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AIMCo takes majority control of Howard Energy Partners

AIMCo will now hold a total ownership stake of 87% in HEP, which is developing a blue hydrogen facility at the Port of Corpus Christi.

Alberta Investment Management Corporation has acquired a stake in Howard Energy Partners from Astatine Investment Partners, according to a press release.

AIMCo will now hold a total ownership stake of 87% in HEP, the release states. The company acquired an initial 28% stake in 2017

HEP management and other minority investors will continue to hold a 13% ownership interest in the company.

TPH&Co., the energy business of Perella Weinberg Partners, served as financial advisor and Kirkland & Ellis served as legal advisor to AIMCo on the transaction.

Last year the Port of Corpus Christi Authority and HEP) executed an MOU to convert Howard’s Javelina refinery services facility at the port into a blue hydrogen production facility.

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Element Resources now targeting 1Q24 FID for green hydrogen project

The Houston-based company had previously said it would reach FID before the end of this year for the facility, which will be capable of producing between 20,000 and 24,000 tons per year of green hydrogen.

Element Resources is targeting a 1Q24 final investment decision for a green hydrogen production facility in development in Lancaster, California.

The Houston-based company had previously said it would reach FID before the end of this year for the facility, which will be capable of producing between 20,000 and 24,000 tons per year of green hydrogen.

“We have secured land and water rights and have made substantial progress in permitting, equipment selection, and off take development,” the company said in a news release. “We are presently aiming for a final investment decision by 1Q24.”

The company is evaluating the potential of systematic expansion of green hydrogen production in the Lancaster area and surrounding environs to keep pace with what it calls significant prospective demand for green hydrogen, SAF, and other hydrogen derivates.

The mobility, aviation, agriculture, mining, and industrial sectors have all shown keen interest in the potential of green hydrogen and its derivates throughout California and the region, the company said.

A new Memorandum of Understanding between Lancaster and Element Resources further proves Lancaster’s commitment to becoming the first US Hydrogen City.

“We are addressing the challenges of designing, constructing, and operating a green hydrogen facility reliant solely upon photovoltaic solar,” the release continues.

The utilization of power supplied by public utilities via the electricity grid is impractical insofar as the cost per kilowatt renders the use of ‘grid’ electricity impractical on an economic basis for green hydrogen in California.

Coupled with the costs of interconnection and the time lag for obtaining the interconnection, grid electricity is impractical. Grid electricity may not be 100% renewable, effectively introducing carbon into the production of hydrogen.

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Sustainable fuels firm raises pre-Series A

The sustainable fuels-focused climate tech company raised the funding from a global syndicate of investors.

Aether Fuels, a climate technology company, has raised $8.5m in pre-Series A financing via convertible notes.

The global syndicate includes JetBlue Ventures, the corporate venture capital (CVC) division of JetBlue, as well as TechEnergy Ventures (the CVC division of the Techint Group), Doral Energy Tech Ventures (the CVC division of Doral Energy), Foothill Ventures, and existing investor, Xora Innovation, according to a news release.

Aether makes sustainable fuels to enable large industries like aviation and ocean shipping to achieve net zero emissions. The fuel is made from low-cost and abundant waste carbon streams, such as captured carbon dioxide, industrial waste gases, municipal solid waste, agricultural residues, and waste biomass. Aether’s novel process combines feedstock flexibility with maximum yield and slashes plant capital costs, enabling dramatically better unit economics while also meeting stringent sustainability criteria, according to the news release.

Aether will use the funds to accelerate the development and scale-up of its proprietary production technologies, expand its demo facility in Chicago, and grow the global team.

“We are grateful to our investors for their confidence in our technology approach and scalable global business strategy,” said Aether CEO Conor Madigan. “Their support caps a year of breakthroughs that validated our technology and crystallized our roadmap to commercialization. In addition, we appointed experienced sustainable fuel executives to key R&D, operations, and engineering leadership roles in the U.S. and Singapore, and started planning for manufacturing scale-up.”

Established in 2022 as a spin-out of Xora Innovation, a deep-tech early-stage investment platform of Temasek, the company maintains principal offices in the U.S. and Singapore.

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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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IPP retains banker for California plant sale

An independent power producer has retained a banker for a sale of a decades-old gas plant in California. Aging gas plants have been in the sights of clean fuels developers looking to retrofit or use facilities for clean fuel production and combustion.

GenOn, an independent power producer, has hired Solomon Partners to sell a 54 MW gas plant in California, according to sources familiar with the matter.

