The Babcock & Wilcox Company (BWC) – through its affiliate Babcock & Wilcox Power Generation Group Inc. – entered into an agreement with FutureGen Industrial Alliance to begin work on the U.S. Department of Energy’s FutureGen 2.0 carbon capture and storage (:CCS) project. The agreement is for initial engineering and preparation for full front-end engineering and design work of the CCS project.
The whole project is valued at $1.65 billion and the estimated value of the engineering and design work is $130 million.
Per the deal, B&W will design the near-zero emissions plant’s oxy-coal combustion system, air quality control systems, boiler, steel and other control systems.
The deal authorizes B&W and FutureGen Industrial Alliance to start Phase II-A of the project for the 167 megawatt power plant in Meredosia, Ill.
The primary aim of the FutureGen 2.0 project is to improve an existing power plant located in Meredosia with B&W’s oxy-coal combustion process. This will separate and capture more than 90% of the carbon dioxide (CO2) generated during the combustion process.
Headquartered in Charlotte, N.C, Babcock & Wilcox is engaged in providing clean energy technology and services for the nuclear, fossil and renewable power markets worldwide. The company – which was spun off as a separate, independent and publicly traded entity from energy-focused engineering and construction firm McDermott International (MDR) in Aug 2010 – operates in four business units: Power Generation, Nuclear Operations, Technical Services and Nuclear Energy.
B&W currently carries a Zacks Rank #2 (Buy), implying that it is expected to outperform the broader U.S. equity market over the next 1 to 3 months.
In addition to B&W, there are other engineering firms in the energy sector like Altra Holdings Inc. (AIMC) and EnPro Industries Inc. (NPO) that offer value and are worth considering. Both these stocks sport a Zacks Rank #1 (Strong Buy).
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