FuelCell Energy Can Keep Utilities From Bleeding Billions

The United States has lowered carbon emissions faster than any other industrialized country mostly by switching from coal-fired steam generators to natural-gas-fired steam generators. For a utility company, these are their money-generating assets that have been purchased for vast sums of money and they have trained electrical engineers to run and maintain them 24 hours a day, every day so everyone can have power.

Utility companies are unique in that the rate they are able to charge residential customers is subject to a very opaque, yet omnipotent residential pricing structure. Given this rate and historical demand data it is not hard for money managers and investors to figure out reasonable rates of return in both the bonds and stocks of these companies. Consumer sentiment on how cleanly the electricity is generated has been driving wind, solar and fuel cell development.

The utility company business model is not designed to adopt these less efficient forms of generation unless it is paid for. Cracks have recently been forming in that business model as industry has been seeking to build and have managed micro-grid electrical supply for 100 percent up-time reliability and cost guarantees. This is vital for communications and hospitals in times of natural disasters and there are many more industrial examples for energy security.

Without a huge change in efficiency or legislative mandate there is no need to adopt a new technology until the old equipment is worn out. Utility companies cannot see the forest through the trees. The efficiency break-through of fossil fuel consumption is not coming from the energy side of the equation but from the material side. FuelCell Energy’s solid oxide cells do produce electricity more efficiently than a steam-fired generator, but the efficiency is driven by the hydrogen that is also produced in the process.

Electric utility companies are not gas companies and do not distribute hydrogen nor does the business model have a means to deal with the far more lucrative material carbon. FuelCell Energy’s molten carbonate fuel cell technology can be used to produce graphene and carbon fiber materials from virtually all current coal and gas-powered electrical generation plants.

Similar to how the value of the carbon being released from the carbon dioxide waste stream of a solid oxide fuel cell can be captured into carbon nanotubes and other carbon-based chemicals, FuelCell Energy’s molten carbonate fuel cell can capture the carbon from any power plant. The sooner utility company CEO’s and their counterpart regulatory boards take advantage of these additional revenue streams the less likely they are to suffer customer erosion to other clean energy sources.

Additionally, for an average-sized, LNG-fired utility plant burning 3,500 tons of fuel per day they can be capturing up to 2,600 tons of carbon into nanotubes worth at least $520,000. That equates to $1.898 billion in a year that any utility can soon be capturing into their local economies instead of letting it blow away. The carbon capture credit from section 45(Q) of the Internal Revenue Code will pay for the fuel cells in the first year.

Making money from carbon comes from making carbon fiber products from the nanotubes which when woven into fibers and glued into objects end up being five times lighter and five times stronger. These composite materials are a natural fit for all things transportation related. The biggest impact a lightweight material can have after air transportation itself is the shipping container.

Older container ships holding 10,000 containers per voyage could save a mind-numbing 70 million pounds in dead weight. That equates to lost expenses in the form of unnecessary fuel consumption and lost shipping fee revenues. Making cargo weigh less will extend the life of the equipment and the roads and bridges upon which they also travel. Banks are more than willing to lend a three times multiple on assets that are lighter, stronger and will not rust. This is easy low hanging fruit for a forward-thinking industrialist.