MagneGas (NASDAQ:MNGA), a company that has invented a patented process to convert liquid waste into a hydrogen-based fuel, said that one of the five largest electric utilities in the U.S. has approved its special fuel to replace acetylene at the new customer's power and repair facilities.
The name of the utility was not disclosed due to concerns over "competitive interference" during the product roll-out period,MagneGas said, which will occur over the next several months.
MagneGas has an aggressive plan to expand the sales of its promising hydrogen-based fuel, which is looking to make waves in the industry as a greener natural gas alternative that has lower emissions than any fossil fuel currently on the market.
Its process to convert liquid waste into its hydrogen-based fuel, known as MagneGas, involves the flow of carbon-rich liquid feedstock through a 10,000 degree Fahrenheit electric arc between two carbon electrodes. The process sterilizes the liquid waste, which can include anything from manure or sludge to medical waste, and produces the hydrogen-based fuel, which also contains carbon and trace gases.
Its target market is the $5 billion metal cutting industry, where MagneGas is seeking to replace acetylene, claiming its home-grown, US patented hydrogen-based gas is cheaper, uses 34 percent less oxygen and also cuts 38 percent faster. The fuel also dissipates into the air unlike acetylene, which pools on the ground and creates a major risk for an explosion.
Indeed, the company's MagneGas2 fuel was tested by the U.S. utility for over one year, with findings showing that the cut speed was faster than acetylene and the pre-heat time was shorter, which could lead to higher productivity.
The superior safety aspects of the green fuel were also highlighted, as was the lower environmental impact of using a fuel produced from a renewable source.
"Acetylene is known to be one of the most dangerous industrial gases available on the market today and our testing has shown that MagneGas2 is faster, safer and cleaner than acetylene and to our knowledge, is the only renewable cutting fuel available," said MagneGas chief executive Ermanno Santilli.
"This is expected to become the most significant retail customer for MagneGas."
The company continues to implement its three-pronged strategy aimed at bringing MagneGas to exit 2015 at a break-even run rate. This includes industrial gas sales for the metal working market, equipment sales for liquid waste processing and the use ofMagneGas for the co-combustion of hydro-carbon fuels to reduce emissions.
Last month, it completed the initial testing of its MagneGas system at a major hog farm in Indiana, proving that its patented system can fully sterilize manures.
Shares of MagneGas surged almost 24 percent to 89 cents in early trading on Tuesday, pushing year-to-date gains to nearly 31 percent.