Good morning and welcome to FuelCell Energy's Fourth Quarter and Fiscal Year 2022 Financial Results Conference Call. All participants are in a listen-only mode. After the speakers' presentation, we'll conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded. I'd now like to turn the call over to Tom Gelston, Senior Vice President of Finance and Investor Relations. Thank you. Please go ahead, Mr. Gelston.

Thank you and good morning, everyone, and thank you for joining us on the call today. As a reminder, this call is being recorded. This morning FuelCell Energy released our financial results for the fourth quarter and fiscal year 2022, and our earnings press release and our annual report on Form 10-K are available in the Investors section of our website at www.fuelcellenergy.com. Consistent with our practice, in addition to this call and our earnings press release, we have posted a slide presentation on our website. This webcast is being recorded and will be available for replay on our website approximately 2 hours after we conclude the call. Before we begin, please note that some of the information that you will hear or be provided with today will consist of forward-looking statements within the meaning of the Securities and Exchange Commission Act of 1934. Such statements express our expectations, beliefs and intentions regarding the future and include without limitation: statements with respect to our anticipated financial results, our plans and expectations regarding the continuing development, commercialization, and financing of our fuel cell technology and our business plans and strategies. Our actual future results could differ materially from those described in or implied by such forward-looking statements because of a number of risks and uncertainties. More information regarding such risks and uncertainties is available in the Safe Harbor statement, in the slide presentation and our filings with the Securities and Exchange Commission, particularly the Risk Factors section of our most recently filed annual report on Form 10-K. During the course of this call, we will be discussing certain non-GAAP financial measures. And we refer you to our website and to our earnings press release and the appendix of the slide presentation for the reconciliation of those measures to GAAP financial measures. Our earnings press release and a copy of today's webcast presentation are available on our website at www.fuelcellenergy.com under Investors. For our call today I am joined by Jason Few, FuelCell Energy's President and Chief Executive Officer; and Mike Bishop, our Executive Vice President and Chief Financial Officer. Following our prepared remarks, we will be available to take your questions and be joined by other members of the leadership team. I will now hand the call over to Jason for opening remarks. Jason?

Thank you, Tom. And good morning, everyone. Thanks for joining us on our call today. Since we met last quarter, we achieved some exciting accomplishments on our journey to enable the world to be empowered by clean energy. Today, we announced our best annual revenue since 2015 as a result of strong execution of product sales and continued progress on our Powerhouse business strategy. More on that in a few minutes. But before getting into the business results, I always like to give an overview of FuelCell Energy on Slide 3, for anyone who might be new to the FuelCell Energy story. In operation for over 50 years, FuelCell is a leader in developing stationary fuel cell energy platforms. Our goal is to leverage our proprietary technologies to decarbonize power and produce hydrogen. We operate in North America, Asia and Europe. And we are focused on entering more markets around the world as we commercialize and scale our technologies. Our manufacturing facilities are currently located in the United States, Canada and Germany, which creates an efficient distribution network, leverages our centers of expertise, and helps us to meet local content requirements. We have 95 platform installations in commercial operation, which we believe demonstrates the commercial feasibility of our energy platforms. Our first commercial platform was deployed in 2003 in Japan, where we demonstrated our fuel flexibility using biofuels produced on-site. For the full fiscal year 2022, we reported revenues of over $130 million across four revenue categories: Product, Service Agreements, Advanced Technologies and Generation, which together represent diversified sources of recurring revenue under multiyear contracts. In fiscal year 2021 and 2020, we had no revenue from product sales, but they returned to our revenue mix in fiscal year 2022 with orders for 20 molten carbonate fuel cell modules from Korea…

