduce cost;

 

High-quality heat suitable for CHP applications; and

16

 


 

 

The ability to perform advanced applications, including Carbon Capture and hydrogen production to provide fuel for fuel cell vehicles.

SureSource Attributes, Benefits and Emissions Profile

Fuel cells are non-combustion devices that directly convert chemical energy in fuel into electricity.  Because fuel cells generate power electrochemically rather than by burning fuels, they are more efficient than combustion-based power sources (and as a result they produce less CO2 per kWh of power generated because they use less fuel), and they produce only trace levels of criteria pollutants (e.g., NOX, SOX, and Particulate Matter).  In addition to the low emissions profile, FuelCell Energy’s fuel cell platforms offer additional benefits such as ease of siting, cogeneration heat, fuel flexibility, and compact footprint.  The following table illustrates our view of some of the key attributes and benefits of our SureSource power plants:

 

 

Intermittent renewables, such as solar- and wind-based power, offer near zero emissions, but only for a small percentage of time and not reliably. To address capacity needs, solar and wind need to be backed up with conventional power generation, battery storage or, ideally, clean baseload fuel cells.

 

The high efficiency of our products results in significantly less CO2 per unit of power production compared to the average U.S. fossil fuel power plant, and carbon emissions are reduced even further when configured for CHP applications or biofuels.  When our power platforms are operating on Renewable Biogas, government agencies and regulatory bodies generally classify them as carbon neutral due to the renewable nature of the fuel source.  In addition, we have developed the Carbon Separation feature which can be added to a SureSource power plant, allowing CO2, which would otherwise be emitted to be captured and purified for on site use or sequestration.  

 

The low CO2 emissions and low criteria pollutants from SureSource power plants have a significant impact on sustainability and air quality because they avoid emissions 24 hours a day. The high capacity factor of baseload SureSource platforms maximizes the impact of their environmental benefits. While wind and solar renewable power sources may completely avoid these emissions while operating, they avoid fewer emissions than fuel cells because they operate for fewer hours per day. When wind and solar renewable power sources are not operating, higher emission resources may be required to operate, thus diluting the benefits. Additionally, all renewable power sources have life cycle emissions associated with manufacture and disposal.

 

17

 


 

The following table and figures illustrate how the high capacity factor of our SureSource solutions, combined with their low emissions, result in more avoided emissions on an annual basis than wind and solar per MW of installed capacity. Avoided emissions are calculated based on how much lower in emissions each source is relative to the grid, and the percentage of time the source operates.

 

 

Sources for the above tables and figures include:

 

1.

Grid emissions rates for NOX and CO2 are from EPA eGrid 2018, US Average non-baseload rates.

 

2.

Grid particulate emissions rate is from EPA eGrid PM 2.5 US average for 2018.

 

3.

Solar and Wind capacity factors are average of range from Lazard LCOE Analysis version 13, November 2019.

 

4.

Utility scale avoided emissions assumes 5% transmission and distribution losses.

 

5.

SureSource estimates are based on Company specifications and estimates.

We are also actively developing other technologies, which are discussed below in the “Advanced Technologies Programs” section.  

 

Advanced Technologies Programs

Our Advanced Technologies programs, including our Carbon Separation, Carbon Capture, Solid Oxide Fuel Cells, and Solid Oxide Electrolysis Cells for hydrogen production and energy storage represent future market, product and revenue opportunities for the Company beyond our current product line. We undertake both privately funded and publicly funded research and development to develop these opportunities, reduce costs, and expand our technology portfolio. One of our Advanced Technologies programs, Distributed Hydrogen, is transitioning from being categorized as Advanced Technologies to being categorized as a commercial product as we execute our first commercial project with Toyota at the Port of Long Beach, California, which will produce hydrogen for the fueling of passenger vehicles and heavy duty trucks while providing power to Toyota’s facilities and the local grid.

18

 


 

Our multi-featured power plant platforms can be configured to provide a number of value streams, including clean electricity, high quality usable heat, water and hydrogen suitable for vehicle fueling, industrial purposes or power generation, and to concentrate and separate CO2 from coal, biomass and natural gas fired power plants and industrial applications.  

Our Advanced Technologies programs are currently focused on commercializing solutions within four strategic areas:

 

1)

Distributed Hydrogen production;

 

2)

Solid Oxide Fuel Cell for stationary power generation, Solid Oxide Electrolysis Cell for electrolysis and long duration energy storage, and Reversible Solid Oxide Fuel Cell for the ability to switch between SOFC and SOEC;

 

3)

Carbon Capture for emissions reduction in traditional fossil fuel fired generation and industrial applications combined with power generation; and

 

4)

Carbon Separation for emissions reduction from our fuel cell platforms by extracting and purifying CO2 for sequestration or local use.

Distributed Hydrogen Production - On-site or distributed hydrogen generation, produced cleanly, represents an attractive and expansive market.  Our high temperature fuel cells generate electricity directly from a fuel by reforming the fuel inside the fuel cell to supply hydrogen for the electrical generation process.  We have developed a process by which gas separation technology can be added to our core fuel cell to capture hydrogen that is not used by the electrical generation process, and we refer to this configuration as SureSource HydrogenTM.

The SureSource Hydrogen product has the potential to be a compelling solution for industrial users of hydrogen and in transportation fueling applications. The 2.3 MW SureSource Hydrogen plant is expected to have a hydrogen output of approximately 1,200 kg per day, in addition to the electricity, thermal energy and water generated by the fuel cell. Hydrogen is typically made from natural gas in large central steam methane reforming (“SMR”) plants. The conventional SMR reforming process involves burning fossil fuel to produce steam and to heat a fuel/steam mixture to a high temperature, which is then passed over a catalyst that converts the methane/water mixture to carbon dioxide and hydrogen.  The need to burn fossil fuel to provide thermal energy for the SMR process produces additional carbon dioxide and criteria pollutant emissions, and SMRs are significant water consumers.  A similar, but environmentally sustainable, process happens in SureSource internal reforming: methane (from natural gas or Biogas) reacts with water to produce hydrogen, but, in the internal reforming process, the water and the heat are byproducts of the fuel cell reaction.  There is no need to burn fuel to supply heat, and there is no need to supply water. In fact, a SureSource Hydrogen plant is designed to be a net water producer, not a water consumer.  When operated on Biogas, SureSource Hydrogen systems produce renewable hydrogen, also known as Green Hydrogen, but, even when fueled with natural gas, they produce hydrogen with a lower carbon and criteria pollutant impact than conventional SMR because of the use of internal heat instead of burning fuel. Adding Carbon Separation or Carbon Capture to the SureSource Hydrogen platform when fueled with natural gas will deliver Blue Hydrogen (i.e., hydrogen produced with Carbon Capture). The following figure illustrates the concept of the SureSource Hydrogen platform and identifies typical applications for Distributed Hydrogen.

