FuelCell Energy, Inc. (Nasdaq: FCEL) and Alliance Power will supply 500 kilowatts of renewable energy to Santa Barbara.
The two 250-kilowatt Direct FuelCell power plants will supply electric power and heat to Santa Barbara's El Estero Wastewater Treatment Plant, using methane gas from the anaerobic digesters as the fuel source. The power plants are expected to be delivered and operational in the fourth quarter of 2004.
Alliance Power and FuelCell Energy have formed a joint venture to sell electric power and heat to the facility under a long-term power purchase agreement – the first of its kind for FuelCell Energy.
Alliance Power is the turnkey provider to the project and FuelCell Energy will provide the DFC power plants and operations and maintenance services. The 650-degree Fahrenheit exhaust from the power plants will be used to supplement heating of the anaerobic digesters that create the methane gas for use by the fuel cells.
Southern California Edison, administrator for The California Public Utilities Commission's (CPUC) Self-Generation Incentive Program for their service territory, has issued a reservation letter that will provide incentive funding of $2.25 million to the combined entity.
Industrial and municipal wastewater treatment facilities with anaerobic gas digesters present an important opportunity for the FuelCell Energy's DFC power plants. The methane generated from the anaerobic gas digestion process is used as fuel for the Company's DFC power plants, which in turn generates the electricity to operate wastewater treatment equipment at the plant.
Moreover, wastewater treatment gas is a renewable fuel eligible for government incentive funding for project installations throughout the world. The Company has sited five other DFC power plants at wastewater treatment facilities in the U.S. and Japan, including its first one-megawatt DFC1500 in King County, Washington.
In a market study conducted in 1998, the Company identified over 550 municipal wastewater treatment facilities in the U.S. that are capable of producing enough methane from anaerobic gas digestion to fuel a 250-kilowatt or larger DFC power plant. Furthermore, wastewater treatment plants in California are required to provide onsite backup generation to address the critical functions of these facilities. Fuel cells could serve both continuous and backup generation requirements of these facilities.
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