Diversified Energy Company PLC (LSE:DEC, NYSE:DEC) has struck a new partnership with FuelCell Energy and TESIAC to develop 360 megawatts of power generation capacity for data centres in Virginia, West Virginia, and Kentucky.
The collaboration will use natural gas and coal mine methane to provide off-grid power, reducing dependence on traditional grid infrastructure in the development of data centres.
It will establish an Acquisition and Development Company (ADC) to deploy fuel cell technology that converts methane into hydrogen and electricity through a combustion-free process. This approach is expected to minimize emissions, streamline air permitting, and accelerate deployment.
“Our natural gas and coal mine methane asset footprint is advantageously positioned in the Appalachian Region to support the power generation needs of data centres directly,” DEC chief financial officer Brad Gray said in a statement.
“The market demand for the type of reliable, quickly dispatchable power that only natural gas can deliver is incredibly strong, and we’re excited about the potential of this partnership to deploy Diversified Energy-produced natural gas and coal mine methane (CMM) and pair it with Fuel Cell’s advanced industrial-scale technology to create an efficient, cost-effective, environmentally sound solution for the next generation power needs of data centers.”
DEC noted that further announcements are expected soon regarding the partnership, specific projects, and development timelines.
In London, analysts at Peel Hunt repeated a 'Buy' recommendation that pitches a price target of 3,000p (current price: 990p).
"We note that this should qualify for environmental and tax credits that have the potential to provide meaningful cash flow, in addition to the economic benefits of gas and power sales," Peel Hunt analyst Sam Wahab said in a note.