CUI Global Inc (NASDAQ:CUI) announced Thursday that its wholly-owned energy subsidiary, Orbital Gas Systems Ltd, received the third of three purchase orders from a major European industrial company for the production of biomethane-to-grid terminals.
The $1.7 million contract awarded in May this year calls for the production of three biomethane-to-grid terminals. The deal, which also includes Orbital’s GasPT analyzer, follows the recent passage of a favorable UK government initiative under which tariff rates for biomethane generation have been increased.
In May, the UK introduced its program to encourage the uptake of renewable heat called the Domestic and Non-Domestic Renewable Heat Incentive (RHI) scheme. This government scheme makes biomethane generation a more attractive proposition as it encourages energy efficiency to meet the UK's 2020 renewable energy target.
Following the passage of that RHI scheme the UK has seen a dramatic expansion in the number of planned biomethane-to-grid facilities. The company said it had 27 active, outstanding bids for such projects across the UK.
"Our ability to offer the unique GasPT Technology and a turnkey solution that engineers our energy products into our integration solutions is a substantial competitive advantage in the marketplace, and one that enables us to deliver significant value for the customer and the growing market for biomethane," said Orbital UK president Paul D White.
A huge amount of industry interest in biomethane has also been sparked by Orbital UK’s unique GasPT Technology receiving regulatory board approval from the UK’s energy regulator, the Office of Gas and Electricity markets (Ofgem) this month.
Orbital’s GasPT platform, which allows for better gas analysis, creates a revolutionary method to almost instantly and accurately determine the quality of natural gas. It also received certification from the UK Environmental Protection Agency under the European Union Emissions Trading System.
"This most recent award and additional biomethane projects anticipated as a result of the UK's RHI incentives underscores the changing regulatory and CAPEX environments in the UK that serves as a tailwind for our energy business and a roadmap for future demand across Western Europe,” CUI Global CEO William Clough said in a statement.
“With the significant number of bids we have outstanding for proposed biomethane-to-grid projects in the UK, the recent certifications of our GasPT by Ofgem and the EU ETS and Orbital's world-class engineering capabilities, we are on the path to greater energy revenues," he added.
CUI Global’s shares traded flat at $1.98 in premarket trade.