FuelCell Energy's (FCEL) Unit Signs 7.4MW Long-Term PPA
Zacks Investment Research | Dec 21, 2018 07:34AM ET
FuelCell Energy, Inc.’s (NASDAQ:FCEL) unit Yaphank Fuel Cell Park, LLC recently announced that it has signed the first of three long-term power purchase agreements (PPA) under the Fuel Cell Resources Feed-In Tariff IV (FIT IV) program. The project is administered by PSEG Long Island.
Details of the Deal
The company inked a deal for a 7.4-megawatt (MW) fuel cell project located in Yaphank, NY, which is one of the three projects totaling 39.8 MW that is awarded to FuelCell Energy as part of the FIT IV competitive bid process.
The company has finished permitting, engineering and site design required to make progress in this innovative project construction in Long Island. Notably, power from the Yaphank project will be sold under a 20-year power purchase agreement. Moreover, the company will own, operate and maintain the fuel cell power plants, which are being installed.
Apart from the above project, the company has two other selected projects totaling 32.4 MW, which have made substantial progress and are expected to execute PPAs in the near term. The company expects to complete the development of these landmark projects and anticipates to commence construction in 2019.
Rising Usage of Fuel Cell Technology
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 increased adoption on transit buses and commercial trucks. It is a viable option for vehicles, providing reliability and economic benefits.
To reduce carbon emissions from diesel-powered vehicles, the demand for fuel cell electric vehicles (FCEVs) is increasing. Courtesy of inherent zero emissions, FCEVs are increasingly favored over diesel-powered vehicles. Naturally, rising 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 the benefits of this space’s growth prospects.
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. A comprehensive study by the Department of Energy’s National Renewable Energy Laboratory (NREL) shows that renewables will contribute 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 contribute a substantial portion to this renewable electricity generation of the United States, over time, which in turn should benefit Fuel Cell Energy.
Price Movement
Get The News You Want
Shares of FuelCell Energy have lost 72.3% in the past year, underperforming its Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.