UPDATE 2-FuelCell Energy gets largest ever order; shares jump

* Announces 70 megawatt order from POSCO Power

* Expects total value of order, services to be at least $129 mln

* Says to begin delivery of fuel cell kits in October

* Shares rise as much as 23 pct; touch near 1-month high (Adds details on an about $9 mln charge; updates share movement)

May 31 (Reuters) - FuelCell Energy Inc said it received a $129 million order for 70 megawatts (MW) of fuel cell kits from South Korea's POSCO Power .

The company's shares rose 23 percent to near one-month highs of $1.79 in early trade on Tuesday on Nasdaq.

Danbury, Connecticut-based FuelCell Energy, which makes fuel-cell power plants for electric power generation, said the contract was its largest ever.

The company, with a market value of $181.38 million, said it will deliver the kits every month for two years beginning this October to POSCO Power, a unit of steelmaker POSCO .

The contract will almost double product sales and service backlog, said Chief Executive Chip Bottone. Higher production levels will help the company drive costs further down, he said.

FuelCell Energy said it will be paid about 40 percent of the contract value in October.

Fuel cell units, which combine hydrogen and oxygen electrochemically to produce electricity, can be used to power telecom towers and households in remote areas where grid power is not available.

FuelCell Energy, which has its major clients in South Korea and Japan, expects to increase its footprint in Asia. [ID:nL3E7EA22A]

The company said it will take a charge of about $9 million to its second-quarter earnings related to repair and upgrade of 1.2 MW fuel cell modules produced between 2007 and early 2009. (Reporting by Mayuresh Tungare in Bangalore; Editing by Maju Samuel)