Posco Energy files for provisional attachment order against FuelCell Energy

Seoul Central District Court on Monday accepted a provisional attachment order filed on Jan. 3 by Posco Energy against hydrogen fuel-cell manufacturer FuelCell Energy (FCE), after numerous issues arose with a facility supplied by the U.S. manufacturer.

A provisional attachment order is invoked by creditors that have monetary claims against the debtor.

It has been reported that the leading cause of the problem lies behind a facility that stabilizes 300-kilowatt fuel-cell stacks and affects the efficiency of power generators.

The facility in question was created in June 2016 while the purchasing contracts and technology support contracts were signed in 2014 and 2015, respectively.

The facility, designed and which uses parts supplied by FCE, has been plagued with numerous problems making it unable to operate.

After the facility was created, Posco Energy and FCE conducted a joint investigation and found 97 problems, but despite consistent requests for solutions, the issues remain unsolved due to an uncooperative stance from FCE.

According to a fuel-cell industry official, this is not the first time that FCE has shown such an uncooperative attitude in dealings with Posco Energy.

“Posco Energy established Korea Fuel Cell to speed up the joint venture process with FCE and to increase its competitiveness in the market, but FCE has been ignoring all agreements and making unfair requests. It seems like Posco Energy is no longer considering FCE as the counter party on the negotiation table as they stated legal action against their long term partner.” said the official.

Due to the major deficiencies in the fuel cells provided by FCE in the beginning stages of the business, the cost to repair products has increased dramatically, and such fallout has led to a downfall in Posco Energy’s performance.

FCE is now attempting to enter the Korean market independently.

Generator fuel-cell industries are hoping the two corporations can quickly resolve their issues.
They suggest that foreign corporation FCE trying to enter the fuel-cell market which is supported by the domestic government without the consent of Posco Energy that holds exclusive distribution rights in Asia would be extremely difficult.

Posco Energy has been carrying out active marketing since 2008 to increase the domestic fuel-cell market share and to open new markets with molten carbonate fuel cells and create 500 billion won ($433 million) worth of production facility in Pohang, North Gyeongsang.

By Kim Seung-jun [kim.seungjun@joongang.co.kr]