Ceres Power inks fuel cell manufacturing deal with Doosan

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Ceres Power Holdings PLC (LON:CWR) has agreed an expanded collaboration with South Korean group Doosan, which has been given the licence to manufacture the UK company’s proprietary solid oxide fuel cell stacks.

Doosan plans to build a manufacturing facility with an initial 50MW capacity by 2024.

The Doosan deal is worth GBP36mln to Ceres over three years, plus a further GBP7mln potentially due subject to key performance indicators (KPIs). This income precedes longer term royalties on the sale of fuel cell stacks.

READ: Ceres says trading remains strong

Doosan, which becomes Ceres’s third global manufacturing partner alongside Bosch and Weichai, has been focused on developing a 5-20kW combined-heat-and-power boiler-style unit for the commercial buildings market, since signing an initial collaboration agreement last year.

Under the new announcement unveiled on Monday it can now manufacture the stack that is used in that system.

“We are absolutely delighted to welcome Doosan as a strategic manufacturing partner and to broaden our relationship to target utility-scale systems. Doosan has an enviable track record in commercialising fuel cell technology,” said Phil Caldwell, Ceres chief executive in a statement.

“Our success is measured by our partners’ success and this is further validation of our asset-light, licensing business model that enables the world’s most progressive companies to adopt our technology at scale and speed.”

Hyunsoo Dong, Doosan Corporation vice-chair added: “By partnering with Ceres Power, Doosan will expand its product portfolio and strengthen its position as the leader in the fuel cell industry.

“We are excited to expand on our existing collaboration to build a world-leading SOFC stack mass manufacturing centre and to create a strong fuel cell industry ecosystem in Korea and beyond.”

Ceres shares surged to a new all-time high above 790p on Monday and by early afternoon were still up more than 9% at 760p, or 180% higher than where they started the year.

Analysts at stockbroker Liberum Capital noted that this represents the company’s biggest licence deal to date.

“Doosan appears to have secured a global non-exclusive stack license suggesting it may seek to put Ceres technology into large power systems internationally in time,” the analysts said.

They added: “The Doosan up front fees are the biggest Ceres has secured so far given Weichai agreed fees are GBP30mln and Bosch GBP20mln.”

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