19

 


 

Trigeneration Distributed Hydrogen Platform

SOFC/SOEC/RSOFC and Hydrogen Based Long Duration Energy Storage – We are developing a solution for long duration energy storage using our proprietary solid oxide technology.  Our solid oxide stacks are designed to be capable of alternating between electrolysis and power generation mode.  Instead of producing power from fuel and air, a Solid Oxide Fuel Cell stack in electrolysis mode splits water into hydrogen and oxygen using supplied electricity.  A storage system based on SOFC/SOEC/RSOFC technology will start with stored water, which will be converted to hydrogen during charging by electrolysis in the solid oxide stacks.  The hydrogen will be stored as compressed gas in cylinders, pipelines, or underground, creating the ability to produce a virtually limitless supply.  When discharge power is needed, the stored hydrogen will be sent back to the solid oxide stacks, which react it with air to produce power and to regenerate the water, which will be stored for the next cycle.

The key aspect of this approach is that the reactant (water) is inexpensive and plentiful, consisting of an initial charge of water that will be regenerated with each discharge cycle.  Except for a small amount of makeup water, the system will operate in closed loop mode without continuous water consumption during electrolysis.  Long duration storage can be achieved by adding water and hydrogen storage capacity, without the need to add excessive amounts of conventional battery reactants (e.g. Lithium, Cobalt, etc.), which have supply constraints for broad adoption and which present disposal challenges.  Long duration energy storage is expected to be required at large scale during time periods ranging from hourly to seasonal in order to manage the forecasted high penetration of intermittent renewable resources globally, and this water/hydrogen based approach of our SOFC/SOEC/RSOFC technology has the potential to be a key enabler of long duration storage.

SOFC power platform design and manufacturing will be complementary to our carbonate-based megawatt-scale platforms and will afford us the opportunity to leverage our field operating history, our existing expertise in power platform design, fuel processing and high volume manufacturing capabilities, and our existing installation and service infrastructure.  Additionally, the primary market for storage applications is electric utilities, which is a market in which we are already active.  

The following figure shows the basic reactions of a solid oxide cell in fuel cell power generation mode.  Hydrogen is reacted with oxygen ions at the anode electrodes to produce water and electrons, which flow to the cathode to produce the electrical circuit.  The cathode reaction consumes the electrons and oxygen (from air) and produces oxygen ions which migrate to the anode to complete the circuit.

20

 


 

Schematic of Solid Oxide Fuel Cell Reactions

We perform SOFC/SOEC/RSOFC research and development at our Danbury, Connecticut headquarters, as well as at our dedicated SOFC/SOEC/RSOFC facility in Calgary, Alberta, Canada.  We are working under a variety of awards from the DOE for development and commercialization of both SOFC and SOEC.  Our solid oxide development activities are focused on three applications: power generation from hydrogen or other fuels (SOFC), electrolysis-hydrogen production (SOEC), and Hydrogen Based Long Duration Energy Storage (which is a combination of the first two).  During fiscal year 2019, we conducted our first prototype field test of a 250kW natural gas fueled SOFC power plant at the Clearway Energy Center in downtown Pittsburgh, Pennsylvania.  We are currently operating an advanced electrolysis system in our Danbury, Connecticut headquarters, and during fiscal year 2020, we were awarded funding from the DOE to convert the electrolysis system to a reversible storage facility after the electrolysis testing is complete in late 2021.

FuelCell Energy Hydrogen Technologies – Our Distributed Hydrogen Trigeneration platform produces clean power, heat, and hydrogen from natural gas or Biogas near the point of use without water consumption.  We are building the first full scale commercial system for Toyota at the Port of Long Beach for onsite vehicle fueling. Our Solid Oxide Electrolysis technology is expected to produce hydrogen from water and power with high electrical efficiency and have the ability to increase efficiency further by using waste heat. We are currently commissioning a sub scale demonstration of this technology in our Danbury test facility and have been awarded a project to provide a packaged 150 kg/day system for demonstration at Idaho National Laboratory. We have also been developing a hybrid reforming/electrolysis technology which uses Carbonate Fuel Cell stacks in electrolysis mode, combined with in-stack reforming of natural gas or Biogas to produce hydrogen while extracting CO2 from the hydrogen stream. This technology, called Reformer / Electrolysis / Purification, or REP, is particularly amenable to Blue Hydrogen production.  This portfolio of technologies addresses a broad range of applications with the ability to maximize value depending on factors such as fuel availability and cost, power cost, and water consumption concerns.  In addition to these approaches to hydrogen production, our Solid Oxide Fuel Cell platform is capable of power generation with pure hydrogen fuel, and our Carbonate Fuel Cell platforms are capable of operation with a blend of hydrogen and natural gas or Biogas.

Carbon Capture – Power generation and industrial applications are the source of two-thirds of the world’s carbon emissions. Coal and natural gas are abundant, low-cost resources that are widely used to generate electricity in developed and developing countries, but burning these fuels, as well as burning biomass, results in the emission of criteria pollutants and CO2. Cost effective and efficient Carbon Capture from power generation and industrial applications globally represents a large market because it could enable clean use of all available fuels. The SureSource CaptureTM system is being designed to separate and concentrate CO2 from the flue gases of natural gas,

21

 


 

biomass or coal-fired power plants or industrial facilities as a side reaction that extracts and purifies the CO2 in the flue gas during the power generation process and destroys approximately 70% of NOx emissions during the power generation process.

The production of additional power during the Carbon Capture process, as opposed to consuming power, differentiates the SureSource Capture system from other forms of Carbon Capture. This could make the SureSource Capture system more cost effective than other systems which are being considered for Carbon Capture. SureSource Capture systems can be implemented in increments, managing capital outlay to match decarbonization objectives and regulatory requirements.  Since our solution generates a return on capital resulting from the fuel cell's production of electricity rather than an increase in operating expense required by other Carbon Capture technologies, it can extend the life of existing power plants and be economically applied to industrial thermal systems. We have a joint development agreement with EMRE, which was effective as of October 31, 2019, to develop and commercialize this application of our core technology. See additional discussion concerning our relationship with EMRE under the section below entitled “License Agreements and Royalty Income; Relationship with POSCO Energy”. During fiscal year 2020, we completed a Carbon Capture project study with Drax Power Station, the largest single-site renewable power generator in the United Kingdom.

