FuelCell Energy Inc. (FCE, Danbury, CT) and Enbridge Inc. have signed a deal for a new ultra-clean hybrid power unit designed for natural gas pipelines in Canada and the United States. The Direct FuelCell® (DFC®) Energy Recovery Generation power unit provides heat to prevent freezing that can result from pressure reduction, used for local delivery of natural gas, eliminating the combustion-based system that is normally used. The new system is a way to recover more energy from pipeline operations.
The two companies are planning a demonstration as part of the commercialization program for the unit, sized from 1 MW to 10 MW, but are still working on location plans. Enbridge said it has identified the potential for more than 40 MW of DFC-ERG power plants in Ontario, which will be one of the initial target markets, along with California, Connecticut, Hawaii, Maine, New York and Pennsylvania. In connection with the project, FuelCell has granted Enbridge warrants to buy up to one million shares of FuelCell stock, with order commitments of 40 MW of DFC products, including the first DFC-ERG power plant. The exercise prices of the warrants range from $9.89 to $11.87, and they expire in June 2010. A previous warrant agreement between the two companies has been cancelled.
