Danbury alternative-power equipment maker FuelCell Energy, Inc. has inked a tentative deal with a Spanish energy provider on Monday to sell biofuel-powered generators to commercial markets in Latin America and Europe.
The deal between FuelCell and Abengoa S.A. — which has $7.8 billion in annual revenues, according to its Web site – leverages Abengoa’s expertise developing biofuels with the FuelCell’s Direct FuelCell technology to sell power generators in markets valuing emission-free electricity.
“It is a really solid, well-recognized company with a lot of reach,” said Kurt Goddard, FuelCell vice president of investor relations. “It helps to validate the company, and it helps to validate the technology.”
Brazil is a prime example of such a target markets, where sugar cane is widely used to create ethanol.
A formal distribution agreement between the two companies is expected to be signed within six months.
Financial terms of the deal, announced within hours of FuelCell’s scheduled release of fourth-quarter results, were not disclosed.
The pilot installation will be a 300-kilowatt fuel cell at the Abengoa headquarters in Palmas Altas, Spain, using a FuelCell module and Abengoa plant design and manufacturing.
FuelCell said the Abengoa deal announced Monday expands its reach further by allowing the company to attract customers such as municipalities, large industrial power users and biogas facilities in Europe and Latin America. The focus is on customers who want clean distributed generation.
Distributed generation involves very small power plants operating adjacent to the facility using the power, and can be any kind of power producer such as a diesel generation, solar panels or fuel cells.
Whole Foods Market in Glastonbury, for instance, uses a distributed generation fuel cell to power about half of its store.
Fuel cells are one of the cleaner forms of distributed generation, since they use an electrochemical reaction to produce electricity and not combustion, so there are very few pollutants, even when using a fossil fuel such as natural gas. FuelCell’s products also recover the waste heat generated by this process to make its power production more efficient.