We believe there are significant market opportunities for Distributed Hydrogen production, Carbon Capture, Solid Oxide Fuel Cell solutions and energy storage that represent potential future revenue opportunities for the Company. The projects described above allow us to leverage third-party resources and funding to accelerate the commercialization and realize the market potential of each of these solutions and virtually eliminate the need to rely on and use limited supply minerals.

 

Carbon Separation – In addition to the ability to capture carbon dioxide from an external source, our platforms have the ability to extract and purify carbon dioxide produced by the fuel cell power generation process. Because the fuel is not pre-mixed with air, the depleted fuel gas leaving the fuel electrode chambers contains the carbon dioxide reaction product before it is diluted with large amounts of air. Our Carbon Separation technology allows carbon dioxide to be easily extracted from this stream and purified to the appropriate level for utilization or sequestration, significantly reducing the carbon footprint of the generated power. This requires a simple modification to the fuel cell module which can be provided with new systems and retrofitted for existing systems.

One attractive application for this technology is the on-site production of carbon dioxide for use in beverage and food production, in addition to industrial uses. A 1.8 MW SureSource system can produce 20 tons high purity carbon dioxide per day, and the power and carbon dioxide production levels can be optimized (e.g., to produce more power and less carbon dioxide) depending on the needs of the application. The system can also provide more than 2 million Btu/hour of useful thermal energy, offsetting fuel consumption in on-site boilers (if not eliminating the need for on-site boilers) and further avoiding carbon dioxide emissions. Additional beverage, food, and/or industrial carbon can be produced by capturing the carbon emissions from on-site boilers through the carbon concentration and capture capabilities of our platform, reducing the carbon footprint of onsite boilers even further.

The ability to provide clean power, heat, and useable carbon dioxide is a unique feature profile that we believe is only available with our SureSource platform.  Our systems are modular and scalable, so they can be deployed in a wide variety of applications where on-site carbon dioxide is consumed as a product solution, or carbon dioxide is delivered to multiple nearby consumers. Distributed power and heat generation combined with carbon dioxide production, which has the potential to drive significant reductions in carbon emissions, is a compelling product offering built on our current Carbonate Fuel Cell platform. An illustration of the Carbon Separation application is shown in the following figure, which also shows potential applications for locally produced carbon dioxide.

22

 


 

SureSource Platform with Carbon Separation

We believe there are significant market opportunities for Distributed Hydrogen production, Solid Oxide Fuel Cell solutions and energy storage, Carbon Capture and Carbon Separation. With Distributed Generation and Carbon Separation available now, and Carbon Capture and Solid Oxide Fuel Cell solutions in advanced stages of development, these platforms represent potential future revenue opportunities for the Company.

We have historically worked on technology development with various U.S. government departments and agencies, including the DOE, the Department of Defense (“DOD”), the Environmental Protection Agency (“EPA”), the Defense Advanced Research Projects Agency (“DARPA”), the Office of Naval Research (“ONR”), and the National Aeronautics and Space Administration (“NASA”). Government funding, principally from the DOE, provided 9%, 6% and 8% of our revenue for the fiscal years ended October 31, 2020, 2019, and 2018, respectively. Beyond the DOE programs, the Company intends to prudently invest capital to accelerate SOFC/SOEC/RSOFC commercialization.  

 

Markets

Vertical Markets

Access to clean, affordable and reliable power has transformed how most of the world lives today. The ability to provide power cleanly and efficiently is taking on greater importance and urgency in many regions of the world. FuelCell Energy’s products and services are specifically designed to deliver such clean, efficient power globally.  

Central generation and its associated transmission requirements and distribution grid are difficult to site, costly, prone to interruption and generally take many years to permit and build.  Some types of power generation that were widely adopted in the past, such as nuclear and coal power, are no longer welcome in certain regions of the world.  The cost and impact to public health and the environment of pollutants and greenhouse gas emissions impact the siting of new power generation.  The attributes of our SureSource power platforms address these challenges by providing virtually Particulate Matter-free baseload power and, where desired, thermal energy at the point of use in a highly efficient process that is affordable to consumers.

23

 


 

We target distinct markets, including:

 

Utilities and independent power producers;

 

Industrial and process applications;

 

Education and health care;

 

Data centers and communication;

 

Wastewater treatment;

 

Government;

 

Commercial and hospitality; and

 

Microgrids.

The utilities and independent power producers market is our largest vertical market with customers that include utilities on the East and West coasts of the United States, such as UIL Holdings Corporation, Inc. (owned by Avangrid, Inc.), the Long Island Power Authority (“LIPA”), Southern California Edison and Pacific Gas & Electric. In Europe, utility customers include E.ON Connecting Energies, one of the largest utilities in the world.  In South Korea, we are contracted to operate and maintain a 20 MW power plant project (comprised of five SureSource 3000 plants) for Korea Southern Power Company (“KOSPO”).

Our SureSource power platforms are producing power for a variety of industrial, commercial, municipal and government customers, including manufacturing facilities, pharmaceutical processing facilities, universities, healthcare facilities and wastewater treatment facilities. These institutions desire efficient, clean and continuous power to reduce operating expenses, reduce greenhouse gas emissions and avoid pollutant emissions to meet their sustainability goals, while boosting resiliency and limiting dependence on the distribution grid.  CHP applications further support economic and sustainability initiatives by minimizing or avoiding the use of combustion-based boilers for heat. Our SureSource power platforms are unique in their ability to run on Biogas.

With the growing market for anaerobic digestion (the production of Biogas from the breakdown of biodegradable materials in the absence of oxygen) and increasingly stringent regulations regarding air quality, we see a growing market opportunity that is perfectly suited for our fuel cell design. SureSource power platforms operating on Renewable Biogas are an especially compelling value proposition as they convert a waste product into clean electricity and heat, while reducing or eliminating flaring, which addresses certain economic, environmental justice, and sustainability challenges faced by our customers and the communities in which they operate. Biogas is generated by the decay of organic material (i.e., biomass). This decaying organic material releases methane, or Biogas. As a harmful greenhouse gas, Biogas cannot be released directly into the atmosphere. Flaring creates pollutants and wastes this potential fuel source. Capturing and using Biogas as a fuel addresses these challenges and provides a carbon-neutral renewable fuel source. Our patented, proprietary clean-up skid, SureSource TreatmentTM, provides an economical and reliable system for treating Biogas for use on-site at the Biogas production facility.

