Capstone Green Energy Corp. announced on Monday it had received a two-year rental agreement for a C800 microturbine from a cryptocurrency data mining operation in West Texas.
The contract was secured by Lone Star Power Solution, the exclusive distributor in Texas, Arizona and the Gulf States for the Van Nuys-based manufacturer. The microturbine is expected to be operating by the middle of the month.
The customer is currently evaluating an additional 1-megawatt system to be deployed early next year, according to a release from Capstone.
Darren Jamison, the chief executive of the microturbine and green energy products manufacturer, said that Capstone continues to expand its Energy-as-a-Service business, including its long-term rental program, which is an important element in reaching profitability as rentals generate higher margins than product sales.
The company is seeing demand from emerging and rapidly growing industries with intensive energy needs like cryptocurrency mining operations which affirms the attractiveness of Capstone’s Energy-as-a-Service approach and the growing size of its addressable market, Jamison said.
“With this latest contract, the Capstone microturbine rental fleet now stands at approximately 40 megawatts, with a goal of expanding to 50 megawatts by March 31,” Jamison added in a statement.
Located on an oil and gas well, the customer approached Lone Star looking for an innovative way to monetize their existing on-site production gas, a byproduct that would otherwise go to waste to support on-site cryptocurrency mining, the Capstone release said.
The C800 microturbine rental was chosen to replace an aging reciprocating engine that was unreliable due to the site’s gas composition and extreme environmental conditions, the release added.
Shares in Capstone (CGRN) closed down 11 cents, or more than 6%, to $1.67 on the Nasdaq, on a day when that market closed down nearly 2%.