Partnership

Partnership Overview

Tecogen® Inc. has formed a 50/50 joint venture corporation with Tedom, one of Europe’s largest combined heat and power (CHP) manufacturers. The newly formed Delaware registered limited liability company will utilize Tecogen’s sales and service network to bring Tedom’s efficient cogeneration equipment to the United States market. Offering complimentary CHP technologies, the combined product portfolio of the two companies will better position the joint venture corporation to address a wide array of customer needs and significantly expand the addressable market.

Expanding Market Reach

As part of the agreement, Tecogen will now have access to Tedom’s complete proven line of CHP offerings covering 12 Tedom models from 35 kW to 4 MW that are compatible with natural gas and biofuels (also known as renewable natural gas or RNG). This will greatly expand Tecogen’s market reach, which is currently limited to pipeline natural gas and propane and to installations in multiples of its 75 kW and 100 kW CHP modules. In 2012, President Obama signed an executive order committing to adding 40 GW in new cogeneration capacity in the United States by 2020. This joint venture creates a strong new competitor in the North American CHP space that will offer a full suite of efficient and cost effective clean energy solutions to meet the demands of customers in almost every size range.

Renewable Natural Gas Opportunity

Most notably, Tedom’s specialized line of cogeneration equipment has the power to operate on biofuel (also known as biogas or renewable natural gas), a renewable energy source with a rapidly growing market. Biogas is a significant byproduct of wastewater treatment plants, landfills and agricultural waste facilities whose chemical energy is often reclaimed by its utilization as a fuel for generating renewable power in the form of electricity. This renewable source of fuel is becoming an increasingly important resource for power generation. Nationwide there are over 1100 engines fueled by wastewater-derived biogas, over 600 fueled by landfill-generated biofuel feedstock, and over 100 running on biogas from agricultural waste according to the American Biogas Council.

A Clean Beginning

In addition to equipment sales and servicing agreements, the joint venture partners will also look to collaborate on manufacturing, development of new products, and improvement of existing products. For financial reporting purposes, Tecogen has determined that the joint venture meets the standards for consolidation under generally accepted accounting principles.