Exxon Mobil Corp. is paying $ 10 million to an almost-insolvent company for technology to capture emissions from power plants more efficiently.
The agreement comes at a crucial time for FuelCell Energy Inc., which has seen its market value drop from $ 1.5 billion in 2000 to $ 6.1 million yesterday, when it warned that it may not be able to continue operating due to liquidity problems. FuelCell increased to 111% after announcing the agreement. But it may not be enough to keep the company, who’s in more than 100 million dollars in debt.
“They are in a difficult situation,” says Craig Irwin, senior research analyst at Roth Capital Partners LLC, which buys and sells FuelCell shares. “I’d love to see them pull a rabbit out of the hat here, but that’s what we need: a giant rabbit.”
Exxon has been working with the company based in Danbury, Connecticut, since 2016 in carbonate fuel cell technology that captures carbon dioxide while allowing a power plant to generate more electricity. Other carbon capture devices generally consume energy from the plant to power its operation.
Exxon did not immediately respond to a request for comment.
Pioneer of fuel cells
FuelCell told investors on Tuesday it did not record product revenue in its last fiscal quarter. The company will not get all the money from the agreement with Exxon. Instead, US $ 6 million will go directly to Hercules Capital Inc., its main creditor.
Founded in 1969, FuelCell, based in Danbury, Connecticut, pioneered the commercialization of devices that generate electricity through an electrochemical reaction instead of combustion.
While fuel cells produce much less pollution and greenhouse gases than conventional generators-in some cases emitting only water, nonetheless, they have not achieved mass acceptance. Meanwhile, competing alternative energy technologies, such as solar panels, wind turbines and grid-scale batteries, have seen a rapid increase in sales.