FuelCell Energy, Inc. (Nasdaq: FCEL) announced the sale of 4.5 megawatts (MW) of power plants to BioFuels Fuel Cells, LLC, a California renewable energy company owned by New Energy Capital and BioFuels Energy, LLC.
Financial terms were not disclosed.
Three fuel cell power plants will be installed at different locations in the San Diego, California area and will utilize purified biogas from the Point Loma wastewater treatment plant as the primary fuel source for the generation of electricity witin the fuel cells.
The project incorporates a unique solution that purifies the biogas on site, and then injects the biogas into an existing gas pipeline to supply fuel cells at two different locations in the San Diego area. Termed 'directed biogas,' this project will represent the first time that a FuelCell Energy power plant will be fueled by renewable biogas generated at a distant location
Fuel cells generate electricity cleanly and efficiently using an electrochemical process that does not involve combustion. The lack of combustion eliminates almost all pollutants such as NOx or particulate matter. The fuel cells will replace the current gas flaring, a combustion based process that releases NOx, SOx and particulate matter and will replace electricity currently purchased from the electric grid.
This project will eliminate the emission of approximately 68,100 pounds of pollutants annually, which is equivalent to removing approximately 1,136 cars from the road.
The three fuel cell power plants will be configured to utilize the byproduct heat from the electrical generation process. Fuel cells can achieve up to 90% efficiency when the byproduct heat is used in a combined heat & power (CHP) configuration. This results in additional cost savings for the clients as the fuel cell provides both clean electricity and high-quality usable heat.
A 2.8 MW fuel cell will be installed at the University of California--San Diego to supply power to the campus electrical grid. On-site power generation allows the University to gain greater control over its power supplies by generating power around-the-clock with the fuel cell. The University will utilize the byproduct heat from the fuel cell energy generation process as a continuous power source for 320 tons of chilling capacity to cool campus buildings, increasing the overall efficiency of the power plant and generating cost savings for the University.
A 1.4 MW fuel cell will be installed at the South Bay Water Reclamation Plant in San Diego, CA. This municipal facility is a pump station that does not generate biogas on site. The fuel cell power plant will provide reliable base-load power around-the-clock, replacing power purchased from the electric grid. Byproduct heat will be used for heating needs at the pump station, increasing the overall efficiency of the power plant.
A 300 kilowatt fuel cell will be located at the Point Loma Wastewater Treatment Plant and will generate the power required for the biogas purification process. Biogas generated from the wastewater treatment process will fuel the DFC300 power plant and provide directed biogas to the existing gas pipeline.
The City of San Diego estimates the project will generate $2.6 million of revenue over ten years from payments made by BioFuels Energy for the biogas. In addition, the City expects to save $780,000 in electricity costs to power the South Bay Water Reclamation Plant under a ten year power purchase agreement with BioFuels Energy.
"This project is a perfect example of far-sighted government working with industry to creatively solve waste problems for the City of San Diego in an economically compelling manner," said R. Daniel Brdar, Chairman and CEO of FuelCell Energy, Inc. "The use of directed biogas allows customers at distant locations to generate clean power while decreasing their carbon footprint and reducing pollutants."
The project is being financed by the issuance of bonds authorized by the California Pollution Control Authority, equity and debt investments from the New Energy Capital Cleantech Infrastructure Fund and the North Sky Capital CleanTech Alliance fund, and grants under both the California Self-Generation Incentive Program (SGIP), which promotes the installation of clean distributed generation power sources, and the U.S. Treasury investment tax credit.
BioFuels Energy LLC will own all three of the fuel cell power plants. FuelCell Energy will service the power plants under a long term service contract and the units are expected to be operational by the summer of 2011.