FuelCell Energy To Develop Landfill Gas Station In California
Zacks Investment Research | Jan 08, 2019 09:35PM ET
FuelCell Energy, Inc.’s (NASDAQ:FCEL) recently announced that it has signed an exclusive option agreement with the County of Orange. The deal is regarding the utilization of landfill gas at the Coyote Canyon landfill in Newport Beach, CA for a fuel cell project.
Details of the Deal
Per the pact, FuelCell Energy has an exclusive right to develop the landfill gas as a source of renewable biofuel. This is expected to culminate in the negotiation and execution of the Landfill Gas Delivery and Site License Agreement.
The company expects to install operating fuel cell systems that will produce both renewable electricity and renewable hydrogen. It is estimated to reach a target output of 2,646-5,291 pounds per day of hydrogen. This plant will supply renewable hydrogen to the largest fuel cell vehicle market of Los Angeles in late 2020.
Upsurge in Fuel Cell Technology Use
Fuel cell generates clean electricity with high-power density, extended range and market-leading uptime based on rapid refueling. Of late, this technology is gaining sheer prominence and witnessing an increased adoption on transit buses and commercial trucks. It is a viable option for vehicles, providing reliability and economic benefits.
Also, to reduce carbon emissions from diesel-powered vehicles, demand for fuel cell electric vehicles is rising by the day. To this end, California Governor Jerry Brown announced to make 5 million zero-emission vehicles operational by 2030 under his California Sustainable Freight Action Plan. This in turn, offered a boost to the market for fuel cell energy already in the state. Also, in this regard, the government proposed a $2.5-billion investment in building 250,000 vehicle charging stations along with 200 hydrogen fueling stations in California by 2025.
Courtesy of inherent zero emissions, Fuel Cell Electric Vehicles (FCEV) are increasingly favored over diesel-powered vehicles. Naturally, soaring popularity of this technology has encouraged fuel cell producers like Plug Power (NASDAQ:PLUG) and Ballard Power Systems (NASDAQ:BLDP) to make acquisitions and sign contracts to reap benefits of growth prospects from this space.
Renewable Market Outlook
According to the U.S. Energy Information Administration, total renewables used in the electric power sector were 15% in 2016, which rose to 17% in 2017. EIA expects the same to provide more than 10% in 2018 and nearly 11% in 2019.
Also, a comprehensive study by the Department of Energy’s National Renewable Energy Laboratory shows that renewables will contribute to more than 80% of total electricity generation in the United States by 2050 compared with the present level of 30%. We may expect fuel cell to generate a substantial portion to this renewable electricity generation of the United States, over time, which should further benefit Fuel Cell Energy.
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Price Movement
Shares of FuelCell Energy have gained 2% in the past month against its Original post
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