Thank you, Jason. And good morning to everyone on the call today. Now that you've heard from Jason, I will provide some details regarding our financial results. For the fourth quarter of fiscal year 2022, we reported total revenues of $39.2 million compared to $13.9 million in the fourth quarter of fiscal year 2021, an increase of 181%. Looking at revenue drivers by category. Product revenues were $24 million in the quarter compared to no product revenues in the comparable prior year quarter. Product revenues are the result of module sales to Korea Fuel Cell Company or KFC, for which the company recognized $24 million on the Ex Works delivery of eight fuel cell modules from our manufacturing facility in Torrington, Connecticut. Service agreement revenues decreased to negative $1.1 million from negative $0.1 million. The decrease was primarily a result of a reduction in service revenues due to higher future cost estimates related to future module exchanges compared to our prior estimates, which more than offset revenue recognized in the quarter. Generation revenues increased 30% to $8.8 million from $6.7 million primarily due to the completion of the Long Island Power Authority or LIPA Yaphank project during the three months ended January 31, 2022, and the higher operating output of the generation fleet portfolio as a result of module exchanges and continuously improvements during fiscal year 2021. Advanced Technologies contract revenues increased slightly to $7.5 million from $7.3 million compared to the comparable prior year quarter, Advanced Technology contract revenues recognized under the joint development agreement with ExxonMobil Technology and Engineering Company were approximately $1.8 million lower, offset by an increase in revenue recognized under our government and other contracts of $2 million. Gross loss for the fourth quarter of fiscal year 2022 totaled $15.2 million compared to a gross…

Thanks, Mike. I feel it’s important that each quarter we remain grounded with our summary of the Powerhouse business strategy which serves as our guiding strategy toward achieving long-term growth. Shown on Slide 15, the first tenant is grow. We are working to optimize our business for achieving growth in markets where we see significant opportunities for our technology. The second is scale. We plan to scale our existing platform by investing in, extending and deepening our leadership in total human capital across the organization. Across our operation, we are making progress in optimizing capacity for our molten carbonate platform with the goal of achieving 100 megawatts of annualized integrated on-site manufacturing, and conditioning capacity. And third, innovate. Over our 50-year history, we have never stopped innovating. We believe our technologies and our culture enable our participation in the growth of the hydrogen economy and carbon capture, and drive us to deliver on our purpose. We are developing diversified revenue streams by delivering multiple products and services that support the global energy transition. At the beginning of the year, we published our first Sustainability Report. Today, I want to reaffirm our dedication to achieving net-zero which remains in the forefront of FuelCell Energy's priorities. We reiterated our commitment to achieving net-zero on Scope 1 and 2 emissions by 2030 and Scope 3 emissions by 2050. We are aligned with the leading standard organizations and the United Nations Climate Action goals that we believe we can impact. In addition to commitments to our environmental objectives, we are focused on the safety of our employees, the people in our communities in which we work and live, and are maintaining a diverse, equitable and inclusive organization. Before moving to Q&A, I will conclude my prepared remarks with some takeaways on Slide 17. We…

[Operator Instructions] Our first question comes from Manav Gupta from UBS.

Congratulations, guys. A lot of positive developments here. The next leg of development LCC obviously is the commercialization of both the fuel cell and the electrolyzer on the solid oxide side. So, help us walk us through some more details on how you're achieving that. How confident are you that you can actually start getting more electrolyzer orders or fuel cell orders from solid oxide cells in the future? If you could just talk about that?

Manav, thank you for the question, and thank you for joining the call this morning. This is Jason Few. I'll maybe start and then some of the team members may jump in as well. With respect to our solid oxide platform, as we indicated, we have advanced the commercialization process far enough, where we have started to take orders and in fact have secured our initial order with Trinity here in Connecticut for 250 kilowatt platform. We're excited about that opportunity, because that really opens up the aperture for us quite a bit on smaller scale opportunities in the U.S., which for the most part with our molten carbonate platform at 1.4 megawatts, those are opportunities that we previously could not pursue at least domestically. On the solid oxide electrolysis side, it's the same platform that we're utilizing to deliver electrolysis and the work that we've been doing to demonstrate our capabilities, both internally with respect to our efficiencies and the work that we've already done with INL has demonstrated really strong performance for electrolysis. So right now, where we are, as a company, is really focused on scaling our manufacturing capabilities to meet what we believe is going to be demand for our platform giving our efficiency and differentiation. So we feel very confident about where we are, about the commercialization progress we've made, and our ability to scale manufacturing for that platform.

