Company Update (NASDAQ:FCEL): Renewable Hydrogen From Tri-Generation FuelCell Energy Inc Included Under California Low Carbon Fuel Standard


FuelCell Energy, Inc. (NASDAQ:FCEL), a global leader in the design, manufacture, operation and service of ultra‐clean, efficient and reliable fuel cell power plants, has received contingent certification for a prospective pathway for its renewable hydrogen generation solution using fuel cells at wastewater treatment facilities under the Low Carbon Fuel Standard (LCFS), administered by the California Air Resources Board (CARB). Under the LCFS, certified pathways define the carbon intensity of various types of alternative fuels. The new tri-generation pathway has a remarkable negative carbon intensity, meaning that a vehicle using hydrogen fuel from tri-generation is not only carbon free, but in fact is offsetting carbon emissions compared to alternatives. Production of renewable hydrogen from megawatt-class FuelCell Energy power plants provides a transportation fuel for fuel cell electric vehicles (FCEV) that is generated in a carbon-neutral and non-polluting process. The inclusion of tri-generation FuelCell Energy power plants in the LCFS Credit Market means that each kilogram of renewable hydrogen supplied for vehicle fueling is eligible for an LCFS credit that can be sold or traded to offset carbon-intensive petroleum fuel usage. Final certification is expected following a specified period of operation and review of performance data of a megawatt-class tri-generation system utilizing renewable biogas as the fuel source.

“Our commercial solution for generating hydrogen is technologically, operationally and financially superior to conventional hydrogen generation alternatives and our ability to generate renewable hydrogen affordably and with private capital is a game-changer that addresses the challenges faced by regulators and auto manufacturers,” said Chip Bottone, Chief Executive Officer, FuelCell Energy, Inc. “The key aspect of supporting the hydrogen infrastructure necessary for widespread fuel cell electric vehicle adoption is a clean and carbon-friendly solution that is priced competitively to the cost of gasoline, which is what we can deliver.”

LCFS, established in 2007 through a Governor’s Executive Order, requires producers of petroleum-based fuels to reduce the carbon intensity of their products, beginning with a quarter of a percent in 2011 culminating in a 10 percent total reduction by 2020. Petroleum importers, refiners and wholesalers can either develop their own low carbon fuel products, or buy LCFS Credits from other companies that develop and sell low carbon alternative fuels, such as renewable hydrogen from tri-generation fuel cell plants. California Senate Bill 1505 directs CARB to develop regulations that ensure the production of hydrogen for transportation use is undertaken in a manner that is consistent with environmental goals.

“CARB’s team performed a complete Life Cycle Analysis (LCA) on our tri-generation system and determined that we have a negative carbon footprint, as our power and hydrogen generation process is net carbon-neutral due to the use of renewable biogas, and is a cleaner use of the biogas compared to alternatives,” said Tony Leo, Vice President Application Engineering & Advanced Technology Development, FuelCell Energy, Inc. “This means that overall, we are negative carbon emitters; a superior result in comparison to other hydrogen generation technologies such as electrolysis or traditional steam reforming.”

“While the LCFS standard is focused on carbon emissions, it is also notable that tri-generation produces hydrogen without using water, which is consumed in both electrolysis and conventional steam methane reforming. Trigeneration uses waste heat and water byproducts produced by the fuel cell during power generation to make hydrogen efficiently and without the need for external water consumption, which is increasingly a concern in certain regions, including California,” continued Mr. Leo. (Original Source)

Shares of Fuelcell Energy closed yesterday at $5.20. FCEL has a 1-year high of $17.40 and a 1-year low of $4.90. The stock’s 50-day moving average is $6.71 and its 200-day moving average is $9.33.

On the ratings front, Fuelcell Energy has been the subject of a number of recent research reports. In a report issued on January 8, Cowen analyst Jeff Osborne maintained a Buy rating on FCEL, with a price target of $23, which implies an upside of 342.3% from current levels. Separately, on the same day, FBR’s Carter Driscoll reiterated a Buy rating on the stock and has a price target of $8.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Jeff Osborne and Carter Driscoll have a total average return of -16.4% and -21.5% respectively. Osborne has a success rate of 40.7% and is ranked #3463 out of 3585 analysts, while Driscoll has a success rate of 13.9% and is ranked #3486.

Fuelcell Energy Inc is an integrated fuel cell company. The Company designs, manufactures, sells, installs, operates and services ultra-clean, efficient stationary fuel cell power plants for distributed power generation.

 

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