Wastewater treatment facilities, food and beverage processors and agricultural operations produce Biogas as a byproduct of their operations. Disposing of this greenhouse gas can be harmful to the environment if released into the atmosphere or flared. Our SureSource power platforms convert this Biogas into electricity and heat efficiently and economically. Wastewater facilities with anaerobic digesters are an attractive market for our SureSource solution including the power platform as well as treatment of the Biogas. Many wastewater treatment plants currently flare Biogas produced in the anaerobic digestion process, emitting NOx, SOx and Particulate Matter into the atmosphere, which does not meet many air quality regulations. Since our fuel cells operate on the Renewable Biogas produced by the wastewater treatment process and the heat is used to support daily operations at the wastewater treatment facility, the overall thermal efficiency of these installations is high, supporting economics and sustainability. In addition, the fuel cell does not emit the harmful NOx, SOx and Particulate Matter that come out of a flare or that would result from the use of traditional combustion-based power generation. On-site Biogas projects are more efficient and more economical than Directed Biogas projects because less gas processing is required compared to the processing needed to get the on-site Biogas to pipeline quality. Also, on-site Biogas projects avoid the potential cost of constructing pipelines if the source of the Biogas is not located near an existing natural gas pipeline.  The unique chemistry of Carbonate Fuel Cells allows them to use low Btu on-site Biogas with no reduction in output or efficiency compared

24

 


 

to operation on natural gas.  We have developed proprietary Biogas cleanup and contaminant monitoring equipment which, combined with the inherent suitability of the Carbonate Fuel Cell chemistry, gives us an advantage in on-site Biogas applications.  Our SureSource 1500 and SureSource 3000 power platforms are the only systems certified to CARB emissions standards under the Distributed Generation Certification Program for operation with on-site Biogas.

Our fuel cell solutions are also well suited for Microgrid applications, either as the sole source of power generation or integrated with other forms of power generation.  We have fuel cells operating as Microgrids at universities and municipalities, including one university Microgrid owned by Clearway Energy and a municipal-based Microgrid owned by UIL Holdings Corporation, in addition to the Microgrids at the University of California, San Diego and the Santa Rita Jail (as discussed below).  For the municipal-based system owned by UIL Holdings Corporation, under normal operation, the fuel cell supplies power to the grid.  If the grid is disrupted, the fuel cell plant will automatically disconnect from the grid and power a number of critical municipal buildings. Heat from this municipal-based fuel cell platform is used by the local high school. As mentioned below, our fuel cell based Microgrids have continued operating during Public Safety Power Shutoffs events in California.

Growth and Market Adoption Targets

We target for expansion and development vertical markets and geographic regions that:

 

Benefit from and value clean Distributed Generation;

 

 

Are located where there are high energy costs, poor grid reliability, and/or challenged transmission and distribution lines;

 

 

Have a need for Distributed Hydrogen for transportation or industry;

 

 

Can leverage the multiple value streams delivered by our SureSource platforms (electricity, hydrogen, water, and Carbon Separation); and

 

 

Are aligned with regulatory frameworks that harmonize energy, economic and environmental policies.

Our business model focuses on providing these vertical markets and geographic regions with highly efficient and affordable Distributed Generation that delivers de-centralized power in a low-carbon, virtually pollutant-free manner. Geographic markets that meet these criteria and where we are already well established include the Northeastern United States and California.  We have also installed and are operating plants in Europe and Asia, mainly South Korea, in addition to North America.

The Company has made significant progress with reducing costs and creating markets since the commercialization of our products in 2003, with more than 255 MW of our SureSource technology currently installed and operating.

We believe that we can accelerate and expand the adoption of our distributed power generation solutions through:

 

further reductions in the total cost of ownership;

 

 

continued education regarding the value that our solutions provide;

 

 

geographic and segment expansion;

 

 

growing demand for on-site generation;

 

 

Microgrid expansion; and

 

 

product expansion across biofuels, Carbon Separation and utilization, Carbon Capture and local hydrogen.  

Fuel Cell Power Plant Ownership Structures

25

 


 

Historically, in the United States, customers or developers typically purchased our fuel cell power plants outright.  As the size of our fuel cell projects has grown and the availability of project capital has improved, project structures in the U.S. have transitioned to predominantly PPAs.  

Under a PPA, the utility or end-user of the power commits to purchase power as it is produced for an extended period of time, typically 10-to-20 years.  Examples of customers that have previously entered into PPAs include universities, a pharmaceutical company, hospitals and utilities.  A primary advantage for the customer under a PPA structure is that it does not need to commit its own capital or own a power generating asset, yet it enjoys the benefits of fuel cell power generation.

The project may be sold to a project investor or retained by the Company.  If the project is sold, revenue from the product sale is recognized, and the Company recognizes revenue separately for the long-term maintenance and service agreement over the term of that agreement.  If the project is retained, electricity, capacity and/or renewable energy credits are recognized monthly over the term of the PPA. We report the financial performance of retained projects as generation revenue and cost of generation revenues.

Our decision to retain certain projects is based in part on the recurring, predictable cash flows these projects can offer us, the proliferation of PPAs in the industry and the potential access to capital.  Retaining PPAs affords the Company the full benefit of future cash flows under the PPAs, which are higher than if we sell the projects, although it requires more upfront capital investment and financing.  As of October 31, 2020, our operating portfolio of retained projects totaled 32.6 MW with an additional 40.7 MW under development or construction.  

The Company plans to continue to grow this portfolio prudently and in a balanced manner, while also selling projects to investors when selling presents the best value and opportunity for the Company’s capital or meets the customer’s desired ownership structure.

 

Levelized Cost of Energy

Our fuel cell projects deliver power at a rate comparable to pricing from the grid in our targeted markets.  Policy programs that help to support adoption of clean distributed power generation often lead to below-grid pricing.  We measure power costs by calculating the Levelized Cost of Energy (“LCOE”) over the life of the project.  

There are several primary elements to LCOE for our fuel cell projects, including:

 

Capital cost;

 

 

Operations and maintenance cost; and

 

 

Fuel expense.

