CEO Interview: FuelCell Energy, Inc.(FCEL) - R. Daniel Brdar
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R. Daniel Brdar was named CEO of FuelCell Energy, Inc., in 2006 and Chairman in January 2007. Mr. Brdar has over 24 years of combined technology development and new product introduction experience in a variety of executive positions. He previously held management positions at General Electric, where he focused on new product introduction programs for GE's Power Systems business unit, and he was Product Manager for its gas turbine technology. Prior to GE, Mr. Brdar was Associate Director, Office of Power Systems Product Management at the U.S. Department of Energy. He earned his B.S. degree in engineering from the University of Pittsburgh.
TWST: Would you begin with a brief overview of your company?
Mr. Brdar: We've been around for a long time, been around for 40 years. What our company does is we focus on manufacturing large-scale, ultraclean stationary fuel cells, really targeting industrial, commercial and utility-scale applications. And the product that we make is one that provides clean, efficient, cost-effective energy for our customers. And we do that through a technology that electrochemically converts a fuel, like a biogas or natural gas, into clean electricity. It's a product that we developed in combination with the U.S. Department of Energy, so we now have this commercial product that we're manufacturing in our home state of Connecticut and shipping around the world. Internationally, the largest market for our products is in Asia.
TWST: Tell us a bit about your Korean partner.
Mr. Brdar: POSCO Power, they are the largest independent power producer in Korea. They are a subsidiary of POSCO, which I believe is the fourth-largest steel company in the world. They partnered with us exclusively for the Korean marketplace, because they bring the local access and the local capability, and we bring the products and the technology. And in the longer term, there are a lot of synergies because some of the primary components of our product are nickel and stainless steel. So being part of a steel company, there are a lot of long-term synergies that we can build off of.
TWST: What do you think sets you apart from your competitors, and what advantages are you able to offer to your customers?
Mr. Brdar: Our products have the highest electrical efficiency of any power generation equipment in their size. That high efficiency means that we're going to use less fuel to make a kilowatt-hour of electricity than any other product, which really contributes significantly to our cost competitiveness. But also because of that high efficiency, it means that we're also going to have lower emissions of greenhouse gases, like carbon dioxide, compared to other technologies. We've also developed a product with one of our strategic partners, Enbridge, a Canadian-based natural gas transmission company, specifically for the natural gas distribution system that has electrical efficiencies in excess of 65%, which is greater than what can be done with any power generation equipment of any size. Our products are also very quiet, and since we don't combust the fuel, we have virtually no harmful emissions, which means you can site or locate the product and have it operate on a continuous basis almost anywhere, even a downtown urban area like New York City or Los Angeles. And this just can't be done with traditional combustion-based power generation products like engines and turbines. And then among fuel cell companies in particular, we're the only company that's producing commercial megawatt and multimegawatt power plants. Our products range in size from as small as 300 kilowatts, which will be enough power for about 150 homes, all the way up to 2.8 megawatts. And we are doing projects at the utility scale that use multiple 2.8 megawatt units that can be put together for projects of up to 40 megawatts to 50 megawatts in size.
TWST: Your revenues were down 33% in Q1 compared to the same period last year. What factors caused the decline, and what strategies do you have in place to grow revenue this year?
Mr. Brdar: Like most companies, our revenues were really impacted by the slowdown in the economy and the lack of financing for our customers. Since we're making capital equipment, there is a long lead time associated with the purchase and delivery of our equipment, typically eight to 10 months. So what you saw in first quarter of this past year, with the reduced revenue, really was a direct reflection of slowdown in orders from the U.S. market that happened in 2009, largely just driven by the credit crisis and the inability of our customers to get financing. Fortunately for us, our market in Asia has continued to grow, so we ended up entering the fiscal year with the highest backlog in our history, largely driven by orders from Asia. Going forward, our growth is really going to come from several areas. Earlier this year, South Korea passed a national renewable portfolio standard that specifically includes fuel cells operating on natural gas.
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