FuelCell Energy lines up financing from PNC for its power projects

FuelCell Energy (Nasdaq: FCEL) on Dec. 15 announced a $30 million project financing facility with PNC Energy Capital LLC, a full service capital provider to the renewable energy and demand side management segments of the energy industry.

This facility provides long term financing for projects that FuelCell Energy is developing under power purchase agreements (PPAs). PNC Energy Capital will provide financing through a sale / leaseback structure to select project subsidiaries formed and owned by FuelCell Energy.The financing facility monetizes the tax benefits and cash flows from customer PPAs.

“PNC is committed to renewable energy, dedicating resources and building expertise to customize finance programs for the energy services industry,” said Dick Rai, senior vice president and manager of PNC Energy Capital. “As a leader in megawatt scale class deployments of clean, efficient baseload power plants, FuelCell Energy is an important strategic alliance for us, offering long-term opportunities and, most notably, adding fuel cells to our growing portfolio of clean and renewable assets.”

Financing from PNC Energy Capital will broaden FuelCell Energy’s financing capabilities, which is expected to accelerate deployment of fuel cell projects.

“We are excited to team up with PNC and add this important and scalable financing structure to our commercial deployment platform,” said Michael Bishop, Senior Vice President and Chief Financial Officer. “This efficient financing platform enables FuelCell Energy to retain management of certain power purchase agreements and should further enhance cash flows and service margins”.

The first project to close under this structure is expected to be the previously-announced 1.4-MW fuel cell plant which provides both electricity and heat to the University of California, Irvine Medical Center (UCI). The power plant will generate about 30% of the facility power needs, while the heat produced will be used in a direct exhaust absorption chiller to produce 200 tons of cooling for an office building and associated institutional requirements. The installation is expected to achieve commercial operations in December 2015, with the project then financed under this PNC facility. FuelCell Energy will operate and maintain the plant and sell power under a long-term power purchase agreement to UCI.

Fuel cells electrochemically convert a fuel source into electricity and heat in a highly efficient process that emits virtually no pollutants due to the absence of combustion. The Direct FuelCell (DFC) stationary fuel cell power plants manufactured by FuelCell Energy utilize carbonate fuel cell technology and provide continuous power located where the power is used, including both on-site applications and electric grid support. The power plants are fuel flexible, capable of operating on clean natural gas, on-site renewable biogas, or directed biogas. Deployments range in size from 1.4-MW university and hospital campus installations to 60+MW utility-scale fuel cell parks.

In examples of its projects:

  • FuelCell Energy, on behalf of Pepperidge Farm Inc., on Dec. 4 asked the Connecticut Siting Council to declare that a siting certificate is not required for its 1.4-MW fuel cell combined heat and power project at a Pepperidge Farm bakery facility in Bloomfield, Conn. FuelCell Energy has an EPC contract with Pepperidge Farm to build this project. This new facility would be located next to a 1.2-MW fuel cell facility that FuelCell Energy installed in 2008.
  • FuelCell Energy said May 5 that it is working with O&G Industries, a leading construction company in the Northeast, and project developer CT Energy & Technology LLC on a 63-MW fuel cell park in Beacon Falls, Conn.

With more than 300 MW of power generation capacity installed or in backlog, FuelCell Energy is a global leader in providing ultra-clean baseload distributed generation to utilities, industrial operations, universities, municipal water treatment facilities, government installations and other customers around the world.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.