AKRON, Ohio - Babcock (LON:BAB) & Wilcox Enterprises, Inc. (NYSE: BW), an Ohio-based energy and environmental services provider, has announced a partnership with NorthStar Clean Energy to convert a former coal-fired power plant in Filer City, Michigan, to a Bioenergy with Carbon Capture and Storage (BECCS) facility. The project is set to utilize B&W's proprietary SolveBright™ technology to capture up to 550,000 tons of carbon dioxide (CO2) annually, contributing to the generation of carbon-negative power.
The limited notice to proceed (LNTP) granted by NorthStar Clean Energy allows B&W to commence detailed design and procurement work in anticipation of a full contract expected to be finalized in the fourth quarter of 2024. B&W's scope in the full contract will likely include engineering, design, and delivery of equipment necessary for the plant's conversion to biomass fuel and the integration of carbon capture technology.
Upon completion, the Filer City plant aims to produce power with net-negative greenhouse gas emissions by using sustainable biomass as fuel coupled with the SolveBright process. This initiative aligns with regulatory requirements for significant reduction or elimination of greenhouse gases from coal-fired power generating assets. Fuel-switching with CO2 capture is presented as a solution for these assets to continue delivering economical and reliable baseload energy.
Jimmy Morgan, B&W’s Executive Vice President and Chief Operating Officer, expressed enthusiasm about the collaboration with NorthStar Clean Energy on the project, highlighting the potential for clean energy production while mitigating the environmental impact of greenhouse gas emissions. Brian Hartmann, President of NorthStar Clean Energy, also commented on the project's significance as one of the nation’s first large-scale biomass with carbon capture and sequestration projects, indicating a shift towards decarbonization efforts.
The Filer City plant is jointly owned by Tondu Corp and NorthStar Clean Energy, a subsidiary of CMS Energy Corporation (NYSE:CMS). The partnership and the BECCS project represent steps towards meeting the energy industry's decarbonization goals and addressing climate change concerns.
This information is based on a press release statement from Babcock & Wilcox Enterprises, Inc.
InvestingPro Insights
Babcock & Wilcox Enterprises, Inc. (NYSE: BW) has taken a significant step towards sustainable energy solutions with its BECCS project in collaboration with NorthStar Clean Energy. While the company is positioning itself as a leader in clean energy technologies, it's important for investors to consider the financial health and market performance of B&W when evaluating its prospects. Here are some insights based on real-time data from InvestingPro:
The company's market capitalization stands at a modest $106.48 million, reflecting its position in the market relative to peers. Despite a revenue growth of 9.1% in the last twelve months as of Q1 2024, B&W has been grappling with challenges, as indicated by a negative price-to-earnings (P/E) ratio of -0.48 and an adjusted P/E ratio of -1.13 for the same period. This suggests that the company has been unprofitable over the last year, which aligns with the InvestingPro Tips indicating that analysts do not anticipate the company will be profitable this year.
Investors should also note the high price volatility of B&W's stock, as it has experienced a significant price drop of approximately 78.99% over the past year. The company's stock is currently trading at 17.55% of its 52-week high, with a previous close price of $1.16. This price performance reflects the market's reaction to the company's financial position and outlook.
Among the InvestingPro Tips, it's worth highlighting that B&W operates with a significant debt burden and may struggle with making interest payments on its debt. This is a crucial consideration for investors, given the company's negative return on assets of -22.82% in the last twelve months as of Q1 2024. On a positive note, the company's liquid assets exceed its short-term obligations, which may provide some financial flexibility in the near term.
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