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ABB and Export Development Canada form investment partnership

The $2.9bn fund will focus on strategic investments in technologies and solutions with growth potential, such as green hydrogen, sustainable transport solutions or electrification.

ABB and Export Development Canada (EDC), Canada’s export credit agency, have signed a global partnership to promote investments in sustainable technologies and projects in Canada and around the world.

The support provided by EDC, with a total limit of up to $2.9bn, will provide ABB’s customers with financing and insurance solutions to strategic electrification and automation projects in the sectors of clean technologies, advanced manufacturing, digital technologies, and resources of the future, according to a news release. Commercial financing will be provided on a project-by-project basis and the partnership will initially run for three years.

ABB CFO Timo Ihamuotila said: “I am very pleased about our partnership with EDC and their trust in ABB as a global technology leader in electrification and automation. This partnership enhances our value proposition to customers and is fully in line with our purpose to enable a more sustainable and resource-efficient future. It will offer our customers and us the opportunity to further invest in sustainable technologies and – in doing so – to contribute actively to reaching decarbonization goals in various industries.”

The partnership aims to foster investments globally and locally in Canada both through ABB’s customer projects and within the company’s own operations. EDC will finance and provide insurance to customer projects across the ABB portfolio, from electrification, motion, process automation to robotics and discrete automation.

“EDC is committed to supporting large multinational companies, like ABB, that have strong anchors in Canada and are focused on building an innovative, equitable and sustainable economy,” said Sven List, Senior Vice President, Corporate and International Group, EDC. “Extensive capital is required to transition to more sustainable practices and develop greener products and services. Together we will play an important role in developing Canada’s contribution to global sustainability and address pressing issues like climate change.”

A specific focus will be on strategic investments in technologies and solutions with growth potential, such as green hydrogen production, sustainable transport solutions or the electrification of today’s fossil-based activities to reduce global greenhouse gas emissions. Collaboration with innovative Canadian start-ups is also an essential topic under the umbrella of the partnership with EDC.

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JERA commences ammonia co-firing tests

JERA and IHI will seek to establish technology for the use of fuel ammonia in thermal power generation with a view toward mainstreaming in society by March 2025.

JERA Co. and IHI Corporation today began a demonstration of large-volume fuel ammonia substitution at a commercial coal-fired thermal power plant.

The testing will be carried out at JERA’s Hekinan Thermal Power Station in Hekinan City through June 2024.

Since October 2022, JERA and IHI have been moving forward in constructing the burners, tank, vaporizer, piping, and other facilities necessary for demonstration testing fuel ammonia substitution at JERA’s Hekinan Thermal Power Station.

IHI has developed a test burner based on the results of small-volume testing of fuel ammonia at the power station’s Unit 5, and JERA has prepared safety measures and an operational framework for the use of fuel ammonia at the power station.

With such preparations in place, the demonstration testing of large-volume fuel ammonia substitution began today at the power station’s Unit 4. The demonstration testing will look at characteristics of the plant overall, investigating nitrogen oxide (NOx) emissions and confirming factors such as operability and the impact on boilers and ancillary equipment.

JERA and IHI, by addressing issues raised through the demonstration testing, will seek to establish technology for the use of fuel ammonia in thermal power generation with a view toward mainstreaming in society by March 2025, according to a news release.

Based on the current demonstration testing, JERA will begin commercial operation of large-volume fuel ammonia substitution (20% of heating value) at Unit 4 of JERA’s Hekinan Thermal Power Station. By establishing the technology for ammonia substitution, JERA will offer a clean energy supply platform that combines renewable energy with low-carbon thermal power, contributing to the healthy growth and development of Asia and the world.

In addition to steadily carrying out the current demonstration testing, IHI will apply the knowledges gained through the Project to establish technology for high-ratio combustion of 50% ammonia or more at thermal power plants and to develop burners for 100% ammonia combustion, deploying the results of the demonstration testing to other thermal power plants in Japan and overseas will contribute to global decarbonization through fuel ammonia.

