The two systems were installed at power plants with cyclone boilers burning Powder River Basin (PRB) coal from Wyoming.
The company said that its patented technology is designed to improve combustion of PRB coal in slagging boilers resulting in efficiency and reduced emissions. While burning CCS’s Refined Coal, tests were conducted using protocols provided in the interim guidance notice issued by the IRS on December 7, 2009.
These tests demonstrated that the Refined Coal that was produced meets the requirements for the tax credits by reducing emissions of nitrogen oxide( NOx) by greater than 20% and reducing mercury emissions by greater than 40%. Based upon these results, the company believes that CCS’s Refined Coal will qualify for the approximately $6.2 per ton tax credit, which is available for the next ten years.
Each CyClean system will produce Refined Coal for two different power generating boilers located at each host site. ADA-ES expects that the two facilities together will produce sufficient coal to support roughly 1,700MW of base load power. CCS plans to convert the majority of the $6.2 per ton tax credits to revenues through a third party monetizer.
These installations trigger up to $4m in payments by NexGen to ADA-ES for NexGen to maintain its 50% ownership of CCS, likely to be paid out of CCS’s cash distributions. The company said that the power plants that purchase the Refined Coal are expected to receive economic benefits resulting from the use of the technology in addition to increased fuel flexibility, decreased operating costs, and decreased emissions of NOx and mercury. CCS is working to finalize contracts with the host utility and with the monetizer.
Mike Durham, president and CEO of ADA-ES said: ”We are very excited to get these systems up and running this year. They are expected to produce significant cash flows for the Company beginning early in 2010 and lasting for up to ten years.
“Due to the lateness of the published IRS guidance, we are also working with Congressional delegations to obtain an extension of the placed-in-service deadline for another year so that we can grow this business further in 2010.”
