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Midwest Energy Emissions (MEEC) Receives $1 Million Order for New Injection System

03/08/2017
By Steven Ralston, CFA

OTC:MEEC

Yesterday, Midwest Energy Emissions (OTC:MEEC) announced that the company has secured an order for a $1 million injection system for a redundant long-term application by an owner of a fleet of EGUs. Management is confident that the installation will lead to additional opportunities throughout this customer's fleet.

In addition, management reiterated full year 2017 revenue guidance of between $60 million and $70 million. Last month, the company had provided preliminary revenue results for the fourth quarter and full year ending December 31, 2016. Fourth quarter revenues should increase at least 29% to over $7.8 million, and full year revenues are expected to increase at least 156% to over $32.3 million.

Management also provided a Corporate Update.  The company has a robust pipeline with over 20 prospective EGUs in various stages of testing, demonstration and contract negotiation. Management indicated that the company has not experienced any slowdown in the testing at EGUs. In addition, testing is scheduled at two Canadian EGUs in the near future.

Midwest Energy Emissions has demonstrating a technical competitive advantage by bringing EGUs to MATS compliance in a cost-effective manner. As many coal-fired utilities are having difficulties, ranging from encountering prohibitive costs in achieving a 90% reduction in mercury emissions to having to de-rate (lower the capacity of) boilers to attain compliance, management is focused on further penetrating the fleets of existing customers as well as securing new clients (electric utilities) which are challenged and are seeking an economical solution to comply with MATS. Management is targeting approximately 150 EGU boilers that are encountering significant balance-of-plant issues.

Midwest Energy Emissions provides a 
process that can be fine-tuned to achieve optimum efficiency, by tweaking not only the location and method of injection of products, but especially the blend and reactivity of sorbents. The company’s solution for 90%+ mercury emissions reduction is a two-step process that can be fine-tuned to the unique configuration of the customer’s EGU and the coal type being combusted. The first step involves the introduction of flue gas conditioning products that promote the conversion of elemental mercury to oxidized mercury and particulate-bound mercury, which are more easily captured in downstream devices.

The second step is the back-end injection system, which is located up-stream (prior) to the particulate matter (PM) equipment, principally bag-house and electrostatic precipitator. Midwest Energy offers a variety of products for introduction into the mercury-contaminated flue gas stream. The fine sorbent particles of the sorbent are injected through a flue gas duct, where the now more reactive, oxidized mercury contacts the sorbent and attaches to its surface so it can be collected. The pregnant sorbent is removed from the flue gas stream, along with the fly ash, in the bag-house or electrostatic precipitator.

The SEA Technology process has been proven to be effective over a broad range of coal types and configurations of coal-fired power plants. Midwest Energy provides an approach that optimizes the mercury capture process while minimizing the cost of injected sorbents.

The EIA reported that coal consumption by domestic utilities rose to 64,883 thousand tons in December, which is the highest level at the end of the year since 2009. Though this is being attributed to a late-year surge in natural gas prices, it may be a precursor of President Trump’s positive stance on coal.

Midwest Energy Emissions is scheduled to present at the 29th Annual ROTH Capital Partners Conference being held from March 12th through the 15th at the Ritz-Carlton Laguna Niguel in Dana Point, California.

We continue to be optimistic about Midwest Energy Emissions. The company should experience significant increases in revenue over the next few years as the coal-fired plants adjust their mercury emissions control efforts in order to optimally comply with MATS. Our target remains $2.00 per share.

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