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Enedym and Toyota converting diesel tuggers

Enedym and Toyota Tsusho Canada have formed a strategic partnership to convert diesel tuggers to battery or hydrogen power.

Enedym and Toyota Tsusho Canada have formed a strategic partnership to convert diesel tuggers to battery or hydrogen power, according to a press release.

Enedym will design and develop SRMs and inverters with rated nominal power of approximately 45kW for use in North America and Japan. The magnet-free electric motors will convert small commercial vehicles, or tuggers, commonly used at airports and manufacturing plants, from diesel fuel to battery or hydrogen power.

The collaboration’s first output, an electric-powered commercial tugger, will be piloted at one of Toyota Tsusho’s affiliates located at one of Toyota Motor’s North American manufacturing plants in 2023.

Enedym’s innovative SRM motor technologies remove the need for rare earth metals, thereby reducing costs by approximately 40%.

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Tata Steel to invest 65m euros in Dutch green steel production

Tata Steel Nederland has signed contracts with McDermott, Danieli and Hatch to advance technical preparations for green steel production.

Tata Steel Nederland has signed contracts with three companies – McDermott, Danieli and Hatch – to advance technical preparations for green steel production.

This phase in the project is expected to cost over 65m euros, and will result in an engineering package that forms the basis for final permitting and project planning, according to a press release.

Tata Steel wants to move to green steel manufacturing in a clean environment as fast as possible, with each of the three partner companies bringing their own specific expertise to help Tata shape and deliver hydrogen-based steel manufacturing.

The project is led by the Tata Steel internal project and sustainability team, in close support of the main delivery partners. McDermott is responsible for the construction input and support of the technical project management. Danieli is responsible for the engineering design for the  plant and technology that delivers the Direct Reduced Iron (DRI), the first step in the iron making process. Hatch is the technology licensor  of the electric furnaces (REF) that melt the DRI and help to reduce the oxygen content further thereby improving the final steel quality. The REF and DRI plant are closely coupled to form an integrated production system.

“We recently signed agreements about our future with two ministries and the province of North Holland. In doing so, we have committed to being CO2 neutral before 2045 and emit between 35 to 40% less CO2 before 2030. This will primarily be achieved via the hydrogen route where the blast furnaces are replaced with modern clean steel making technology that uses hydrogen or gas instead of coal,” said Hans van den Berg, CEO of Tata Steel Nederland in a statement.

DRI (direct reduced iron) technology is a relatively new production technology, in which iron ores are directly reduced using natural gas or hydrogen, rather than coal. The reduction of iron ores takes place in a DRI plant in a shaft reactor  at a relatively low temperature of up to about 1000°C. The reduced iron is then further processed into hot metal in an electric furnace (REF). During this step the right amount of carbon is being added to create a very precise and high quality feedstock for our steel plant.

The DRI-REF technology offers several advantages. By using green electricity and a predominant hydrogen stream, the CO2 emissions from the process are much lower than when using blast furnaces. The new process can also accommodate higher percentages of circular steel, where scrap can be added to the REFs or the induction furnaces.

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Exclusive: American Clean Power to advocate for ‘grandfathering’ in 45V rules

The clean energy trade group plans to continue promoting the concept of “grandfathering” for early-mover green hydrogen projects in response to IRS guidance for 45V rules, according to industry sources familiar with the plans.

Clean energy industry trade group American Clean Power (ACP) plans to continue championing the concept of “grandfathering” in the green hydrogen sector, arguing that it is critical for the economic viability of early green hydrogen projects under the Inflation Reduction Act’s clean hydrogen tax credits, according to sources familiar with the group’s plans.

Grandfathering would allow these projects to adhere to less stringent annual time-matching requirements before transitioning to an hourly regime.

ACP, through its previously released Green Hydrogen Framework, has proposed to grandfather in the early-mover projects under annual time-matching as long as they start construction before January 1, 2029. That’s in contrast to guidance for the 45V clean hydrogen tax credit that would require renewable energy generation associated with green hydrogen projects to be matched hourly beginning in 2028.

