500 $ Mio for FCEL
4 Government-Funded FuelCell Energy Projects (FCEL) By Thom Tracy | June 27, 2016 — 1:30 PM EDT
Alternative energy sources, such as wind and solar power, offer increased operational efficiency and elimination of carbon emissions. The major disadvantage for both clean energy options lies primarily in the inability for either source to produce energy constantly. Fuel cells produce electricity through a chemical reaction, similar to a battery. With a continuous supply of natural gas or other nonrenewable resources, fuel cells generate power without the need for recharging, and emit little pollution into the atmosphere. In addition, heat is a byproduct of the hydrogen reaction within the cells, and can be harnessed, which makes the source an optimal and inexpensive option for industrial applications. FuelCell Energy Inc. (NASDAQ: FCEL) is the largest public U.S. fuel cell developer, operating 50 plants in South Korea, Germany, Spain, Canada, the United States and the United Kingdom.
University of Bridgeport
As part of Connecticut's Low-Emission Renewable Energy Credit program (LREC), FuelCell, based in Danbury, Connecticut, built a 1.4 megawatt (MW) fuel cell plant for the University of Bridgeport that is intended to service approximately 80% of the college's power needs. The school benefits from off-grid power reliability and energy independence, while reduced carbon dioxide and nitrogen oxide emissions are produced as a result of the process. FuelCell, as part of the state's LREC, receives energy credit payments tied to megawatt hours of energy output. Connecticut awards the incentive to low project bidders based on price per kilowatt hour.
Beacon Falls, Connecticut
Providing electricity to 60,000 Connecticut homes, construction on the Beacon Falls Energy Park, supplemented by LREC, will begin in 2016 and is expected to conclude in 2019. The 63.3 MW facility will surpass the capacity of the South Korean Gyeonggi Green Energy Co., Ltd. plant, which is the largest fuel cell facility in the world. The deal is estimated to be worth $500 million for FuelCell, as it will manufacture the Connecticut town's individual units that stand 13 feet high, weigh seven tons and generate 350 kilowatts of electricity. The estimated value of the Beacon Falls project far exceeds FCEL's $186.9 million market capitalization, as of April 8, 2016. With a backlog of $408 million, as of March 31, 2016, there is significant demand for the energy producer's products and services. Yet revenues for the first quarter of 2016 came in at $33.5 million, which is an indication of the significant capital required in the renewable energy industry.
Gyeonggi Green Energy Co., Ltd.
In the international market, near Seoul, South Korea, FuelCell developed and sold 21 individual cell units for Gyeonggi Green Energy Co. Ltd., the world's largest fuel cell power plant, which annually generates 440 million kilowatt-hours of electricity used to generate heat for the surrounding district. Occupying only 5.1 acres, the plant's minimal land requirement and quiet mode of operation allow the facility to be situated near the urban areas to which it supplies power. FuelCell also opened an 11.2 MW energy park in Daegu Metropolitan City, South Korea, that generates electricity for the city and provides heat for a wastewater treatment plant. The South Korean government subsidizes foreign manufacturers of fuel cells through a research and development tax credit program, reducing import duties on equipment by 50%.
University of California, Irvine Medical Center
California's Self-Generation Incentive Program (SGIP) offers a maximum of $5 million in capital incentives per project for direct fuel cell companies. FuelCell acquired $30 million in project financing from PNC Energy Capital LLC, a firm that provides funding to renewable energy companies. Expected to increase cash flow and service margins, the cash infusion helps fund the development of a 1.4 MW power plant designed to supply heat and electricity to the University of California, Irvine Medical Center. The energy producer will receive revenues from a multi-year purchase power agreement (PPA), where the hospital agrees to buy power from FuelCell, the owner of the energy park.
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