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FCEL's Microgrids Strengthen Power Reliability and Resilience

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Key Takeaways

  • FCEL microgrids can island from a disrupted grid and keep supplying electricity to critical operations.
  • FCEL's 2.2-MW Woodbridge microgrid can power seven critical town facilities during grid outages.
  • FuelCell Energy and Siemens plan systems combining fuel cells, batteries, controls and electrical equipment.

FuelCell Energy’s (FCEL - Free Report) microgrid application is designed to keep essential operations running when the wider power grid is disrupted. During normal conditions, an FCEL fuel cell plant can supply electricity while remaining connected to the grid. If a disturbance occurs, the system can separate, or “island,” from the grid and continue supplying power locally. Since fuel cells can operate continuously as long as fuel is available, they can provide the steady generation needed to support hospitals, public facilities, data centers and other operations where outages can be costly.

FuelCell Energy’s 2.2-megawatt microgrid in Woodbridge, CT, shows how the technology works in practice. The system provides electricity to a local high school and nearby buildings during normal operation. If the grid goes down, the microgrid can continue powering seven critical town facilities. It also supplies heat to the high school, allowing the project to use combined heat and power. By producing electricity while capturing usable heat, the system can improve overall energy efficiency and make better use of the fuel consumed.

The next step for FCEL’s microgrid application is broader integration with other power technologies. FuelCell Energy and Siemens plan to develop systems combining fuel cells, battery storage, microgrid controls and electrical equipment. In this setup, fuel cells would provide the continuous on-site power, while batteries could respond quickly to sudden changes in electricity demand and help keep the microgrid stable. This approach would make FCEL’s microgrids particularly useful for demanding facilities that require both dependable baseload electricity and flexibility during rapid shifts in power consumption.

Since microgrids are gaining importance in providing reliable and flexible onsite power, several companies are expanding their presence in this market. Bloom Energy (BE - Free Report) and Eaton (ETN - Free Report) are two notable players advancing microgrid solutions for businesses and institutions.

Microgrid Solutions Gain Momentum

Bloom Energy is advancing microgrids as a way to provide reliable onsite electricity when grid power is unavailable or delayed. Bloom Energy’s AlwaysON Microgrid is designed to keep supplying power during grid outages, while the company is also deploying fuel-cell systems for an islanded microgrid at MiTAC Computing’s Fremont manufacturing site. This approach can help manufacturers protect production, add capacity faster and reduce dependence on utility expansion timelines.

Meanwhile, Eaton is expanding its microgrid business by offering systems that improve power reliability, lower energy costs and support cleaner electricity. Eaton can design microgrids around customer needs and also offers project financing, helping reduce upfront investment requirements. Eaton’s solutions can combine controllers, energy storage, fuel cells and grid connections, while federal incentives may improve project economics. The company also provides consulting, design and electrical equipment needed to build and operate microgrids.

The Zacks Rundown on FCEL

Shares of FuelCell Energy have gained 130% over the past six months.

Zacks Investment Research Image Source: Zacks Investment Research

FCEL currently has an average brokerage recommendation (ABR) of 2.33 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by nine brokerage firms.

Zacks Investment Research Image Source: Zacks Investment Research

The chart below shows FCEL’s earnings over the past four quarters.

Zacks Investment Research Image Source: Zacks Investment Research

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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