FuelCell Energy has entered into a $37 million deal to acquire Dominion Energy’s 14.9-MW fuel cell project in Bridgeport, Connecticut, a project it developed and built, and has operated since it began operations in December 2013.
The project, one of the largest of its kind in the world, is powered by five Direct FuelCell stationary fuel cell power plants and an organic rankine turbine that converts heat from the fuel cells into additional electricity. Power from the plant is sold to Connecticut Light & Power under fixed power purchase agreements.
FuelCell said on November 5 that the transaction to acquire 100% of equity interest in Dominion Bridgeport Fuel Cell LLC, the owner of the 14.9 MW project, resulted from a competitive bid process. The transaction is expected to add revenue of more than $15 million per year to FuelCell’s financials and nearly doubles the Danbury, Connecticut–based company’s generation portfolio to 26.1 MW. The company’s long-term generation portfolio goal is 60 MW.
According to FuelCell President and CEO Chip Bottone, the company is “uniquely positioned to acquire and benefit” from the established project, which it began building in 2012 with Dominion’s backing. The acquisition, he said, is part of a strategy to retain its generation assets and “benefit from their financial profile of consistent revenues, operating profits and cash generation.” Bottone added: “Lastly, I would like to acknowledge the continued support of the Connecticut Green Bank who supported us five years ago in the construction of this project, and is playing a key role in financing this acquisition.”
Financed by a Green Bank
The Connecticut Green Bank, which was established by the state’s general assembly in July 2011, says it is the “nation’s first green bank.” The entity evolved from the Connecticut Clean Energy Fund and the Clean Energy Finance and Investment Authority, state agencies that spearheaded the government’s subsidy-driven approach to encourage more uptake of clean energy. The “green bank” model is an effort to move away from subsidies. The Connecticut Green Bank says it works with private-sector investors to create “low-cost, long-term sustainable financing” to maximize the use of public funds.
“The model works,” it says. “We are deploying more clean energy more quickly and efficiently than ever. Since its inception, the Connecticut Green Bank and its private investment partners have deployed over a $1 billion in capital for clean energy projects across the state.”
In a statement on November 5, Bryan Garcia, president and CEO of the Connecticut Green Bank, said that FuelCell’s Bridgeport acquisition was important because it uses a technology manufactured in its state. The project, located on a remediated brownfield in an industrial zone, “is helping our largest city with economic development through private investment in green energy,” he said.
Dominion Embarks on Clean Energy Drive
The deal, expected to close on or before December 31, marks another divestment by Dominion Energy.
The company recently announced agreements to sell three merchant plants—a total 1.8 GW—to generate $1.3 billion in cash in an effort to “reduce parent-level debt.” These include the Fairless combined cycle gas turbine (CCGT) project in Pennsylvania, the Manchester CCGT in Rhode Island, and the Catalyst hydro plant in Louisiana. “Given our increased strategic focus on regulated energy infrastructure, these assets have become increasingly non-core,” said Dominion Chief Financial Officer James Chapman as the company announced its 2018 third-quarter results on November 1.
Earlier this week, Dominion also said it has executed a definitive agreement to divest its 50% interest in the Blue Racer Midstream joint venture, a company that provides Utica Shale gas for midstream services to First Reserve, a private equity investment firm. The company is meanwhile pushing ahead with an effort to merge with SCANA Corp., a company it offered to buy after it abandoned construction of two AP1000 units in South Carolina. North Carolina regulators are expected to approve the deal by December, but in South Carolina, hearings on a number of related matters continue, and Dominion recently submitted an alternative customer benefit plan as an option for the Public Service Commission to consider. Dominion, however, is “optimistic” that the merger will close late this year.
On November 2, meanwhile, Dominion said it is swiftly moving toward its renewable energy goal of having 3 GW of renewables in operation or under development by 2022. The company is seeking bids for up to 500 MW of solar and onshore wind, and requesting approval for 240 MW of solar generation. At the same time, it’s continuing an effort to build two 6-MW wind turbines off the coast of Virginia Beach, and is planning a request for proposals for up to 50 MW of smaller-scale solar projects in 2019.
—Sonal Patel is a POWER associate editor (@sonalcpatel, @POWERmagazine)