My local grocery store uses one of these running on diesel, to keep the freezers running in the aftermath of a hurricane.
Christopher Martin -
BLOOMBERG - May 22, 2012
FuelCell Energy manufactures ultra-clean stationary fuel cell power plants --Ed.
FuelCell Energy Inc. may be the first company to turn a profit producing systems that generate power chemically from natural gas, as the fuel’s historic price plunge drives sales.
Revenue began exceeding manufacturing costs a year ago, and Chief Financial Officer Michael Bishop expects to report a profit once annual fuel cell production exceeds 80 megawatts, up from 56 megawatts this year, a target that’s in sight as partnerships in Europe and Asia spur demand.
“Fuel cells are beginning to turn the corner after decades of struggle,” Dan Reicher, executive director of the center for energy policy and finance at Stanford University, said in an interview. “Low natural gas prices are helping drive the market.”
The century-old concept is becoming financially viable as a glut of shale gas in the U.S. drove down prices 80 percent from mid-2008. That’s making electricity from FuelCell’s systems more competitive with utilities, said Walter Nasdeo, an analyst at Ardour Capital Partners LLC in New York.
FuelCell’s biggest customer and biggest backer is South Korea’s largest steelmaker Posco, which ordered 70 megawatts of power plants in 2011 and agreed to buy an additional 120 megawatts in March. Posco, which owns 17 percent of FuelCell, is using the systems at factories and reselling them in Asia. The steel company also licensed the technology and expects to begin making them in 2015.
When combined annual production from Posco and the Connecticut factory reaches 210 megawatts, FuelCell’s average cost of power production will drop as low as 9 cents a kilowatt- hour, Bishop said.
That’s based on a gas price of $8 per million British thermal units, about four times the current price.
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