Perfect. My very quick follow-up here is, there is a little bit of increase in CapEx '23 versus '22. And if that should be the case, IRA is a game changer. Help us understand how you will be spending this money and whether this is a good run rate for the next couple of years as you commercialize all these new businesses?

I'll ask Mike to take that one.

Good morning, Manav. And thank you for joining the call. And as Jason hit on, we are investing in solid oxide manufacturing. We have -- in our 10-K, we indicated that we are expanding the size of our footprint in Calgary. So with that, will come capacity expansion. So a large chunk of the expenditures in fiscal '23 are going to that. In parallel to that, we're also looking for additional facilities, potentially in the U.S. as we think about growth in the future around both electrolysis and solid oxide power gen. We're also investing in the carbonate technology capacity expansion as well, thinking about automation in our facilities in Torrington, and then also preparing for the large opportunity around carbon capture with the carbonate platform as well. And looking at implementing CapEx related to that, so that we're prepared for that growth as well. So that's where the chunk of CapEx is coming from for fiscal '23. I would say this a meaningful investment that the company is making in '23 to be able to capitalize on this growth. We'll obviously evaluate future expenditures around CapEx later in fiscal '23 and as we go into fiscal '24, but this gives us confidence in being able to hit the growth plans that we've laid out in the future.

And just to maybe add to that, I mean, if you think about what we laid out in our Investor Day, a $2 trillion market, which we intend to relook at in light of the IRA. If you just think about the opportunities around carbon capture, we tag that at about $1 trillion total available market between now and 2030. And then if you take distributed hydrogen and energy storage, that's another $550 billion or so that we viewed in our outlook. And so that capital that we're deploying is to aggressively go after those opportunities. And when you look at IRA, you look at Canada's response to IRA, and you have to believe that the EU is going to do something similar to IRA, and then you certainly have the same kind of programs happening in Asia. We think those are smart investments for us to make to pursue those opportunities.

Thank you for the detailed response. And thank you for taking the questions and just want to let you know a lot of people are hoping and cheering that you succeed, the world does need to decarbonize and you guys are making a difference. Thank you.

We really appreciate that. Thank you.

Our next question comes from George Gianarikas from Canaccord Genuity.

So just maybe first on the backlog in -- from Hartford, could just go into a little bit more detail of what happened and how we should think about that going forward?

Yes. So, maybe I'll start and then I'll ask Mike to pick up here a little bit. So as we looked at Hartford, there's a couple of factors that we evaluated in terms of our decision around that program. One is, as we looked at the PPA and the timing of the PPA, the questions around interconnection and timing became a risk factor in terms of interconnection being able to be done in times to comply with the PPA. It's a project where we had exposure to gas prices. And as we looked at when we originally did this agreement to now, there's been a pretty significant shift in gas prices. And so as we looked at our ability to manage the gas price risk and that exposure, the risk around interconnection, we made a decision that right now this program didn't make sense for us to continue to move forward. That being said, we will continue to have conversations and look for ways to restructure that PPA. And if we can, we'll look to bring that back into the backlog. But for now, we've made the decision to not move forward. And we've had very little capital expenditure on that project, which we reflected in our financials this quarter. Mike, do you want to add anything?

I would echo what Jason said. Particularly the larger Hartford project was signed at a different time. We have not invested much in that project. We took a small charge in the quarter for about $800,000 related to that project. And really, we want to be investing in our capital that will have a return for the company and to shareholders, and just evaluated these projects, and made the decision to stop at this point and reinvest that capital back into growth investments.

And just as a follow-up. Wondering if you could give us any more detail about the trigen platform in Long Beach. It seems that you gave a little bit of detail around progress there. But anything more? And also if there are other potential customers looking at the trigen platform to deploy as well?