The plant, Ellwood, is located in Goleta, in Santa Barbara County, and was shuttered and retired by GenOn as of 2019. It reached COD in 1973 and ran two Pratt & Whitney FT4C-1 gas turbine engines.

Ellwood previously interconnected via Southern California Edison, a utility that is pursuing multiple natural gas decarbonization projects, including a hydrogen-blending initiative with Bloom Energy.

A teaser for the sale of Ellwood, which was issued last week, notes there is an opportunity to install a battery energy storage system at the site, one of the sources added.

Elsewhere in California, investment firm Climate Adaptive Infrastructure and developer Meridian Clean Energy are seeking to demonstrate decarbonization in peaker plants at the much newer gas-fired Sentinel Energy Center. Their plans include hydrogen blending.

GenOn declined to comment. Solomon Partners did not respond to requests for comment.

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Ammonia-to-power company planning up to $500m Series C

Ammonia-to-power start-up Amogy will launch a final equity raise once it establishes revenue milestones in 2023 and 2024

Amogy, an ammonia-to-power technology start-up, will likely launch a $400m to $500m Series C late next year, CEO Seonghoon Woo said in an interview.

The company should achieve its first revenues this year and grow those revenues in 2024 to reach a target valuation, Woo said. The company to date has not used a financial advisor.

Amogy is planning to use proceeds from a recent Series B-1 capital raise to expand into a Houston manufacturing facility as it seeks to bring its product to the market.

After demonstrating its technology on a drone, a tractor, and a semi truck, the company is currently working to install its ammonia-cracking technology on a tugboat, and plans to advance a commercialization strategy starting in 2024, Woo said.

The proceeds of the $139m capital raise announced last week will allow Amogy to expand into an already-built facility in Houston, Woo said. The company also plans to roughly double its workforce from 110 employees currently as it boosts capacity in R&D, manufacturing, and commercialization.

CEO Seonghoon Woo

Amogy was founded in 2020 by four MIT PhD alumni, including Woo, and is based in Brooklyn, New York.

Ammonia vs hydrogen

Woo believes using ammonia as a fuel and cracking it into hydrogen solves the transportation issues facing hydrogen, as ammonia is already a widely traded global commodity.

Similarly, at room temperature, ammonia can be stored as a liquid with only mild pressure (~8 bar), compared to the cryogenic requirements for liquid hydrogen.

And, according to a white paper commissioned by Amogy, the volumetric energy density of liquid ammonia is 12.7 megajoules per liter, which is higher than for liquid hydrogen at 8.5 MJ/L and compressed hydrogen at 4.7 MJ/L (at a pressure of 69 MPa in ambient temperature conditions), but lower than for diesel or gasoline.

“Over an equivalent distance, fueling a vehicle solely using ammonia would require approximately three times the internal tank volume needed for conventional diesel fuel but three times less than the volume required for compressed hydrogen,” the paper reads.

While Amogy’s technology is compatible with any color ammonia, Woo said regulations in Scandinavia and Europe give confidence that the global market for clean ammonia will become competitive with fossil-based fuels.

Scaling up

The recent capital raise gives Amogy roughly two years of runway before additional fundraising might be needed, at which point the company will have more visibility into revenue growth, Woo added.

The latest funding round was led by SK Innovation, joined by other global investors including Temasek, Korea Zinc, Aramco Ventures, AP Ventures, MOL PLUS, Yanmar Ventures, Zeon Ventures and DCVC.

The company previously raised roughly $70m in three separate funding rounds, with proceeds allowing it to demonstrate the drone, heavy-duty tractor, and semi truck. Woo said the tractor project drew interest from John Deere, which sent representatives to observe and offer some assistance on the retrofit.

In previous capital raises, Woo said Amogy has encountered investor reluctance to enter what is considered an early market with regulatory and economic risk, with some investors wanting to wait as much as another two years before gaining exposure to the market. The strongest interest has come from upstream producers.

Amogy plans to continue scaling up its technology in the maritime industry to cargo and container ships as well as offshore supply vessels, Woo said.

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Waste-to-energy company interviewing advisors for strategic capital raise

Vancouver-based Klean Industries plans to run a process to raise between $250m – $500m of capital to deploy into projects, some of which would use green hydrogen to upgrade recovered fuel and pyrolysis oils.

Waste-to-energy specialist Klean Industries is interviewing financial advisors and planning to run a process to find investors for a strategic capital raise.

