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Ameresco begins construction on Sacramento biogas co-generation project

The firm has entered a nearly $140m contract to develop and construct an advanced technology biogas cogeneration facility for the Sacramento Area Sewer District.

Ameresco, Inc., a cleantech integrator specializing in energy efficiency and renewable energy, has entered a nearly $140m contract to develop and construct an advanced technology biogas cogeneration facility for the Sacramento Area Sewer District located at the EchoWater Resource Recovery Facility (EchoWater Facility) near Elk Grove, California, according to a news release.

This on-site renewable energy facility will beneficially utilize biogas (methane), a byproduct of the EchoWater Facility’s solids treatment process, to produce renewable electricity and heat for the EchoWater Facility through an integrated 13.4 MW cogeneration plant that will utilize fuel cell and engine technology.

Construction of the new facility is expected to be completed by July 2026.

By incorporating the fuel cell system, the project will have exceptional efficiency and reduced pollutant emissions, making it a clean, reliable baseload dispatchable resource. Additionally, the system will allow for the expandability to produce hydrogen in the future.

“SacSewer is committed to being a leader in environmental stewardship. Through our sustainable efforts in resource recovery, we maximize the reuse of treatment process by-products such as biogas,” shared Christoph Dobson, SacSewer’s General Manager. “This project is yet another example of how we’re working every day to fulfill our mission of protecting public health and the environment by collecting, treating, and recovering resources from sewage.”

“We are thrilled to partner with SacSewer, supporting their efforts to optimize the use of the biogas that is generated as a byproduct of the sewage treatment process,” said Michael Bakas, Executive Vice President of Ameresco. “Capturing and repurposing biogenic methane, that is already in our environment and produced by society, to displace fossil fuel is a powerful example of the circular economy in action, where waste is not discarded, but turned into a valuable asset. This voluntary act by SacSewer, backed by a material investment into this advanced renewable energy center, speaks volumes to their commitment to our environment and their surrounding community.”

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Technip and Casale to jointly offer blue hydrogen technology

The companies will offer a process design package, equipment, and entire plants using oxidative reforming, autothermal reforming, and partial oxidation technologies.

Technip Energies (PARIS: TE) and Casale announce a new partnership to jointly license oxidative reforming-based technologies; autothermal reforming (ATR) and partial oxidation (POx) technologies for the blue hydrogen market, according to a news release.

ATR is a process to produce syngas that contains hydrogen, CO and CO2. It becomes cost-effective for low-carbon hydrogen when combined with carbon capture technology and suitable for larger-scale facilities.

As part of this collaboration, Technip Energies and Casale will be co-licensors of the technology and will offer Process Design Package (PDP), proprietary equipment and entire plants. In order to decarbonize hydrogen facilities, the ATR-based solution could achieve up to 99% of carbon capture rate.

Technip Energies’ two centers of excellence for hydrogen, Claremont CA, US and Zoetermeer, NL, will jointly execute with Casale PDP for ATR-based blue hydrogen projects.

Loic Chapuis, SVP gas & low carbon energies of Technip Energies, commented: “We are excited to announce this partnership with Casale, which will allow us to offer cutting-edge ATR-based solutions for the blue hydrogen market. By leveraging our global leadership in hydrogen, having delivered more than 30% of the installed capacity worldwide, with our combined proprietary technologies, we are confident that we can provide advanced and cost-effective solutions that will meet the needs of our customers. ATR-based solutions will be complementary to T.EN’s proprietary SMR-based solutions, allowing us to offer a complete range of solutions in the low-carbon hydrogen market. We look forward to working with Casale to drive innovation and decarbonize hydrogen production at scale.”

Federico Zardi, CEO of Casale SA, said: “We are delighted to enter this partnership with Technip Energies, a global leader in hydrogen plants. This partnership can provide the market with advanced solutions for the decarbonization of the world, leveraging our long history of developing and applying advanced ATR and POx technologies with several ATR-based mega production units already delivered, in combination with Technip Energies’ technological expertise in the hydrogen field.”

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California Resources considering splitting off carbon management business

Oil and gas producer California Resources is considering splitting off its carbon management business, Carbon Terravault, which is a JV with Brookfield Renewable.

Oil and gas producer California Resources is considering splitting off its carbon management business, Carbon Terravault, in an effort to accelerate growth at the unit.