Yes, George. So on that, where we are right now is we've started the commissioning phase for that platform, for the trigen project in Long Beach with Toyota. We are making progress consistent with our plan at this point. We think, overall, the opportunity for the trigen type platform, whether it be port applications, or purely just distributed hydrogen applications where the utilization of fuel is an acceptable way of producing hydrogen as we are in this case using RNG. So we're producing green hydrogen, carbon-neutral power and water. We think there's opportunity for this platform at ports. We think there's opportunities for initial distributed hydrogen, especially when you're in a market where the infrastructure or midstream infrastructure is behind where the technology is in terms of the ability to deliver that hydrogen in a very efficient way. So we think distributed hydrogen has a big opportunity. And we also think where you're going to have high energy prices, this platform creates a great opportunity, because if -- part of the goal on hydrogen is to bring the cost down to somewhere in the $2 or even as low as $1.50 a kilogram. And in a high energy price environment, that's going to be difficult. But even with that, we think that's where our electrolysis platform comes in because of the high efficiency. So we really see this platform as where we can help a customer make the best economic decision for how they produce hydrogen and we can deliver that hydrogen, whether it be from fuel or through the electrolysis process.

Our next question comes from Jeff Osborne from Cowen & Company.

I have a couple of questions. I was wondering if you could touch on the upcoming year, which facilities will be repowered or what the expectation is for repowering in service revenue?

Jeff, thank you. Good morning, and thanks for joining the call. Mike, do you want to talk a little bit about our service program and how we do stack replacements? And then maybe even we can speak a little bit around what we see for Korea as well.

Yes, Jeff, good morning. This is Mike Lisowski. Thank you for the question. Our generation portfolio has assets that are replaced at the end of life according to the degradation schedule. And that's really according to the overall product technology that we have installed. We have a number of five-year life platforms that are coming to replacement. Those are happening on a quarter-by-quarter basis. We keep a rolling view -- now that we have deployed our seven-year technology, we keep a rolling view on those replacements work to optimize the performance of those plants over the life of those assets. And then we replace them according to the times frames and schedules that we’ve forecasted. So although we haven't put guidance out yet to the fact that when and the quantity of those modules that will be replaced, I can say that we are on schedule and on track for fiscal '23.

And Jeff, this is Mike Bishop, just to dimensionalize a little bit more. If you look at total service revenues that we had in fiscal year 2022, about $12.8 million, going back to '21, we were in the $20 million range and back to '20 in the $25 million range. So '22 was certainly a light year from a service replacement perspective. And if you just look at the history, the KOSPO project, for example, was installed around five years ago. So that is up for module replacement. So you would expect to see higher service revenue during the course of this year, just from that one project alone. And as Mike mentioned, there's a number of other sites that are coming up on that transition as well.

Can you articulate -- my second question is. You alluded to the issues with your Korean partner being alleviated on January 1st. Can you articulate what that service revenue potential would be or do existing sites need to wait for their existing agreements to expire before potentially signing up with you folks? So it was a bit -- you were alluding to some potentially positives to be shown in backlog, it sounded like after January 1st, but it was unclear what that is.

Yes, sure, Jeff. So in the settlement agreement that we reached with POSCO, a couple of things happened. One, we regained access to the market, and that access to the market related to new opportunities. And as we've talked about before, the Korea market is largely an RFP market. So in those opportunities, we will be able to compete with those and have been able to do so since the settlement. One of the factors that have really impacted the volume of RFPs in the Korea market to date has been the GENCOs waiting for what they call the clean hydrogen portfolio standard to be released by MOTIE or the Korean government, which really sets what the framework for pricing is in the in the Korea market. The second part of that though related to the settlement was for the existing fleet that's in Korea. For those customers that were sold to by POSCO Energy, we were not able to work with those customers on extending their LTSA up and until the end of this year, December 31, 2022. At the expiration of that provision in the settlement agreement, which will be January 1, we now have the opportunity to work with those customers on those LTSAs. That potential replacement module market in terms of based on what's already been replaced from a module replacement standpoint versus kind of what's coming up over the next couple of years is about 116 megawatts of opportunity. The other key point that I would make in the settlement, maybe the third dimension of that, is that in that settlement, POSCO no longer retain the right to manufacture our modules. So rather FuelCell Energy does that LTSA or KFC or POSCO does that LTSA, those modules must be provided by FuelCell Energy. So we see this as a great opportunity for us. Now, we need to work with those customers starting January 1 to really understand where they are from a platform perspective, what their intentions are around an LTSA. So I would suspect by our next quarter, we'll be able to provide some more color to that after we've had an opportunity to more fully engage directly with those customers.