Given the level of integration in our business model of manufacturing, installing and operating fuel cell power plants, there are multiple areas and opportunities for cost reductions. We are actively managing and reducing costs in all three LCOE areas as follows:

 

Capital Cost - Capital costs of our projects include costs to source material, manufacture, install, interconnect, finance and complete any on-site application requirements, such as configuring for a Microgrid and/or heating and cooling applications. We have reduced the product cost of our megawatt-class power platforms by more than 60% from the first commercial installation in 2003. We expect to achieve further cost reductions, primarily through higher production volumes and engineering efficiencies, which may be achieved through the application of lean manufacturing techniques and supply chain initiatives.

 

Operations and Maintenance Cost – Through secure connections, we remotely monitor, operate, and maintain our fuel cell power platforms to optimize performance and meet or exceed expected operating parameters throughout the operational lives of the plants. Operations and maintenance (“O&M”) is a key driver for power plants to deliver on projected electrical output and revenue.  

Each model of our SureSource power platforms has a design life of 25 to 30 years. There are two major components of our platforms:

26

 


 

 

1.

Our fuel cell modules are currently manufactured with a 7-year cell design life, up from the 5-year design last manufactured in 2018. Thus, for a standard 20-year PPA project, our fuel cell modules are expected to require two replacements, compared to three replacements with the 5-year modules, significantly reducing the O&M and increasing up-time operation.

 

2.

The BOP systems, which consist of conventional mechanical and electrical equipment, with a design life of 25 to 30 years, are maintained over the project life.

The price for planned periodic fuel cell stack replacements is included in our long-term service agreements or in the per kWh price of the PPA.

We expect to continually drive down the cost of O&M with an expanding fleet, which will leverage our investments in this area.  Additionally, we are continuing to develop fuel cells that have longer useful lives, which is intended to reduce O&M costs by increasing our scheduled module replacement period to greater than seven years.

 

Fuel Expense - Our fuel cells directly convert chemical energy (fuel) into electricity, heat, water, and, in certain configurations, other value streams such as high purity hydrogen.  Our power plants can operate on a variety of existing and readily available fuels, including pipeline natural gas, delivered liquid natural gas or compressed natural gas, Renewable Biogas, Directed Biogas, propane, and other hydrocarbons such as syngas or blends with hydrogen.  Our SureSource power plants deliver electrical efficiencies of 47% for systems targeting CHP applications and 60% for systems targeting electric-only applications, such as grid support and data centers.  In a CHP configuration, our plants can deliver even higher system efficiency, depending on the application.  Considering utilized waste heat in CHP applications, total efficiency of systems using our power plants is typically 60% to 80% and can be as high as 90%.  These efficiencies compare to average U.S. fossil fuel plant generation efficiency of about 40% with grid line losses.  Increasing electrical efficiency and reducing fuel costs is a key element of our operating cost reduction efforts and a competitive advantage against traditional combustion-based technologies.

An important and differentiating factor that benefits fuel cells when comparing LCOE to other forms of power generation is that our solutions provide delivered electricity that minimizes or even avoids the costs of high voltage and distributed transmission.

Energy can be produced right at the point of use.

When comparing LCOE across different forms of power generation, transmission should be considered.  Power generation far from where the power is used requires transmission, which is a cost to ratepayers, creates risk of system outages, increases cybersecurity attack risk, and is inefficient due to line losses of power in the transmission process. Events, including hurricanes along the Gulf Coast and Puerto Rico, wildfires in California, and significant snow and ice storms in the Northeastern U.S., prove that transmission systems are more vulnerable to storm-related and other interruptions than locally generated energy.  

California has been affected by Public Safety Power Shutoffs (“PSPS”), a preemptive effort by utility companies in the state to prevent wildfires from being started by electrical equipment during strong and dry wind conditions by shutting off the power to targeted neighborhoods and substations. Two FuelCell Energy platforms, installed in Microgrids and operated by FuelCell Energy, remained operational as part of their respective Microgrids in areas impacted by PSPS. These platforms provided steady, reliable power to the University of California, San Diego and the Santa Rita Jail during a time when over 3 million people were generally without power due to PSPS, demonstrating the value of FuelCell Energy’s Distributed Generation platforms.

Producing power near the point of use also facilitates the development of CHP applications, since it is easier to find a user for fuel cell waste heat in distributed applications.  Using waste heat to avoid burning fuel for thermal applications reduces LCOE (by avoiding fuel cost) and avoids additional carbon emissions and criteria pollutants.

 

Manufacturing and Service Facilities

We operate a 167,000 square-foot manufacturing facility in Torrington, Connecticut where we produce the individual cell packages and assemble the fuel cell modules. This facility also houses our global service center. Our completed modules are conditioned in Torrington and shipped directly to customer sites.  Annual capacity (module

27

 


 

manufacturing, final assembly, testing and conditioning) is 100 MW per year under the Torrington facility’s current configuration when being fully utilized.  The Torrington facility is sized to accommodate eventual annual production capacity of 200 MW per year.

We design and manufacture the core SureSource fuel cell components that are stacked on top of each other to build a fuel cell stack.  For megawatt-scale power plants, four fuel cell stacks are combined to build a fuel cell module.  To complete the power platform, the fuel cell module or modules are combined with the BOP.  The mechanical BOP processes the incoming fuel such as natural gas or Renewable Biogas and includes various fuel handling and processing equipment such as pipes and blowers. The electrical BOP processes the power generated for use by the customer and includes electrical interface equipment such as an inverter.  The BOP components are either purchased directly from suppliers or the manufacturing is outsourced based on our designs and specifications.  This strategy allows us to leverage our manufacturing capacity, focusing on the critical aspects of the power plant where we have specialized knowledge and expertise and possess extensive intellectual property.  BOP components are shipped directly to a project site and are then assembled with the fuel cell module into a complete power plant.

The Torrington production and service facility and the Danbury corporate headquarters and research and development facility are ISO 9001:2015 and ISO 14001:2015 certified and our Field Service operation (which maintains the installed fleet of our platforms) is ISO 9001:2015 certified, reinforcing the tenets of FuelCell Energy’s quality management system and our core values of continual improvement and commitment to quality, environmental stewardship, and customer satisfaction. Sustainability is promoted throughout our organization. We manufacture SureSource products and manage them through end-of-life using environmentally friendly business processes and practices, certified to ISO 14001:2015. We continually strive to improve how we plan and execute across the entire product life cycle. We strive for “cradle-to-cradle” sustainable business practices, incorporating sustainability in our corporate culture. We utilize “Design for Environment” principles in the design, manufacture, installation and servicing of our power platforms. “Design for Environment” principles aim to reduce the overall human health and environmental impact of a product, process or service, when such impacts are considered across the product’s lifecycle. We maintain a chain of custody and responsibility of our SureSource products throughout the product life cycle. When our platforms reach the end of their useful lives, we can refurbish and re-use certain parts and then recycle most of what we cannot re-use. By weight, approximately 93% of the entire power plant can be re-used or recycled at the end of its useful life.

