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FuelCell Energy to Supply Renewable Power to Californian Grid

FuelCell Energy, Inc.  FCEL announced the conclusion of a digester gas purchase agreement and site lease with the City of Tulare, CA. Under the terms of the purchase agreement, the company will install, operate and maintain a fuel cell power plant operating on Tulare’s biogas waste water treatment facility.

Details of the Agreement

The amount of renewable biogas agreed to be purchased will be sufficient to run a 2.8 megawatt (MW) SureSource 3000 fuel cell power plant. This will result in a negative carbon footprint which will aid in nullifying harmful emissions from other forms of power generations.

Further, this digester gas agreement will provide opportunity for FuelCell Energy to proceed under the State of California Bioenergy Market Adjustment Tariff (BioMAT) program for the execution of a 20 year power purchase agreement (PPA) with the electric utility SCE to supply the power generated from fuel cells to the California electric grid.

Other Projects

FuelCell Energy is taking significant steps towards developing and adding new projects to in pipeline. The company looks well equipped with purchase agreements (PPA) that generate monthly revenue. As of Jan 31, 2017, FuelCell Energy’s long-term project consist of five projects totaling 11.2 MW and additional investments for two previously announced 6.5 MW projects that are currently under construction.

Along with its current development of a portfolio of fuel cell park projects,  the company is also progressing with a 3.7 MW project construction in Danbury, CT for fuel cell configuration that will expand the company’s opportunities over a broad range of markets and applications.

Price Movement

In the last one year, FCEL has underperformed the Zacks categorized Alternative Energy- Other industry. The company’s shares declined 78.9% against the industry’s gain of 8.9%.

The underperformance can primarily be attributed to the stiff competition that FuelCell Energy is facing as being the only domestic company manufacturing and commercializing carbonate fuel cells, as opposed to new entrants that are developing alternative fuel cell technologies such as PEM stationary fuel cells, phosphoric acid fuel cells and solid oxide fuel cells, apart from other international gas turbine companies.

Sector Picks

FuelCell Energy currently carries a Zacks Rank #3 (Hold).

Better-ranked players from the Oils-Energy space include Pembina Pipeline Corp. PBA, SolarEdge Technologies, Inc. SEDG and Delek US Holdings, Inc. DK. All the three companies sport a Zacks Rank #1 (Strong-Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Pembina Pipeline delivered an average surprise of 0.23% in the trailing four quarters. Its 2017 estimates have risen by 2.86% to $1.44 per share in the last 30 days.

SolarEdge Technologies delivered an average surprise of 13.34% in the trailing four quarters. Its 2017 estimates have risen by 14.43% to $1.11 per share in the last 90 days.

Delek US delivered an average surprise of 60.68% in the trailing four quarters. Its 2017 estimates have risen by 5.26% to 20 cents per share in the last 30 days.

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