Industrial and municipal wastewater treatment facilities with anaerobic gas digesters are an untapped power source for hospitals, schools, universities, hotels and other commercial and industrial facilities. The methane generated from the anaerobic gas digestion process is used as fuel for Direct FuelCells (DFC).

"Direct FuelCells are like large, continuously operating batteries that generate electricity as long as fuel, such as natural gas, is supplied. Since the fuel is not burned, there is no pollution commonly associated with the combustion of fossil fuels...This high-efficiency technology generates more electric power from less fuel and with less carbon dioxide emissions than traditional methods using combustion."

A 500 kW fuel cell project will be installed at Santa Barbara's El Estero Wastewater Treatment Plant. It will harness methane gas from the anaerobic digesters as the fuel source. FuelCell Energy, Inc., and Alliance Power have formed a joint venture to sell electric power and heat to the facility under a long-term power purchase agreement - the first of its kind for FuelCell Energy.

Alliance Power is the turnkey provider to the project and FuelCell Energy will provide the DFC power plants and operations and maintenance services. The 650-degree Fahrenheit exhaust from the power plants will be used to supplement heating of the anaerobic digesters that create the methane gas for use by the fuel cells. The power plants are expected to be delivered and operational in the fourth quarter of 2004.

In a market study conducted in 1998, over 550 municipal wastewater treatment facilities in the U.S. were identified to be capable of producing enough methane from anaerobic gas digestion to fuel a 250-kilowatt or larger Direct FuelCells power plant.