DANBURY, Conn., Apr 30, 2002 /PRNewswire/ -- Caterpillar Inc. (NYSE: CAT) and FuelCell Energy, Inc. (Nasdaq: FCEL) have formalized and expanded their agreement to distribute and develop ultra-low emission Direct FuelCell (DFC(R)) power generation products for industrial and commercial use. Under the ten-year alliance agreement, customers will now be able to buy these innovative systems from Caterpillar dealers in selected regions in North America.
The agreement, signed April 26, 2002, strengthens the relationship FuelCell Energy and Caterpillar established in November 2001. It calls for the companies to jointly develop Caterpillar-branded power plants in the 250kW to 3MW size range, incorporating FuelCell Energy's fuel cell module. (For reference, 1kW represents enough electricity to power an average home.)
The companies will also explore the development of a hybrid power system utilizing Caterpillar's turbine engine technology and FuelCell Energy's products. These efforts build on the strengths of each company -- FuelCell Energy's fuel cell module and Caterpillar's technical expertise in systems packaging, electronics, power conditioning and gas turbine engines.
"The alliance between Caterpillar and FuelCell Energy marks another significant milestone in Caterpillar's growth strategy to invest in socially responsible energy solutions. We're pleased with the expansion of our product line, adding FuelCell Energy systems as an additional clean power solution," said Jim Parker, Caterpillar vice president with responsibility for the company's Power Systems Marketing Division. "We continue to strengthen our position as the global leader in distributed power, thanks to Caterpillar's broad product line which delivers low operating costs, proven reliability and global distribution and support."
"Caterpillar's confidence in our technology further validates the inherent value of fuel cells as an important power generation solution," said Jerry D. Leitman, president and CEO of FuelCell Energy, Inc. "This alliance further advances our strategy to work with the power industry's best companies to develop and deliver DFC power plants to customers."
The market drivers for distributed power generation are strong and growing. The global 24/7 economy is demanding reliable energy generation that the present constrained transmission and distribution network cannot accommodate. FuelCell Energy's Direct FuelCells generate electricity with no combustion. Fuel cells are similar to large, continuously running batteries, using natural gas or other fuel to generate electricity through electrochemical reactions. They provide steady power to industrial and commercial customers such as hospitals, hotels, factories and telecommunications facilities.
The agreement with FuelCell Energy introduces reliable, highly efficient, ultra-low emission base load power plant applications to Caterpillar's portfolio of distributed generation power products, which provide on site generation where power is needed. Caterpillar anticipates marketing fuel cell power plants both as separate units, and as parts of more comprehensive base load, peaking and backup power generation systems.
As part of this agreement, Caterpillar will receive warrants to purchase 1.5 million shares of FuelCell Energy Common Stock. The agreement calls for the warrants to be issued on a graduated scale as order commitments are received up to a maximum of 45 megawatts of fuel cell power plants. The exercise prices of the warrants range from $16.69 to $23.37 and the warrants will expire in April 2005.
For more than 75 years, Caterpillar Inc. has been building the world's infrastructure and, in partnership with Cat dealers, is driving positive and sustainable change on every continent. Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The company is a technology leader in construction, transportation, mining, forestry, energy, logistics, financing and electric power generation. More information is available at http://www.cat.com./
About FuelCell Energy
FuelCell Energy, Inc. (http://www.fuelcellenergy.com), Danbury, Conn., is a world-recognized leader for the development and commercialization of high efficiency fuel cells for electric power generation. The Company is developing Direct FuelCell(R) technology for stationary power plants with the U.S. Department of Energy through the National Energy Technology Laboratory, whose advanced fuel cell research program is focused on developing a new generation of high performance fuel cells that can generate clean electricity at power stations or in distributed locations near the customer, including hospitals, schools, hotels, universities and other commercial and industrial applications.
This press release contains forward-looking statements, including statements regarding each company's plans and expectations regarding the development and commercialization of fuel cell technology. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could cause such a difference include, without limitation, the risk that commercial field trials of each company's products will not occur when anticipated, general risks associated with product development, manufacturing, changes in the utility regulatory environment, potential volatility of energy prices, rapid technological change, and competition, as well as other risks set forth in each company's filings with the Securities and Exchange Commission. The forward-looking statements contained herein speak only as of the date of this press release. Each company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in each company's expectations or any change in events, conditions or circumstances on which any such statement is based.
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