SPG Awarded Significant Contract to Provide Energy-Efficient CHP Solution for Union Beverage Packers

Rhea-AI Summary

SPG: Signal Power Group Awarded $10M CHP Contract with UBP in New Jersey, Set to Reduce Carbon Footprint and Generate Cost Savings. The CHP system, powered by SPG 4 turbine engine, will deliver 3.5MW of carbon-reducing power generation fueled with natural gas and capture heat to produce steam. Expected to be operational in mid-2024, supported by a ten-year long-term service agreement.

Positive

• The CHP contract valued at over $10,000,000 with UBP is a significant achievement for Signal Power Group, showcasing continued growth and innovation.
• The CHP system is set to reduce carbon footprint and generate substantial cost savings for UBP, aligning with the company's vision of sustainability and environmental consciousness.
• The system qualifies as green energy under the Biden administration’s Inflation Reduction Act, making it eligible for valuable tax credits and other financial advantages, which can potentially attract more customers and investors.
• The partnership with Honeywell International, Inc. and the support from the New Jersey Clean Energy Program further solidify the project's potential for success.

Negative

• None.

BROOKSHIRE, Texas--(BUSINESS WIRE)-- Signal Power Group (“Signal Power" or “SPG”) announced today that the company has been awarded a significant combined heat & power (“CHP”) contract valued at over $10,000,000 with Union Beverage Packers, LLC (“UBP”). Under the terms of the agreement, Signal Power will procure, assemble, commission, and maintain the complete 3.5MW CHP system for a UBP facility in the state of New Jersey. This system will be powered by the SPG 4 turbine engine under Signal Power’s license with Honeywell International, Inc. The CHP system will deliver 3.5MW of carbon-reducing power generation fueled with natural gas and simultaneously will capture the heat from the turbine engine to produce steam required to meet UBP’s beverage plant needs. The system is expected to be commissioned and operational in mid-2024 and will be supported by a ten-year long-term service agreement provided by SPG to ensure a seamless solution.

“This is the first of many CHP solutions that we (SPG) expect to deploy over the next three years as our commercial and industrial customers look to transition from legacy diesel-fired equipment or grid-provided power to more efficient and cleaner distributed generation systems. Under the Biden administration’s Inflation Reduction Act, this type of power plant qualifies as green energy which is eligible for certain valuable tax credits and other financial advantages. Signal Power and its partner Honeywell are aligned on accelerating the transition to environmentally-friendly fuel sources, including renewable natural gas and hydrogen blended fuels that will provide our customers lower-cost alternatives and reduce their carbon footprint with a clean source of power,” said Rob Marchitello, Chief Executive Officer of SPG.

“We are thrilled to introduce this revolutionary CHP solution that aligns with our vision of sustainability and environmental consciousness. By adopting this cutting-edge technology, we expect to not only significantly reduce our carbon footprint but also generate substantial cost savings. Thanks to the support and excellent information provided by the New Jersey Clean Energy Program, we are confident that our investment will pay off in as little as 24 months,” said Yaron Gohar, CEO of UBP.

“We are excited to see SPG's continued growth with its newest CHP project that utilizes the company’s differentiated turbine engine technology and leverages management expertise developed over decades. We look forward to continuing our support of Signal Power in this important work towards a more energy-efficient future,” said John Moon, head of Morgan Stanley Energy Partners.

SPG continues to serve its energy service, industrial and marine customers with a complete portfolio of solutions, including a patented controls technology and a proprietary multispeed gearbox delivering a range of speeds engineered for specific customer applications. SPG provides a wide range of service plans that include performance monitoring and predictive maintenance, further reducing downtime and costs.

About SPG

SPG is a leading provider of sustainable energy solutions, and related services for the global industrial, energy and marine markets. SPG’s product offerings include turbine drive trains and related solutions for electric power generation, including microgrids, datacenters, combined heat and power and mobile power solutions, natural resources applications and the marine end markets. SPG is a portfolio company of Morgan Stanley Energy Partners.

About Morgan Stanley Energy Partners

Morgan Stanley Energy Partners, the energy-focused private equity business of Morgan Stanley Investment Management, is a leading energy private equity platform that makes privately negotiated equity and equity-related investments in energy companies located primarily in North America. Morgan Stanley Energy Partners pursues a differentiated investment strategy, focused on the buyout and build-up of strategically attractive, established energy businesses across the energy value chain in partnership with world-class management teams. For further information about Morgan Stanley Energy Partners, please visit www.morganstanley.com/im/energypartners.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230802508168/en/

SPG Contact:

J Chris Boswell, Chief Commercial Officer

investorrelations@signalpwr.com

Phone: +1 888-SPG-POWR



Morgan Stanley Energy Partners Contact:

Alyson Barnes, Executive Director

alyson.barnes@morganstanley.com

Phone: +1 646 536-1733

Source: Morgan Stanley Energy Partners

FAQ

What is the value of the CHP contract awarded to Signal Power Group by UBP?

The CHP contract is valued at over $10,000,000.

What is the expected power generation capacity of the CHP system?

The CHP system will deliver 3.5MW of carbon-reducing power generation.

When is the CHP system expected to be operational?

The CHP system is expected to be commissioned and operational in mid-2024.

What type of energy source will fuel the CHP system?

The CHP system will be fueled with natural gas and will also capture heat to produce steam.

What financial advantages does the CHP system qualify for?

The CHP system qualifies for certain valuable tax credits and other financial advantages under the Biden administration’s Inflation Reduction Act.