Welcome to this issue of The Fuel Cell Advantage, where you’ll find the latest on how we are putting fuel cells to work in commercial applications everyday.
In this issue:
Interview with Tony Guglielmin, Chief Financial Officer
In this interview, Ballard's CFO discusses the company's future growth strategy.
Interviewer: What are the main growth drivers that Ballard is relying on to create value for its shareholders?
Mr. Guglielmin: Significant progress has been made in 2013, as we focus on executing our strategy. Our business model is built around three main value creation components – fuel cell product sales, engineering services and licensing. And our strategy for each of these elements is fairly straightforward. In product sales, we are focused on the sale of commercial products in our key growth markets of Telecom Backup Power and Material Handling, leveraging our product leadership and exploiting our ‘early mover positioning’ in these markets. In Engineering Services, our strategy is to leverage our deep technical capability and intellectual property, working with ‘lead customers’ in profitable contract programs which may result in additional product opportunities. And in Licensing, we are monetizing our IP portfolio and ‘fundamental know-how’.
Q: Licensing is a relatively new revenue stream for Ballard. Could you speak more about this opportunity?
A: Just this past September Ballard signed our first major licensing deal. The agreement represents an important step in addressing the substantial opportunity for clean energy buses in China. Ballard will provide our partner in China with a license, associated equipment and Engineering Services to enable assembly of our next-generation FCvelocity™-HD7 bus power modules in China – providing revenue of approximately $11 million over the next 12-months. If our partner is successful with its program, the contract will generate future value commensurate with the volume of fuel cell stacks ordered.
Nokia Solutions and Networks Video Features Ballard's ElectraGenTM-ME Systems
New Customer Advisory Board Meetings Provide Valuable Insight
Ballard’s Customer Advisory Board (CAB) is an ongoing customer program, designed to gather communications backup power customers’ perspectives on service, product functionality and product development roadmaps along with sharing of key lessons learned from experiences in the field.
Two CAB meetings were held during 2013, in conjunction with Telecom Backup Power industry events. The first occurred in late June, during the CommunicAsia2013 conference in Singapore, for customers in the Asia region. The second event, for our European and South African customers, followed in October at Intelec 2013 in Hamburg, Germany.
The CAB has proven to be an ideal forum for the exchange of information between customers as well as with Ballard management regarding product experiences, implementation and operations issues or gaps in support. One unexpected outcome has been the facilitation of valuable dialogue between customers sharing insightful perspectives regarding developments in their markets and product deployment experiences. These exchanges are enabled by ‘case studies’ presented by customers, by third-party experts and through general conversation.
During each event, Ballard launched new ElectraGen™ products. The ElectraGen™-ME system, launched in June 2013, is fuelled by methanol and features a number of enhancements that further improve reliability, durability as well as ease of maintenance and servicing. In October, an outdoor enclosure for the direct hydrogen-fuelled ElectraGen™-H2 was introduced, with modular construction and options enabling customization. ElectraGen™ systems were on display at each event, giving attendees the opportunity to view the enhanced features in person.
The initial meetings were well-received and proved to be productive for all in attendance, with enthusiastic support for further discussions of this type in the future. Ballard is looking forward to continuing the productive conversations, with follow up meetings planned in 2014, both via online meetings and in person during Intelec 2014 to be held in Vancouver, Canada in September.
Supporting New System Integrators
Companies developing proprietary system designs incorporating Ballard’s fuel cell stack technology can now benefit from Ballard’s expertise and know-how. Our recently launched Fuel Cell Quick-Start Service is designed for engineering teams that want to rapidly and effectively integrate their Ballard fuel cell product with minimal hurdles. The four-hour knowledge transfer session, conducted online, is an intensive introduction to the Ballard product and ensures customers new to fuel cell technology get off to a good start when beginning system design and integration efforts.
ElectraGenTM Telecom Backup Power Solution Delivers Compelling Benefits in Telstra Network
In a recent article posted on its website, Telstra, operator of Australia’s largest mobile network, addressed the benefits experienced as a result of using fuel cell systems for backup power. In comparison to incumbent solutions, such as diesel generators and lead-acid batteries, the benefits of fuel cells to Telstra have included:
Based on the success of an initial trial program, Ballard ElectraGen™ fuel cell systems are now approved as one of the standard solutions for backup power at Telstra mobile base station sites and at smaller network exchanges.
Read the full article on Telstra’s website: http://exchange.telstra.com.au/2013/10/31/more-power-to-our-network/.
Public Funding for Clean Energy Fuel Cell Buses in Europe
The latest call for proposals, together with an announcement of funding, under the EU Hydrogen Fuel Cell Joint Undertaking has been issued. A total of €23 million in funding has been made available, including €15 million for up to 24 fuel cell buses as well as funding for stationary fuel cell generators.
The EU Hydrogen Fuel Cell Joint Undertaking has been an important supporter of fuel cell bus programs throughout Europe. By 2014 Ballard will be powering 27 fuel cell buses manufactured by partner Van Hool NV, Europe’s fourth largest bus OEM. The Van Hool buses will be operating in such cities as: Oslo, Norway; Cologne, Germany; San Remo, Italy; Flanders, Belgium; and Aberdeen, Scotland. Ballard has also worked with other OEM’s to integrate its fuel cell modules into buses operating in additional European cities, including: London, U.K.; Amsterdam, Netherlands; and Cologne, Germany. In total, Ballard anticipates powering 80% of European fuel cell buses in revenue service in 2014.
The EU Hydrogen Fuel Cell Joint Undertaking is a public-private partnership supporting research, technological development and demonstration activities in fuel cell and hydrogen energy technologies, providing subsidies for eligible projects through a cost share mechanism. The European Commission and industry have each committed to contribute €470 million of funding into fuel cell and hydrogen research through the 2008-17 period. The next program, Horizon 2020, will extend this initiative to 2020, with an incremental budget of €700 million.
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