Energy efficient power plant constructor FuelCell Energy is to sell fuel cells for installation in a group of biogas power plants to BioFuels Fuel Cells, a separate renewable energy company, in a transaction that will see it pass over 4.5MW of capacity.
BioFuels Fuel Cells, which is owned by New Energy Capital and BioFuels Energy, has bought three power plants that are expected to operate late next year.
The three plants, of varying capacities, will be installed at different locations in the San Diego area of California including the University of California, South Bay Water Reclamation plant and the Point Loma Wastewater Treatment plant.
All the plants will convert purified biogas into energy from the Point Loma wastewater treatment plant, enabling the city to convert its waste problem into a revenue stream through directed biogas projects.
The projects will purify biogas and inject it into an existing gas pipeline to supply fuel cells at two different locations in the San Diego area. They will also use by-product heat from the electrical generation process, resulting in additional cost savings.
The advantage of fuel cell energy generation is that it does not involve combustion, thereby eliminating pollutants. In these projects, the fuel cells will replace the current gas flaring used in the city, which is a combustion based process that releases harmful emissions into the atmosphere. It will also replace electricity currently bought from the grid.
San Diego city has estimated the projects will generate about $2.6m in revenue during the next ten years.
They will be financed through a bond issue that has been authorised by the California Pollution Control Authority, in addition to equity and debt investments from the New Energy Capital Cleantech infrastructure Fund and the North Sky Capital CleanTech Alliance fund.
They have also benefited from grants under the California Self-Generation Inventive Program, which promotes the installation of clean distributed generation power sources, as well as the Treasury investment tax credit.
BioFuels Energy will own all three of the fuel cell power plants and FuelCell Energy will service the power plants under a long-term service contract.
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