UK fuel cell technology developer Ceres Power has signed an agreement with Bosch and Weichai for two stationary fuel cell joint ventures in China.
Both companies are investors in Ceres, and the addition of Bosch to the existing joint venture in a three-way non-binding Heads of Terms agreement will see two separate JVs in Shandong Province.
A three-way system JV will be set up for the development and manufacture of solid oxide fuel cell (SOFC) systems for stationary power generation. This uses solid oxide fuel to produce power, avoiding the challenges of moving and storing liquid hydrogen or methanol. As a result fuel cells are increasingly popular for providing power to data centres.
Bosch and Ceres will licence their respective SOFC system IP to the JV for mobile and stationary applications in China and will share royalties from the sale of products, while Weichai will be the majority shareholder.
The investment over time is likely to be around £20 million, to be finalised in the detailed agreements.
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Separately, a stack manufacturing JV will be established to supply fuel cell stacks to the system JV and potentially other third parties. The Stack JV would be the second manufacturing facility for Bosch and is planned to follow its initial 200MW facility in Germany, where start of production is anticipated for 2024.
With this JV, Bosch will be the majority shareholder and Ceres will not be a shareholder but will provide the SOFC technology through an extension of Bosch’s existing manufacturing licence to supply the Chinese market. Ceres will receive royalties from this JV on the sale of stacks.
Ceres expects to see license fees of £30 million from the System JV and Stack JV over the next three years in line with those agreed in the original Weichai-Ceres agreement in 2018. Detailed agreements are now being prepared, with the JVs intended to be formed following the signing of definitive contracts.
“This exciting collaboration represents an important step in Ceres’ ambitions for the Chinese market and a critical part of delivering global manufacturing capacity for our technology,” said Phil Caldwell, Chief Executive Officer of Ceres. “We have every confidence in our partnership with Weichai and with the addition of Bosch’s expertise in industrialisation and manufacturing have the potential to establish one of the strongest partnerships in the fuel cell industry.”
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