Our next question comes from Sam Burwell from Jefferies.

I wanted to talk about gross margins and maybe get a better sense from you guys. What are the biggest factors or the most impactful items that can take them higher year-on-year? I mean, you've called a number of already but maybe the -- I mean is it the non-capitalizable costs with Toyota project or stronger product sales, which should absorb more fixed costs or anything you can call out there? And then, I mean as we look forward fiscal '24, maybe once you're commercializing more solid oxide products, is that when you see gross margins really inflect and enter the positive territory?

Good morning, Sam. This is Mike. I will take that question. So maybe at a high level, I'll describe how the company has historically thought about gross margins, and then hit on a few of the things that you brought up there. So from, so the company has four lines of revenue, from a product revenue perspective we’re typically targeting margins in the 10% to 15% range; service, long-term agreements, we're targeting margins north of 20%; generation, we really think about EBITDA contribution there if you look at our financial statements, and you mentioned this. Currently in our financial statements, we're taking charges for non-capitalized costs related to the Toyota project. And we also have depreciation coming through. But when you back that out, the company really targets margins in the -- EBITDA margins in the 20% to 40% range. And then of course, from Advanced Technologies, that's research and development. You've seen strong margins there in the 30% to 45% range over time. So, we would expect Advanced Technologies to continue at that level. But from kind of a high-level perspective, those percentages that I just laid out are what the company is targeting when we're either putting new deals together or how we think about the business over the long-term.

Okay, certainly helpful. One other thing I noticed was that in generation it seems like a project or two kind of fell out of the in-service portfolio. Looked like Triangle Street was one of them and then UCI. The other -- just curious if you could give any color on what happened there and how any sort of assets might be recovered or redeployed?

Sure, good question and thanks for that observation. The Triangle Street project is a project here local in Danbury, right down the street from us. We've -- over the past couple of years, that project has evolved to more of an R&D type project where we're using it to essentially test out certain aspects of our platform, that's the high efficiency fuel cell. So, have evolved that from just a generation site where we're taking revenue to more of an R&D project. So it felt appropriate to remove that from our generation backlog. On the UCI project, that project reached the end of its term. We entered into an agreement with the owner of the project, the UCI Medical Center. They are going through a capital expansion at the UCI Medical Center. So essentially worked out an arrangement where we -- they paid us to essentially remove that asset. Parts of that asset are able to be redeployed in our service fleet.

Our next question comes from Ryan Pfingst from B. Riley.

For the JDA with Exxon extended to August, can you talk about some of the next milestones that you guys would like to hit that would help move that closer to commercialization?

Sure. So the way that this project continues to move forward is there are technical hurdles that we continue to demonstrate with our platform to show that we will be able to achieve the -- not only the capture targets but the power generation targets and cost targets, leveraging our technology as a way in which to really address the carbon capture market opportunity. Going through August, there are a couple of things that we'll do. We started a marketing study, we completed that marketing study. And as a result of that marketing study, we will now begin to look for customer opportunities to do demonstrations with the technology collectively between Exxon and FuelCell. The other thing that we'll do is continue to the optimization work on the technology that will ultimately set up for the decision that Exxon will make with respect to the Rotterdam project where we'll actually demonstrate the technology as well at an Exxon facility as part of this. And so working through August, it's our view that all the technical questions will largely be answered. And that we’ll begin to transition from more of testing and demonstrations to start to work toward commercialization. That's the goal that we have as a company and thus the extension of the agreement.

And then just one more on the solid oxide order with Trinity, how should we think about project timing there? And then maybe more broadly, the ramp up in solid oxide revenue over time?