We have a manufacturing and service facility in Taufkirchen, Germany that has the capability to perform final module assembly for up to 20 MW per year of sub-megawatt fuel cell power platforms to service the fuel cell demand in the European market. Our European service activities are also operated out of this location. Our operations in Europe are certified under both ISO 9001:2015 and ISO 14001:2015.

We have a research and development facility in Calgary, Alberta, Canada that is focused on the engineering and development of the Company’s SOFC and SOEC technology. This facility includes equipment for the manufacturing of solid oxide cells and stacks, including advanced automated stack manufacturing processes which have been developed to ensure that the low material cost of the stack is matched with low labor and overhead cost.  The images below show our automated printing line used for solid oxide cells and our robotic cell-stack assembly facility.  The automated system performs the stack build at ~12 seconds per repeat layer, including optical part inspection, cell leak test and thickness measurement, interconnect spot weld and leak test, and part-marking for stack quality assurance.

 

28

 


 

Automated Screen Printing and Stack Assembly Facilities

Part inspection, leak test, thickness measurements, and stacking are done in this robot-based system

Raw Materials and Supplier Relationships

We use various commercially available raw materials and components to construct a fuel cell module, including nickel and stainless steel, which are key inputs in our manufacturing process. Our fuel cell stack raw materials are sourced from multiple vendors and are not considered precious metals. We have a global integrated supply chain with qualified sources of supply, many of which are located locally in the regions in which we have established manufacturing and service operations including Europe and Asia. While we manufacture the fuel cells in our Torrington facility, the electrical and mechanical BOPs are assembled by and procured from several suppliers. All of our suppliers must undergo a stringent and rigorous qualification process. We continually evaluate and qualify new suppliers as we diversify our supplier base in our pursuit of lower costs and consistent quality. We purchase mechanical and electrical BOP components from third party vendors, based on our own proprietary designs.

Engineering, Procurement and Construction (“EPC”)

We provide customers with complete turn-key solutions, including development, engineering, procurement, construction, interconnection and operations for our fuel cell projects.  From an EPC standpoint, we have an extensive history of safe and timely delivery of turn-key projects.  We have developed relationships with many design firms and licensed general contractors and have a repeatable, safe, and efficient execution philosophy that has been successfully demonstrated in numerous jurisdictions, both domestically and abroad, all with an exemplary safety record.  The ability to rapidly and safely execute installations minimizes high-cost construction period financing and can assist customers in certain situations when the Commercial Operations Date is time sensitive.

 

Services and Warranty Agreements

We offer a comprehensive portfolio of services, including engineering, project management and installation, and long-term operating and maintenance programs, including trained technicians that remotely monitor and operate our platforms around the world, 24 hours a day and 365 days a year.  We directly employ field technicians to service the power platforms and maintain service centers near our customers to support the high Availability of our platforms.  

For all operating fuel cell platforms not under a PPA, customers purchase long-term service agreements, some of which have terms of up to 20 years. Pricing for service contracts is based upon the value of service assurance and the markets in which we compete and includes all future maintenance and fuel cell module exchanges.  Each model of our SureSource power platform has a design life of 25-to-30 years. The fuel cell modules, with legacy modules having a 5-year cell design life and current production modules having a 7-year cell design life, go through periodic replacement, while the BOP systems, which consist of conventional mechanical and electrical equipment, are maintained over the life of the project.

Under the typical provisions of both our service agreements and PPAs, we provide services to monitor, operate and maintain power platforms to meet specified performance levels. Operations and maintenance is a key driver for power platforms to deliver their projected revenue and cash flows.  The service aspects of our business model provide a recurring and predictable revenue stream for the Company.  We have committed future production for scheduled fuel cell module exchanges under service agreements and PPAs through the year 2038.  The pricing structure of the service agreements incorporates these scheduled fuel cell module exchanges and the committed nature of this production facilitates our production planning. Many of our PPAs and service agreements include guarantees for system performance, including electrical output and heat rate. Should the power platform not meet the minimum performance levels, we may be required to replace the fuel cell module with a new or used replacement module and/or pay performance penalties.  Our goal is to optimize the power platforms to meet expected operating parameters throughout their contracted service term.

In addition to our service agreements, we provide a warranty for our products against manufacturing or performance defects for a specific period of time. The warranty term in the U.S. is typically 15 months after shipment or 12 months after acceptance of our products.  We accrue for estimated future warranty costs based on historical experience.

29

 


 

License Agreements and Royalty Income; Relationship with POSCO Energy

License Agreement with ExxonMobil Research and Engineering Company

EMRE and FuelCell Energy began working together in 2016 under an initial joint development agreement with a focus on better understanding the fundamental science behind Carbonate Fuel Cells for use in advanced applications and specifically how to increase efficiency in separating and concentrating carbon dioxide from the exhaust of natural gas-fueled power generation.

In June 2019, we entered into a license agreement with EMRE, a wholly-owned subsidiary of ExxonMobil Corporation, to facilitate the further development of our SureSource CaptureTM product (the “EMRE License Agreement”). Pursuant to the EMRE License Agreement, the Company granted EMRE and its affiliates a non-exclusive, worldwide, fully-paid, perpetual, irrevocable, non-transferable license and right to use our patents, data, know-how, improvements, equipment designs, methods, processes and the like to the extent it is useful to research, develop and commercially exploit Carbonate Fuel Cells in applications in which the fuel cells concentrate carbon dioxide from industrial and power sources and for any other purpose attendant thereto or associated therewith, in exchange for a $10 million payment. Such right and license is sublicenseable to third parties performing work for or with EMRE or its affiliates, but shall not otherwise be sublicenseable.