The trade group, which consists of 800 clean energy companies, previously argued against too-soon hourly matching in a November white paper. Representatives of ACP did not immediately respond to requests for comment.

In response to the IRS guidance, ACP is seeking to underscore that, without grandfathering, early projects will have to be designed from the start to meet hourly matching requirements, significantly increasing costs and negating the benefits of annual time matching, sources said.

The notice of public rulemaking on 45V was issued on December 26, and is open for public comment for 60 days. The tax credit rules, which would require strict adherence to the so-called three pillars approach for incrementality, temporal matching, and deliverability, are viewed by some in the industry as overly burdensome.

ACP’s position is that the project finance market can handle some changes midstream in long-term agreements, but not fundamental shifts like transitioning from annual to hourly time matching. 

This switch could lead to a dramatic decrease in green hydrogen production and a concurrent exponential increase in production costs. Investors, anticipating these risks, might finance green hydrogen production agreements as if they were under an hourly regime from the beginning, thereby eliminating the initial benefits of annual time matching, according to the sources familiar.

A Wood Mackenzie study estimates that hourly time matching requirements could result in a price increase of 68% in Texas and 175% in Arizona, for example.

ACP, according to sources, stresses that the absence of grandfathering would create an economic cliff for agreements straddling both accounting systems. This would add to project costs, potentially discourage customer interest in green hydrogen, and hinder the industry’s maturation, the sources explained. In contrast, grandfathering first-mover projects under an annual time matching regime would ensure competitive production costs, driving demand for green hydrogen, the trade group believes.

Moreover, sources explained that ACP’s position is that the transition from annual to hourly matching without grandfathering would likely necessitate assuming hourly matching from the onset in power purchase agreements, leading to higher hydrogen costs from the start. This could delay green hydrogen industry development and give an advantage to blue hydrogen with early adopters, potentially excluding green hydrogen from the market.

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Exclusive: Former green hydrogen executive raising capital for fusion startup

A former executive that developed large hydrogen and ammonia projects in Texas is raising money in a new role with a fusion energy firm with ambitions to co-locate generation with heavy industry and fuels production.

Tokamak Energy, the UK-based fusion energy startup, is seeking to raise about $80m in a self-conducted Series C capital raise, President Michael Ginsberg told ReSource.

The company previously hired Bank of America to run a $1bn raise but pulled back on the process in favor of more incremental growth, Ginsberg said. The company has already raised $40m of the $120m Series C and is aiming for a close by mid-summer.

With US operations in West Virginia (where co-founder Mark Koepke is a professor of physics at WVU) and headquarters in Oxford, England, Tokamak was recently included in the US Department of Energy’s multimillion-dollar Fusion Development Program and partnered with General Atomics on advanced magnet technology.

Ginsberg previously worked as vice president of technology and project execution at Avina Clean Hydrogen, where he was instrumental in developing the Nueces Clean Ammonia project in Texas. He said Tokamak is planning to build fusion generation in the United States, but has a magnets business with a near-term return profile.

Magnets business

Tokamak is a developer of high-temperature superconducting (HTS) magnets.

They are developed for fusion to contain plasma energy, but like the semi-conductor business, they’ve had applications in other industries, such as defense, offshore wind turbines, and mineral separation.

First revenue from those magnets, from another fusion company, came in last year, he said. There are ongoing contract negotiations with the US Department of Defense and an imaging device maker that uses magnets.

Rail companies interested in maglev (from magnetic levitation) technology are also in discussions with Tokamak, he said.

Turnaround for that business for investors is expected to be three to five years, Ginsberg said.

Fusion-to-X

Tokamak is planning to develop its first commercial scale plant (COD after 2030) in the US.

Requirements for site selection are dependent on nearby capabilities; if deuterium and tritium are to be used as fuels, there needs to be a nearby facility that can handle those hydrogen-isotope fuels. For example, Oak Ride National Labs in Tennessee can handle tritium.

The other siting concern is use case.

“It could be, certainly, pumping electrons onto the grid, in which case your limited by transmission lines,” Ginsberg said. “But also, we could create industrial thermal energy, thermal heat, and co-locate with decarbonized heavy industry.”