The Vancouver-based company is seeking to raise between $250m – $500m in a minority stake sale that would value the company around $1bn, Klean CEO Jesse Klinkhamer said in an interview.

Klean had previously intended to list on the NASDAQ exchange but those plans were nixed due to the COVID-19 pandemic, he said. The company still plans to list publicly in 2024 or 2025.

Proceeds from a capital raise now would be used to “rapidly deploy” into the projects that Klean is advancing around the globe, Klinkhamer said.

For one of those projects – a flagship tire pyrolysis plant in Boardman, Oregon – Klean is raising non-recourse debt to finance construction, the executive said. Klinkhammer declined to name the advisor for the project financing but said news would be out soon and added that the company has aligned itself with infrastructure funds willing to provide non-recourse debt for the facility.

The Boardman project, which is expected to cost roughly $135m, is an expansion of an existing site where Klean will use its advanced thermal conversion technology to recover fuel oil, steel, and refined carbon black from recycled tires. The end products are comparable to virgin commodities with the exception of being more cost-effective with a lower carbon footprint.

“A lot of what we do is of paramount interest to a lot of the ESG-focused infrastructure investors that are focused on assets that tick all the boxes,” Klinkhamer said, noting the consistent output of the waste-to-energy plants that Klean is building along with predictable prices for energy sourced from renewable power.

Klean has also partnered with H2Core Systems, a maker of containerized green hydrogen production plants, and Enapter, an electrolyzer manufacturer. The company will install a 1 MW electrolyzer unit at the Boardman facility, with the green hydrogen used to upgrade recovered fuel oil and pyrolysis oil into e-fuels that meet California’s Low Carbon Fuels Standards.

“We were exploring how we could improve the quality of the tire pyrolysis oil so that it could enter the LCFS market in California,” he said, “because there are significant carbon credits and tax incentives associated with the improved product.”

The company received proposals from industrial gas companies to bring hydrogen to the Boardman facility that were not feasible, and Klean opted for producing electrolytic hydrogen on site in part due to the abundance of low-cost hydroelectric power and water from the nearby Columbia River.

Addressable market

Discussing Klean’s addressable market for waste-to-energy projects, Klinkhamer points to Japan as an example of a comparable “mature” market.

Japan, an island nation of 126 million people, has built roughly 5,000 resource recovery, waste-to-energy plants of various scopes and designations, he notes. For comparison, the United Kingdom – another island nation of 67 million people – has just 20 waste-to-energy plants.

“The opportunity for waste-to-energy in the UK alone is mind boggling,” he said. “There are a thousand opportunities of scope and scale. Nevermind you’ve got an aging, outdated electrical infrastructure, limited landfills, landfill taxes rising – a tsunami of issues, plus the ESG advent.”

A similar opportunity exists in North America, he noted, where there are around 100 waste-to-energy plants for 580 million people. The company is working on additional tire, plastic, and waste-to-energy projects in North America, and also has projects in Australia and Europe.

Hydrogen could be the key to advancing more projects: waste-to-energy plants have typically been hamstrung by a reliance on large utilities to convert energy generated from waste into electricity, which is in turn dependent on transmission. But the plants could instead produce hydrogen, which can be more easily and cost effectively distributed, Klinkhamer said.

“There is now an opportunity to build these same plants, but rather than rely on the electrical side of things where you’re dealing with a utility, to convert that energy into hydrogen and distribute it to the marketplace,” he added.

Hydrogen infrastructure

Klinkhamer says the company is also examining options for participating in a network of companies that could transform the logistics for bringing feedstock to the Boardman facility and taking away the resulting products.

The company has engaged in talks with long-haul truckers as well as refining companies and industrial gas providers about creating a network of hydrogen hubs – akin to a “Tesla network” – that would support transportation logistics.

“It made sense for us to look at opportunities for moving our feedstock via hydrogen-powered vehicles, and also have refueling stations and hydrogen production plants that we build in North America,” he said.

Klean would need seven to 12 different hubs to supply its transportation network, Klinkhamer estimates, while the $350m price tag for the infrastructure stems from the geographic reach of the hubs as well as the sheer volume of hydrogen required for fueling needs.

“With the Inflation Reduction Act, the U.S. has set itself up to be the lowest-cost producer of hydrogen in the world, which will really spur the development of hydrogen logistics for getting hydrogen out,” he said. “And to get to scale, it’s going to require some big investments.”

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