FuelCell Energy: DOE Contract Should Give It A Boost

Oct.24.06 | About: FuelCell Energy, (FCEL)

FuelCell Energy, Inc. (NasdaqNM:FCEL), has finalized terms with the U.S. Department of Energy [DOE] for a $36.2 million Phase I award to develop a coal-based, multi-megawatt solid oxide fuel cell-based hybrid system.

The program’s overall objective is to develop solid oxide fuel cell [SOFC] technology, fueled by coal synthesis gas (coal gas) that will be used in highly-efficient central generation power plant facilities. The system is to have an overall efficiency of at least 50 % in converting energy contained in coal to grid electrical power, in contrast to the approximately 35 % efficiency of today’s average U.S. coal-based power plant.

The envisioned SOFC-hybrid system is expected to capture 90 percent or more of the system’s carbon dioxide emissions for environmentally safe disposal while being cost-competitive with other base load power generating technologies. The project will culminate with the fabrication and operation of a multi-MW proof-of-concept SOFC-hybrid power plant at a suitable location, using coal-derived synthesis gas as fuel. FuelCell Energy may consider submitting the project to the FutureGen Alliance Inc. for possible inclusion in the FutureGen Power Plant.

During Phase I the work will include:

* scale-up and performance enhancement of the existing SOFC cell and stack configuration
* engineering design analysis for a proof-of-concept power plant and cost analysis
* testing of a stack building block unit operating on simulated coal syngas
* construction and test of an 80-100kW capacity stack tower, comprised of these building block units, to validate design components associated with a multi-stack tower

In recently-completed Phase I testing as part of the DOE Solid State Energy Conversion Alliance [SECA] Cost Reduction project, a 3kW SOFC prototype system operated for over 2000 hours and successfully met or surpassed all DOE performance metrics for power output, efficiency and degradation (life). Applicable elements of this existing SECA project will be integrated into the new project’s technical objectives, based on similarities in cell and stack development.

In February, FuelCell Energy was selected by the DOE as a prime contractor for this award and is responsible for the overall systems development of the power plant. Other team members for the newly awarded Fuel Cell Coal-Based Systems project include: Gas Technology Institute [GTI], providing advanced gasification clean-up technology; Nexant, Inc. providing coal gasification and carbon sequestration expertise; WorleyParsons Group Inc. providing engineering, procurement and construction support and SatCon Technology Corporation, providing power conditioning system engineering.

This award provides funding for the first stage of the 10-year, three-phased Fuel Cell Coal-Based Systems project, part of SECA. Total project funding for this and the other two planned phases is anticipated to be approximately $180 million.