Co-location with data centers is another option, he said. Tokamak is also exploring hydrogen production.

“Obviously you could do the traditional electrolysis process, and we’re talking to some companies that just need electrons to convert the H2O into hydrogen and oxygen, and they want baseload power to do that as opposed to intermittent power,” he said. “Also, there’s thermal energy and thermal processes to produce hydrogen that we could use from the fusion reaction.”

Ginsberg, who oversees US operations at Tokamak, was hired following the DOE award.

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exclusive

Siemens Energy NA executive priming for scale in hydrogen

The North American wing of the global technology company is in the earliest stages of engaging EPC providers and economic development officials for its next US electrolyzer manufacturing site, Richard Voorberg, president of Siemens Energy North America, said in an interview.

To say the demand for electrolyzer capacity has grown exponentially in 2022 comes across as an understatement, as customers in industry and energy have increased their orders multiple times over.

Siemens Energy North America’s electrolyzer – which is 18 MW and among the largest in the market – was too large for many customers just a year ago, Richard Voorberg, president of Siemens Energy North America, said in an interview. But following passage of the IRA, the question became how many the customer could get – and how fast.

“How quickly can I get 100 of your electrolyzers?” Voorberg said he hears now, whereas before that same customer might have asked for half an electrolyzer.

The decision to make an electrolyzer as large as 18 MW was part of the company’s strategy to have bigger capacity as the market for hydrogen expanded, Voorberg said.

HIF Global recently said it has tapped Siemens Energy to engineer and design their proprietary “Silyzer 300” electrolyzers to produce approximately 300,000 tons per year of green hydrogen at an eFuels facility in Texas.

Siemens Energy NA is now in the earliest stages of developing a new electrolyzer manufacturing plant in the United States, as previously reported by ReSource.

The US plant will be similar to the plant Siemens Energy is building in Berlin, and won’t be built until after Berlin is completed, Voorberg said.

The company is actively engaging with state economic development committees to scout locations, incentives and labor supplies. It is also in the early stages of engaging engineers, EPC providers and other development partners, Voorberg said.

“We also need to decide in the next few months what we want to do in-house, with our own shops, versus what we want to outsource,” Voorberg said.

North Carolina, Houston, Alabama and upstate New York are all in Siemens Energy’s existing footprint and are as such strong contenders for the new facility, Voorberg said, though nothing is set in stone as far as location. The company would finance the facility within its normal capex expenses within a year.

In electrolyzer manufacturing there is some “test hydrogen” that is produced, so there will be a need to find some small offtaker for that, Voorberg said. The company could also use it to supply its own fork-trucks in the future.

Open to acquisitions

Diving into an acquisition of another electrolyzer manufacturer probably would not make sense for Siemens Energy, Voorberg said. But the company is open to M&A.

He cited the acquisition of Airfoil Components in Florida as the type of deal that the company could move on again. In that case, the target company had expertise in casting that was easier to acquire than build from scratch.

“Does that make more sense that we buy it, that we outsource it, or should we be doing something like that ourselves?” Voorberg said are questions he often asks.

“When it comes to less complicated things, like a commodity market, that’s not something we play well in or need to play well in,” Voorberg said. “When it comes to a specialty design-type product, that’s where we at Siemens Energy shine.”

Right now, the Siemens Energy parent company has a bid out to acquire the third of Siemens Gamesa, the Spanish-listed wind engineering company, that it does not own, Voorberg noted.

Start-up opportunity

Siemens Energy, through its in-house venture capital group and partnerships with US universities, is interested in helping technology startups scale, Voorberg said.

“We can play in between them and the customers and do the introductions and potentially even partner in with some of our technology,” he said.

The company keeps close relationships with incubators at Georgia Tech and the University of Central Florida, among others, Voorberg said.

Equity investments will be made through the VC group, Voorberg said, noting that effort as one that is strategic in growing the energy transition, rather than financial.

Additional non-equity partnerships, similar to the fellowship with the Bill Gates-founded Breakthrough Energy, are on the table as well.

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