Sierra Nevada Brewing buys fuel cell power plants

FuelCell Energy (NasdaqNM: FCEL), a maker of fuel cell-based electric power generation plants, today announced that Sierra Nevada Brewing Co. is purchasing four of its 250-kilowatt power plants that have been providing electricity and heat to the brewery’s production processes during initial operations through a power purchase agreement (PPA).

On December 15th, Sierra Nevada is to assume ownership of the power plants, which provide a significant percentage of the brewery’s daily electric requirements. The company says it's motivated by having greater control over its energy costs while honoring a commitment to environmental sustainability by operating a green facility.

Earlier this fall, FuelCell Energy completed an upgrade of these power plants - making it possible for Sierra Nevada to use fuel created from the waste by-product of its brewing process, reducing the company's fuel costs by 25-40 percent.

“I am convinced that this technology is a great fit to help us meet our energy independence and sustainability goals,” said Ken Grossman, Sierra Nevada’s founder. “FuelCell Energy’s plants and service teams are meeting all my expectations and purchasing the power plants outright is the next logical step to secure our energy reliability and reduce costs.”

The U.S. Energy Policy Act of 2005 establishes a financial incentive for Sierra Nevada’s acquisition by providing a 30 percent Investment Tax Credit (ITC) - up to $1000 for each kilowatt - for the purchase of fuel cell power plants. FuelCell Energy estimates this tax credit will translate to a savings of approximately 1.5-2.0 cents per kilowatt-hour (kWh) for Sierra Nevada.

“The financial benefits from the ITC and accelerated depreciation are added benefits that should continue to increase our DFC sales going forward,” said R. Daniel Brdar, President and CEO of FuelCell Energy. “Leading edge companies that want ultra-clean, efficient power, can substantially reduce their capital costs with these programs.”

DFC power plants address significant energy issues in California - high energy costs, strict air quality standards and greenhouse gas emissions. The high efficiency of DFC power plants not only results in less fuel needed per kilowatt hour of electricity and lower operating costs, but reduced amounts of carbon dioxide as well. In addition, DFC power plants provide greater energy reliability and energy security because they are located directly at customer sites, like Sierra Nevada.

A 2005 study by Energy Insights Inc. determined California represents a nearly 1,000 MW opportunity for locations addressable by on-site, ultra-clean power delivered by FuelCell Energy’s DFC power plants. The state continues to be a strong supporter of fuel cell technology by providing financial and regulatory support. In addition, because DFC power plants meet the California Air Resources Board (CARB) stringent emissions requirements for 2007 standards, their permitting process is streamlined and they qualify for preferential rate treatment by the California Public Utilities Commission (CPUC).

Emerging state, federal and international regulations to reduce harmful greenhouse gas emissions consider fuel cell power plants in the same environmentally friendly category as wind and solar energy sources - with the added advantages of running 24 hours a day and the capacity to be installed where wind turbines or solar panels often cannot.

FuelCell Energy services over 50 power plant sites around the globe that have generated more than 140 million kilowatt hours.