Magnetek to Purchase 80 Regenerative Fuel Cell Systems

March 22, 2006 by Jeff Shepard

VRB Power Systems Inc. announced that Magnetek's Telecom Power Systems Group (TPS) has entered into a Letter of Intent (LOI) to purchase eighty 5kW vanadium-based redox regenerative fuel cell VRB Energy Storage Systems (ESS) to be sold to telecom market operators in the U.S. As well, under the terms of the LOI, VRB Power has also agreed to its intent to use the assembly and system integration services of TPS for an additional 50 VRB-ESS units to be marketed and sold by VRB Power directly.

As part of the joint efforts, VRB Power will supply the core-technology for the VRB-ESS units, which will generally include the overall design, cell stacks, electrolyte, tanks and the balance of the battery system, and TPS will be responsible for supplying the electronics, including the rectifier and controller, and assembling and integrating the components into finished VRB-ESS units. TPS will market and sell these VRB-ESS units to telecom market operators in North America.

Tim Hennessy, CEO of VRB Power said "The telecommunications sector is one of the largest and fastest growing global markets for our storage systems. A fundamental component in every cellular network is the battery backup system and its reliability is critical. It is estimated that there are in excess of 150,000 cellular phone towers in North America and 120,000 in Europe, with the global battery replacement market for telecommunications applications estimated to exceed US $800 million annually."

"Existing backup systems incur high maintenance and replacement costs whilst reliability is also a constant concern. The VRB-ESS provides a price competitive solution with more than double the life of existing lead acid backup systems and very low maintenance costs. It is also the most environmentally friendly of all the energy storage systems, a major factor especially given the recently mandated recovery targets for lead acid batteries set by the European Union from 2010."

"Our relationship with TPS is working well and this initial purchase commitment is the culmination of significant joint efforts over the past 12-18 months. We anticipate a growing order book from this relationship. We believe that TPS's design, integration skills and channels to market very much complement our expertise in our core technology and that this strategic relationship is well poised to capture a significant share of the backup systems market in the Telecoms sector," concluded Hennessy.

"In light of the recent increases in the cost of lead acid batteries coupled with the industries' desire to find a viable alternative, the TPS and VRB Power initiative will offer a superior, cost effective backup power solution for our customers," notes Jack Conn, Magnetek's Vice President of Sales and Marketing for Telecom Power Systems.