The EMRE License Agreement facilitated the execution of a new Joint Development Agreement with EMRE, effective October 31, 2019 and executed in fiscal year 2020 (the “EMRE Joint Development Agreement”), pursuant to which we are continuing exclusive research and development efforts with EMRE to evaluate and develop new and/or improved Carbonate Fuel Cells to reduce carbon dioxide emissions from industrial and power sources, in exchange for (a) payment of (i) an exclusivity and technology access fee of $5.0 million, (ii) up to $45.0 million for research and development efforts, and (iii) milestone-based payments of up to $10.0 million after certain technological milestones are met, and (b) certain licenses.  As a result of the execution of the EMRE Joint Development Agreement in fiscal year 2020, the associated backlog was recorded in fiscal year 2020 and the related revenue is expected to be recognized through fiscal year 2021.

License Agreements with POSCO Energy

From approximately 2007 through 2015, we relied on POSCO Energy to develop and grow the South Korean and Asian markets for our products and services.  

Through June of 2020, we recorded license fees and were entitled to receive royalty income from POSCO Energy pursuant to manufacturing and technology transfer agreements entered into with POSCO Energy, including the Alliance Agreement dated February 7, 2007 (and amendments thereto), the Technology Transfer, License and Distribution Agreement dated February 7, 2007 (and amendments thereto), the Stack Technology Transfer and License Agreement dated October 27, 2009 (and amendments thereto), and the Cell Technology Transfer and License Agreement dated October 31, 2012 (and amendments thereto) (collectively, the “License Agreements”). The Cell Technology Transfer and License Agreement (“CTTA”) provided POSCO Energy with the exclusive technology rights to manufacture, sell, distribute and service our SureSource 300, SureSource 1500 and SureSource 3000 fuel cell technology in the South Korean and broader Asian markets. POSCO Energy built a cell manufacturing facility in Pohang, South Korea which became operational in late 2015, but is no longer operating.

In October 2016, the Company and POSCO Energy extended the terms of certain of the License Agreements to be consistent with the term of the CTTA, which was to expire on October 31, 2027. The CTTA required POSCO Energy to pay us a 3.0% royalty on POSCO Energy net product sales, as well as a royalty on scheduled fuel cell module replacements under service agreements for modules that were built by POSCO Energy and installed at plants in Asia under the terms of long-term service agreements between POSCO Energy and its customers. Due to certain actions and inactions of POSCO Energy, the Company has not realized any new material revenues, royalties or new projects developed by POSCO Energy since late 2015.

In March 2017, we entered into a memorandum of understanding (“MOU”) with POSCO Energy to permit us to directly develop the Asian fuel cell business, including the right for us to sell SureSource solutions in South Korea and the broader Asian market. In June 2018, POSCO Energy advised us in writing that it was terminating the MOU effective July 15, 2018.  Pursuant to the terms of the MOU, notwithstanding its termination, we continued to execute on sales commitments in Asia secured in writing prior to July 15, 2018, including the 20 MW power plant installed for KOSPO.

30

 


 

In November 2019, POSCO Energy spun-off its fuel cell business into a new entity, Korea Fuel Cell Co., Ltd. (“KFC”), without our consent. As part of the spin-off, POSCO Energy transferred manufacturing and service rights under the License Agreements to KFC, but retained distribution rights and severed its own liability under the License Agreements. We formally objected to POSCO Energy’s spin-off, and POSCO Energy posted a bond to secure any liabilities to FuelCell Energy arising out of the spin-off. In September 2020, the Korean Electricity Regulatory Committee found that POSCO Energy’s spin-off of the fuel cell business to KFC may have been done in violation of South Korean law.

On February 19, 2020, we notified POSCO Energy in writing that it was in material breach of the License Agreements by (i) its actions in connection with the spin-off of the fuel cell business to KFC, (ii) its suspension of performance through its cessation of all sales activities since late 2015 and its abandonment of its fuel cell business in Asia, and (iii) its disclosure of material nonpublic information to third parties and its public pronouncements about the fuel cell business on television and in print media that have caused reputational damage to the fuel cell business, the Company and its products. We also notified POSCO Energy that, under the terms of the License Agreements, it had 60 days to fully cure its breaches to our satisfaction and that failure to so cure would lead to termination of the License Agreements. Further, on March 27, 2020, we notified POSCO Energy of additional instances of its material breach of the License Agreements based on POSCO Energy’s failure to pay royalties required to be paid in connection with certain module replacements.

On April 27, 2020, POSCO Energy initiated a series of three arbitration demands against us at the International Court of Arbitration of the International Chamber of Commerce seated in Singapore alleging certain warranty defects in a sub-megawatt conditioning facility at its facility in Pohang, South Korea and seeking combined damages of approximately $3.3 million. Prior to filing the arbitrations, POSCO Energy obtained provisional attachments from the Seoul Central District Court attaching certain revenues owed to us by KOSPO as part of such warranty claims, which has delayed receipt of certain payments owed to us. POSCO Energy subsequently sought additional provisional attachments on KOSPO revenues from the Seoul Central District Court based on unspecified warranty claims not yet filed in an additional amount of approximately $7 million, and additional provisional attachments on KOSPO revenues from the Seoul Central District Court based on its alleged counterclaims in the license termination arbitration described below in an additional amount of approximately $110 million. As of October 31, 2020, outstanding accounts receivable due from KOSPO were $4.8 million.

On June 28, 2020, we terminated the License Agreements with POSCO Energy and filed a demand for arbitration against POSCO Energy and KFC in the International Court of Arbitration of the International Chamber of Commerce based on POSCO Energy’s (i) failure to exercise commercially reasonable efforts to sell our technology in the South Korean and Asian markets, (ii) disclosure of our proprietary information to third parties, (iii) attack on our stock price and (iv) spin-off of POSCO Energy’s fuel cell business into KFC without our consent. We have requested that the arbitral tribunal (a) confirm through declaration that POSCO Energy’s exclusive license to market our technology and products in South Korea and Asia is null and void as a result of the breaches of the License Agreements and that we have the right to pursue direct sales in these markets, (b) order POSCO Energy and KFC to compensate us for losses and damages suffered in the amount of more than $200 million, and (c) order POSCO Energy and KFC to pay our arbitration costs, including counsel fees and expenses. We have retained outside counsel on a contingency basis to pursue our claims, and outside counsel has entered into an agreement with a litigation finance provider to fund the legal fees and expenses of the arbitration. In October 2020, POSCO Energy filed a counterclaim in the arbitration (x) seeking approximately $880 million in damages based on allegations that we misrepresented the capabilities of our fuel cell technology to induce POSCO Energy to enter into the License Agreements and failed to turn over know-how sufficient for POSCO Energy to successfully operate its business; (y) seeking a declaration that the License Agreements remain in full force and effect and requesting the arbitral tribunal enjoin us from interfering in POSCO Energy’s exclusive rights under the License Agreements and (z) seeking an order that we pay POSCO Energy’s arbitration costs, including counsel fees and expenses.