The carbon business, which is a joint venture with Brookfield Renewable, will be managed on a standalone basis over time, which would provide the flexibility to eventually separate the unit from its oil exploration and production business, the company stated in a press release.

ReSource previously interviewed the company’s chief sustainability officer about its approach to investments in carbon capture and blue molecule production in California.

“We have a vision that these two businesses over time need to be run and potentially separated. And that will mature over time,” said CEO Mark “Mac” McFarland on the company’s earnings call Friday. “This is just the first step of many.”

McFarland in May will transition from CEO to his former role as a non-executive director and will also serve as non-executive chair of the newly formed board of the Carbon TerraVault subsidiary. Replacing him as CEO is Francisco Leon, who is currently the CFO.

The Carbon Terravault joint venture was formed to create a partnership focused on carbon capture and sequestration development, along with carbon management service agreements with parties such as Lone Cypress Energy and Grannus, LLC, to provide permanent carbon storage.

In 2023, CRC is focused on signing up additional emitter projects, advancing CalCapture and the California Direct Air Capture Hub, and submitting additional Class VI permit applications.

“If you look at the PDP value of the company, and then I look at what we think is the value of carbon management, we don’t think it’s reflected in the stock price,” Leon said on the call. “We’re going to take the steps to unlock that.”

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Data: North America blue ammonia project status

Since ammonia as an energy commodity is still a new idea with a yet-to-be-created market, there’s a general sense of uncertainty looming over the industry.

As of April 2024, there are 42 blue ammonia projects in North America, including announced, greenfield, suspended, and projects that have reached a final investment decision (FID), according to data gathered by ReSource

The vast majority of them, 34, are located in the United States. Over 60% of them are in the Gulf Coast region. Thanks to their attractive energy infrastructure and ports, from where producers could easily export the product to eager markets like Europe, Japan and South Korea, Texas and Louisiana are emerging as the undisputed North American hubs for blue ammonia. 

Canada has eight blue ammonia projects, mostly concentrated in Alberta. 

As a region with a strong oil and gas industry and already a natural ammonia hub sitting on major ammonia trade routes, North America, and the US in particular, is well positioned to dominate a future global blue ammonia market, according to a source familiar with the industry.

Overall, 20 North American projects are at a greenfield status, understood as comprising any project that has developed past a feasibility study stage, while an additional 19 have been announced, one has been suspended, and two have achieved the FID milestone. 

OCI Global started building its blue ammonia project in Beaumont, Texas, in December 2022. The plant will receive the necessary low-carbon hydrogen supply from Linde, and, once it starts operations in 2025, it is expected to produce 1.1 million tonnes of blue ammonia per year, which, according to OCI, would make it the largest blue ammonia plant in the world.  

One year later, in November 2023, Air Products received final investment approval for its $7bn clean energy complex in Louisiana, which will produce both blue hydrogen and blue ammonia. 

Both companies have a robust network of existing relationships and infrastructure to rely on to offset the risks, which facilitates securing investments and offtake agreements, according to the source. 

Another major blue ammonia project, Nutrien’s Geismar Clean Ammonia facility, which had a planned $2bn of capex, was officially suspended in August 2023 because of market uncertainty and high capital costs. 

The project’s suspension could be a sign that some fertilizer producers are hesitant to invest in blue ammonia production if major energy players like ExxonMobil are also entering the space with their vast resources, according to another source familiar with the market. At the moment, around 70% of ammonia produced globally is used as a fertilizer, with the remainder used for industrial applications such as plastics, according to the International Energy Agency. 

Since ammonia as an energy commodity is still a new idea with a yet-to-be-created market, there’s a general sense of uncertainty looming over the industry. Project developers are waiting for off-takers to move forward, while the off-takers are waiting for the project developers to take the first steps, especially as government subsidies like the 45V tax credit are still being worked out, according to the first source. 

Of the nine main companies involved in blue ammonia projects in North America, however, the majority have been operating in the fertilizer industry for years. 

With five ongoing projects, CF Industries is the most active one. As CEO Tony Will said in a recent investor call, the company expects the largest source of clean ammonia demand to come from Japan, and it has arrangements in place to develop one of its blue ammonia projects with both JERA Co. and Mitsui. 

(ReSource initially recorded CF Industries’ arrangements with JERA Co. and Mitsui as two separate projects, but condensed them into one after executives said they would seek to align them under a single project during the investor call.) 

