The Linde Group, a gases and engineering company, plans to install the four power plants, which will use fuel cells to turn methane gas from the Point Loma Wastewater Treatment Plant near San Diego into electricity.
After the gas is collected and purified, some of it will be used to power the Point Loma plant, while the rest will be trucked to three other undisclosed locations, according to FuelCell's announcement Tuesday. Customers hosting the plants at those locations will buy the electricity for prices set under power-purchase agreements, the Danbury, Conn.-based company said.
FuelCell Energy claims the deal marks the first commercial fuel-cell installations to run on transported renewable fuel. That's notable because a lack of infrastructure for transporting different fuels for fuel cells has been one of the barriers to making the technology mainstream.
Bruce Ludemann, a senior vice president at FuelCell, said the deal opens up new markets for the company.
"Not only will this collaboration lead to a much greater use of biofuels to generate ultra-clean power, but it will also make green energy economical for customers that want to be carbon neutral and contribute to greenhouse-gas reduction worldwide," he said in a written statement.
In a research note, Sanjay Shrestha, a senior analyst at Lazard Capital Markets, called the news a "significant order win" for FuelCell, with more likely to come.
"It expands the company's addressable market beyond just locations with supplies of renewable fuels to customers seeking to utilize renewable fuels," he wrote. "This order is further evidence of success in the California market, and we would look for this trend to continue."
FuelCell shares closed at $9.05 per share Wednesday, up 5.8 percent from an opening price of $8.55 per share Tuesday.