On August 28, 2020, POSCO Energy filed a complaint in the Court of Chancery of the State of Delaware (the “Court”) purportedly seeking to enforce its rights as a stockholder of the Company to inspect and make copies and extracts of certain books and records of the Company and/or the Company’s subsidiaries pursuant to Section 220 of the Delaware General Corporation Law and/or Delaware common law. POSCO Energy alleges that it is seeking to inspect these documents for a proper purpose reasonably related to its interests as a stockholder of the Company, including investigating whether the Company’s Board of Directors and its management breached their fiduciary duties of loyalty, due care, and good faith. POSCO Energy seeks an order of the Court permitting POSCO Energy to inspect and copy the demanded books and records, awarding POSCO Energy reasonable costs and expenses,

31

 


 

including reasonable attorney’s fees incurred in connection with the matter, and granting such other and further relief as the Court deems just and proper.

On September 14, 2020, POSCO Energy filed a complaint in the United States District Court for the Southern District of New York alleging that the Company delayed the removal of restrictive legends on certain share certificates held by POSCO Energy in 2018, thus precluding POSCO Energy from selling the shares and resulting in claimed losses in excess of $1,000,000.

The Company does not believe that any of the arbitrations or legal proceedings brought against the Company by POSCO Energy are for a proper purpose. Further, the Company believes that all such arbitrations and legal proceedings are in fact simply fulfillment of POSCO Energy’s prior threats to file a series of actions against the Company and are attempts to obtain leverage over the Company and, in certain proceedings, gain advantage in the pending arbitration filed by the Company against POSCO Energy. The Company will vigorously defend itself against POSCO Energy’s claims in all forums and believes it will be apparent at the conclusion of each matter that each action was filed for an improper purpose.

 

Company Funded Research and Development

In addition to research and development performed under research contracts, including as described under the heading “Advanced Technologies Programs” above, we also fund our own research and development activities to support the commercial fleet with product enhancements and improvements. During fiscal year 2018, we launched our seven-year life stacks, which extended our stack life from five years to seven years. Greater power output and improved longevity are expected to lead to improved gross margin profitability on a per-unit basis for each power plant sold and improved profitability of service contracts, which are expected to support expanding gross margins for the Company.

In addition to output and life enhancements, we designed and introduced the 3.7 MW SureSource 4000 configuration with increased electrical efficiency, and we continually invest in cost reduction and improving the performance, quality and serviceability of our plants. These efforts are intended to improve our value proposition.

Company-funded research and development is included in Research and development expenses (operating expenses) in our consolidated financial statements.  The total research and development expenditures in the consolidated statement of operations, including third party and Company-funded expenditures, are as follows:

 

 

 

Years Ended October 31,

 

(dollars in thousands)

 

2020

 

 

2019

 

 

2018

 

Cost of Advanced Technologies contract revenues

 

$

16,254

 

 

$

12,884

 

 

$

10,360

 

Research and development expenses

 

 

4,797

 

 

 

13,786

 

 

 

22,817

 

Total research and development

 

$

21,051

 

 

$

26,670

 

 

$

33,177

 

 

32

 


 

Backlog

 

Backlog represents definitive agreements executed by the Company and our customers.

 

Backlog as of October 31, 2020 and 2019 consisted of the following (in thousands):

 

 

 

2020

 

 

2019

 

Commercial:

 

 

 

 

 

 

 

 

Product

 

$

 

 

$

 

Service

 

 

146,810

 

 

 

169,371

 

Generation

 

 

1,067,228

 

 

 

1,114,366

 

License

 

 

22,182

 

 

 

22,931

 

Total Commercial

 

$

1,236,220

 

 

$

1,306,668

 

 

 

 

 

 

 

 

 

 

Advanced Technologies

 

 

 

 

 

 

 

 

Non-U.S. Government

 

 

37,652

 

 

 

389

 

U.S. Government - Funded

 

$

11,281

 

 

$

11,369

 

U.S. Government - Unfunded

 

 

220

 

 

 

220

 

Total Advanced Technologies

 

$

49,153

 

 

$

11,978

 

 

 

 

 

 

 

 

 

 

Total Backlog

 

$

1,285,373

 

 

$

1,318,646

 

 

Service and generation backlog as of October 31, 2020 had a weighted average term of approximately 18 years, with weighting based on dollar backlog and utility service contracts of up to 20 years in duration at inception.  Generally, our government funded and privately funded research and development contracts are subject to the risk of termination at the convenience of the contract counterparty.

Our backlog amount outstanding is not indicative of amounts to be earned in the upcoming fiscal year.  The specific elements of backlog may vary in terms of timing and revenue recognition from less than one year to up to 20 years.  

The Company may choose to sell or retain operating power plants on the balance sheet, thus creating variability in timing of revenue recognition.  Accordingly, the timing and the nature of our business makes it difficult to predict what portion of our backlog will be filled in the next fiscal year. 

 

Competition 

 

Our platforms are based on a range of technologies and target a variety of applications, each of which have incumbent and developing competitors.

 

Our SureSource Carbonate Fuel Cell power plants compete in the marketplace for stationary Distributed Generation fueled by natural gas or Biogas. Several companies in the U.S. are engaged in fuel cell development, although, to our knowledge, we are the only domestic company engaged in manufacturing and deployment of stationary natural gas or Biogas fueled Carbonate Fuel Cells. Other suppliers of stationary fuel cell systems include Doosan Fuel Cell Co. Ltd, which manufactures medium-temperature phosphoric acid fuel cell systems and is developing solid oxide systems, and Bloom Energy, a supplier of solid oxide based systems. Other companies are developing solid oxide systems and other hydrogen-based fuel cell systems for small residential or vehicle auxiliary power units, which are applications we are not pursing. Examples of these developers include Ceres Power Holdings, Ceramic Fuel Cells Ltd, SOLIDPower, Aris Energy, Plug Power, Altergy and Cummins, Inc.  

 

In addition to different types of stationary fuel cells, some other technologies that compete in the Distributed Generation marketplace include micro-turbines, turbines, and reciprocating gas engines. Companies we may compete with that offer this type of equipment include Caterpillar, Cumm