So the Trinity project is slated as a 2023 project. And we are, as we speak, expanding capacity for our facility in Calgary. We're also doing work here locally in our Torrington unit facility, in Danbury around that technology. We have taken on a lease for larger space to expand our manufacturing capabilities. And so, we are very focused on manufacturing expansion in '23. And as we said, we're taking orders now. And so, we would expect there to be more volume in 2024.

Our next question comes from Eric Stine from Craig-Hallum.

So I was wondering, could you just give us an update? I know previously, you had thought about, I believe the number was 14 potential module sales to KFC by year-end. And then as you mentioned, those replacement modules to that market would likely come from you. So maybe how you think about module sales going forward as we get into calendar year '23?

Sure. Good morning, Eric. This is Mike and thank you for the question and the observation. And you're correct to your point. In the settlement agreement that we laid out with POSCO Energy and KFC, there was a provision by which KFC could order an additional 14 modules. We had a fixed price and a fixed agreement around warranty provisions. That option is available to KFC until December 31st. As of today, that option has not been exercise. We have not announced that. And as Jason mentioned, going forward after January 1st, the company can go out and talk to customers that are that are currently customers of POSCO Energy to potentially capture the opportunity in Korea, as Jason mentioned, over 100 megawatts of module replacements currently available will certainly happen over time. So getting prepared for those discussions and expect to be in Korea in earnest to work through that the beginning of '23.

And then maybe second one. Just on the generation portfolio, I know a lot of moving parts. In the past you had provided kind of where you saw breakeven. And at the time, I believe it was 60 megawatts. And so just curious, whether there's a specific number you can give or ways that you think about that as they play out here in '23 and then going forward?

Sure, Eric. I'll take that one as well. And I think so when you think about breakeven from an EBITDA perspective as a business, I think in the past we had pointed at generation portfolio could potentially get the business to EBITDA positive, if you're at that 60 megawatt level. Since then the company has done a bit of a pivot, given the energy transition that's here and the strong market opportunity that Jason talked about. So we've increased investments. So our R&D expenses and our SG&A expenses have gone up as we're taking advantage of the market opportunity, and also commercializing our solid oxide. So I wouldn't look at just the generation portfolio at this point leading the company to break even. I would look at the totality of the revenue opportunities that we've been talking about here, whether it be increased product revenues coming from Korea, and opportunities elsewhere in the U.S. and Europe, whether it be contributions from service as the fleet continues to grow. And also, obviously contributions from generation with the Groton project coming online, you will now see further increase in our generation revenues as we go into 2023. So if you look at kind of where that portfolio has come from, this past year, we did about $36 million of revenue compared to $24 million in the prior year. So you've seen nice increase and contribution coming from the generation portfolio. And of course, we can look forward to Toyota coming online in 2023 as well. So that's how I would sort of characterize the business and the breakeven opportunities as we go forward, Eric.

Our next question comes from Praneeth Satish from Wells Fargo.

I was wondering if you could elaborate on your long-term plans for the solid oxide electrolyzer that you're developing. I guess, what kind of applications could you pair this with? And would it work with an intermittent power source like wind and solar? Or would it need to be paired with a more ratable power source like what you're doing in Ukraine for maximum efficiency?

