FuelCell Energy Inc (NASDAQ:FCEL) and ExxonMobil (NYSE:XOM) announced the selection of a location to test novel fuel cell carbon capture technology under development by the companies.
The James M. Barry Electric Generating Station, a 2.7 gigawatt mixed-use coal and gas-fired power plant operated by Southern Company (NYSE:SO) subsidiary Alabama Power, will host pilot plant tests of the technology, which uses carbonate fuel cells to concentrate and capture carbon dioxide streams from power plants. The tests will demonstrate carbon capture from natural gas-fired power generation under an agreement between FuelCell Energy and ExxonMobil announced in May, and from coal-fired power generation under a previously announced agreement between FuelCell Energy and the U.S. Dept. of Energy.
This fuel cell carbon capture solution could substantially reduce costs and lead to a more economical pathway toward large-scale carbon capture and sequestration globally.
“The fuel cell carbon capture solution we are advancing with ExxonMobil could be a game-changer in affordably reducing carbon dioxide emissions from coal and gas-fired power plants globally,” said Chip Bottone, president and chief executive officer of FuelCell Energy, Inc. “The carbonate fuel cell solution uses a proven global platform to generate power while capturing carbon dioxide.”
Vijay Swarup, vice president for research and development at ExxonMobil Research and Engineering Company, said ExxonMobil scientists recognized an opportunity to pursue the novel approach to use carbonate fuel cells at natural gas power plants. Current carbon capture processes consume energy, which increases costs. But carbonate fuel cells generate electricity and hydrogen while capturing and concentrating carbon dioxide streams, which will reduce the cost of carbon capture.
“The world’s growing need for electricity makes it critical to continue finding affordable, scalable ways to reduce carbon dioxide emissions from power plants to mitigate the risk of climate change,” said Swarup. “We’re excited about the potential of this novel approach as we continue to work on the scientific fundamentals in the lab and look to prove their viability in the field.”
The pilot plant tests will use FuelCell Energy’s commercial DFC3000® carbonate fuel cell power system to concentrate and capture a portion of the carbon dioxide emissions from the power plant as part of the fuel cells’ power generation process. Flue gas from power generation will be directed into the fuel cells’ air intake system where it is combined with natural gas. The fuel cells concentrate and capture carbon dioxide and also eliminate about 70 percent of smog-producing nitrogen oxide from coal, supporting federal and local clean air initiatives. Following capture, carbon dioxide will be compressed and cooled utilizing standard chilling equipment. Installation of the fuel cell plant will begin after completion of engineering studies that are already under way.
Results from the natural gas pilot test will help guide engineering studies for potential construction of a standalone pilot plant to test the technology at a larger scale, under FuelCell Energy’s existing agreement with ExxonMobil.
The Barry generating station is located near Mobile in Bucks, Alabama, and has 2,657 megawatt total generating capacity from six units fueled by coal and natural gas. Southern Company and Alabama Power have previously conducted carbon capture research at the location and at another power plant in Wilsonville, Alabama, near Birmingham.
ExxonMobil is a global leader in carbon capture and sequestration, and captured approximately 6.9 million metric tons of carbon dioxide in 2015 for sequestration, the equivalent of eliminating the annual greenhouse gas emissions of more than 1 million passenger vehicles. Since 2000, ExxonMobil has spent nearly $7 billion on technology to reduce greenhouse gas emissions, including on energy efficiency, cogeneration, flare reduction, carbon capture and sequestration, and research on lower-emission energy solutions.
According to 2015 data compiled by the U.S. Energy Information Administration, two-thirds of the 4 trillion kilowatt-hours of electricity generated in the United States originated from coal and natural gas. (Original Source)
Shares of Fuelcell Energy are currently trading at $3.88, up 0.17 or 4.73%. FCEL has a 1-year high of $12.24 and a 1-year low of $3.55. The stock’s 50-day moving average is $5.20 and its 200-day moving average is $5.75.
On the ratings front, Fuelcell has been the subject of a number of recent research reports. In a report released yesterday, FBR analyst Carter Driscoll downgraded FCEL to Hold, with a price target of $5.50, which represents a potential upside of 49% from where the stock is currently trading. Separately, on October 25, Roth Capital’s Craig Irwin downgraded the stock to Hold and has a price target of $4.00.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Carter Driscoll and Craig Irwin have a yearly average loss of 21.4% and 4.7% respectively. Driscoll has a success rate of 19% and is ranked #4035 out of 4188 analysts, while Irwin has a success rate of 38% and is ranked #3790.
FuelCell Energy, Inc. designs, manufactures, sells, installs and services stationary fuel cell power plants for distributed power generation. It operates through the Fuel Cell Power Plant Production and Research segment. It offers products for the Ultra-Clean Power and Renewable Power markets.