Source: ADA-ES, Inc.
ADA-ES, Inc. (NASDAQ: ADES) has provides an update on the progress of activities at Clean Coal Solutions, LLC (Clean Coal), the Company’s joint venture with an affiliate of NexGen Resources Corporation and an affiliate of The Goldman Sachs Group, Inc. Clean Coal’s patented coal technology, CyClean, is a cost effective coal technology used to produce Refined Coal (RC), which reduces emissions of NOx and mercury, and qualifies for IRS Section 45 tax credits of over $6.33 per ton of coal.
ADA reported that in June 2011, Clean Coal completed the first year of operation of two facilities that produce RC for four boilers at two coal-fired power plants in the Midwest. In their first year of operation, the two new facilities generated approximately $20 million in revenue and about $9 million in operating income for ADA. Over the next nine years, these facilities are expected to generate between $8 and $9 million in annual operating income for ADA.
The Company also announced that in June 2011, Clean Coal installed the first of 16 planned new facilities at a plant that is expected to burn up to four million tons of RC each year. This new facility was operated for the period of time deemed necessary to meet IRS “placed-in-service” requirements, and when burned, the RC produced demonstrated the reductions in mercury and NOx emissions necessary to qualify for the tax credit. The next four facilities are scheduled to be installed in July and August at plants burning an aggregate of approximately 10 million tons of coal per year. Following the completion of the facility demonstrations, operating permits and contracts between the utilities and the financial institution monetizing the tax credits will need to be finalized prior to commencing full-time operations, which are expected to occur late in the third quarter and in the fourth quarter of this year.
Clean Coal expects to install and commence operating the remaining 11 planned RC facilities in the fall, and is establishing schedules with customers in support of that goal. Clean Coal is financing the construction and installation of the 16 new RC facilities with a $10 million line of credit established with a commercial bank. Additional cash should also be available from expected payments of “pre-paid rent” from the monetizer on each facility as it achieves milestones of placed-in-service and full-time operation.
Dr. Michael D. Durham, President and CEO of ADA, commented, “Following Congressional approval in December 2010 that extended by one year the period in which companies may build and install RC facilities, ADA has committed to fabricate and hopes to place-in-service 16 new RC facilities by the end of 2011. Each of these facilities is capable of producing one to five million tons of RC per year, which will result in significant reductions in harmful emissions and material financial benefits for those who utilize the technology. We are very pleased with the progress we are making with regards to this expansion, and look forward to further applications of this proven technology.”
ADA-ES updates progress of Clean Coal Solutions joint venture
Source: ADA-ES, Inc.