Praneeth, thank you for joining the call and good morning. Yes, so when we think about our solid oxide platform for electrolysis, it is a high temperature, high-efficiency electrolysis platform. We think one of the core applications in way it will be used is as a way to either firm up capacity of intermittent resources like wind and solar, and then producing hydrogen that could then be used in reverse to actually do power generation when those intermittent resources are not available. We've done a few different things with respect to managing the thermal properties of our platform as a high temperature in the way in which we use and store water from a heat perspective to keep our platform in a situation where we can fast ramp around intermittent resources in addition to the ability to use small trace amounts of electricity to continue to keep those thermal property sets. So we feel really confident about our ability to leverage intermittent resources as a way to generate hydrogen through electrolysis. With respect to baseload resources, as an example, like nuclear, like the small scale nuclear reactor for the Ukraine or large scale nuclear platforms that exist today, we think that the differentiation is even greater there because of the fact that we're high temperature, highly efficient. And not only from a, the ability to convert that electricity but to use the waste heat from nuclear which is abundant and be able to operate at an efficiency of up to 100% electrical efficiency in converting that hydrogen. And that's a significant difference between our technology and then low temperature technologies like PEM and Alkaline, which can't take advantage of that waste heat, anyone without the waste heat already operate at a material difference between efficiency. And so, we feel very confident about our ability to operate not only with a -- in a nuclear type application, but also with intermittent resources. And we think that that's -- we think that electrolysis and hydrogen, and using hydrogen as an energy store is incredibly important. And we think that that's actually a much better resource than mineral-based resources. Because your ability to store hydrogen very similar to like you store natural gas today in salt caverns, it is regenerative. It is locally produced. It doesn't have the same challenges potentially that exists with lithium-ion batteries, both from a mining, geopolitical, rare earth minerals and other issues tied to that. So we feel pretty excited about that opportunity.

Our last question will come from Noel Parks from Tuohy Brothers.

I'll just start with the last topic. When you're talking about integrating hydrogen as a storage medium, integrating that with intermittent energy sources, the software piece of that, the EMF, is that proprietary technology you're developing in-house or are you envisioning integrating with third-party technology on that piece?

No, great question. I'll ask Tony Leo to talk a little bit about that.

Yes. We are developing that software in-house. We are, for example, right now, operating a reversible system that is alternating between hydrogen production and consumption, just like we demonstrated electrolysis in our lab and now we've evolved that into our standard product design. We're at that phase with energy storage right now where we're working through the algorithms actually operating a system, learning what works best, and that will be our proprietary control technology.

I did want to just step back for a second to the experience of Groton, clearly, a long path there, was including some of the slog as far as the implementation processes, within Navy's on procedures and so forth. Any lessons learned with the benefit of hindsight that are particularly applicable to other implementations you have ahead?

No, in every implementation, we do, one of our practices is to really look at lessons learn, how we can improve, everything from the core technology itself to the EPC process that we use to construct a project in terms of how we engage on site with the host of the platform. And so there's certainly a lot of lessons learned with our implementation in Groton, and we will certainly put all of those to work. In addition to that, through this process, we've obviously made improvements to the platform in terms of how we deal with thermal management. We've taken all of those lessons and we'll continue to look at how those lessons apply across our fleet, rather it's the existing fleet, or on the work that we're doing around new technologies and innovations for our new platforms. And so, certainly a lot learned. And we're glad that we're at COD, and we're going to continue to do things to optimize that platform, as we've indicated.

And just last one for me. With the Exxon JV and you talked about having been through a marketing study, could you maybe drill down a bit as far as what you've learned as far as types of customers that you think it will be kind of prospect for the markets that they might be in? Anything like that would be great.

Yes, sure. So the work that we did really looked at the industrial sector, and that industrial sector cut across everything from food and beverage to oil and gas to petrochemical. And what we learned through that work is that there was clearly demand for carbon capture, there's a lot of customer interest and willingness to deploy technologies, certainly, when you look at 45Q and how that got enhanced in IRA to go to $85 a ton for sequestration, that certainly gets a lot of people very interested in the economics of the opportunity. And we see across the industrial landscape, where you -- if you just think about industrial boilers, for example, there are thousands of industrial customers that use that across a number of different segments, and that all represents opportunity. And I think the study confirmed the interest and the need. And so, I think we're pretty excited about that.

We have no further questions. I would like to turn the call back over to Jason Few for closing remarks.

Julian, thank you. And thank you again for joining us today. We will continue to execute on our Powerhouse business strategy working to deliver growth and optimize returns. The FuelCell Energy team is excited about our work to deliver on our purpose of enabling a world empowered by clean energy. We wish everyone a happy and joyous holiday season. And thank you for joining and have a great day.

This concludes today's conference call. Thank you for your participation. You may now disconnect.