The prediction is in line with Japan’s active role in the development of many North American clean fuels projects – around 4% of all clean fuels projects in North America have one or more Japanese firms involved as co-developers, equity investors, or off-takers. Accordingly, JERA and Mitsubishi come right after CF Industries for blue ammonia activity, being involved in four projects each. 

Two things will play an important role in the future: what the carbon intensity reduction threshold is for a project to claim to produce blue ammonia, and how the nascent industry will adapt to the disarray in gas prices caused by Russia’s war in Ukraine. 

The coming months will clarify which of the flurry of projects announced in the past couple of years are actually moving forward. 

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Inside Intersect Power’s green hydrogen plans

California-based renewable energy developer Intersect Power anticipates huge capital needs for a quartet of regional energy complexes co-locating wind and solar with green hydrogen production in the Texas Gulf Coast, California and the American West.

Intersect Power, a solar developer that completed a $750m capital raise last year, is developing four large-scale green hydrogen projects that could eventually be spun off into a separate company, CEO Sheldon Kimber said in an interview.

Four regional complexes of 1 GW or more, co-located with renewables, are in development, he said. The first phases of those, totaling several hundred megawatts, will come online between 2026 and 2028.

Initial offtake markets include transportation, sustainable aviation fuel, and hydrogen for industrial use, Kimber said. Ultimately Intersect is aiming to serve ammonia exporters in the US Gulf Coast, particularly those exporting to Japan, Kimber said, adding that the company could contract with ammonia producers. He recently wrapped up a nine-day, fact-finding trip to Japan to better understand what he believes will be the end market for Intersect’s green ammonia.

“If you don’t know who your customer’s customer is, you’re going to get a bad deal,” Kimber said.

Intersects projects under development involve behind-the-meter electrolysis, co-located with Intersect’s wind and solar generation plants. In 2021 the company signed an MOU with electrolyzer manufacturer Electric Hydrogen. The contract is for 3 GW.

Intersect controls the land and is in the process of permitting the four projects, located in Texas, California and another western US location that Kimber declined to name. The primary focus now is commercial development of the offtake and transportation, he said.

‘Boatload of equity’

Kimber said the company will be ready to announced details of the projects when they are ready to seek financing. He estimates that upwards of $12bn will need to be raised for the package of complexes.

“There’s going to be an enormous need for capital,” Kimber said. Debt will make up between 60% and 90% of the raising, along with “a boatload of equity,” he said. Existing investors will likely participate, but as the numbers get bigger new investors will be brought on board.

Intersect has worked with BofA Securities and Morgan Stanley on past capital raise processes, and also has strong relationships with MUFG and Santander.

Moving forward the company could have a broader need for advisory services and could lend knowledge of the sector in an advisory capacity itself, Kimber said.

“The scope and scale of what we’re doing is big enough and the innovative aspect of what we’re doing is advanced enough that I think we have a lot we can bring to these early-stage financings,” Kimber said. “I think we’re going to be a good partner for advisory shops.”

In the short term Intersect has sufficient equity from its investors and is capitalized for the next 18-to-24 months, Kimber said. Last summer the company announced a $750m raise from TPG Rise Climate, CAI Investments and Trilantic Energy Partners North America.

“People don’t want to pay ahead for the growth in fuels,” Kimber said, adding that reaching commercial milestones will build a compelling valuation.

Intersect could spin off its hydrogen developments to capitalize them apart from renewables, Kimber said.

“Every single company in this space is looking at that,” he said. “Do you independently finance your fuels business?”

Avoiding the hype

Right now the opportunity to participate in hydrogen is blurry because there is so much hype following passage of the IRA, Kimber said. Prospective investors should be focused on picking the right partners.

“What you’re seeing right now is everybody believing the best thing for them,” Kimber said, noting that his company has decided to keep relatively quiet about its activities in the clean fuels space to avoid getting caught up in hype. “The IRA happened, and every electrolyzer company raised their prices by fifty percent.”

Of those companies that have announced hydrogen projects in North America, Kimber said he believes only a handful will be successful. Those companies that have successfully developed renewables projects of more than 500 MW are good candidates, as are companies that have managed to keep a fluid supply chain with equipment secured for the next five years.

“That is a very short list,” he said.

Lenders on the debt side will want to start determining how projects will get financed, and which projects to finance, in the next 18 months, Kimber said.

Finding those who have been innovating on the front-end for years and not just jumped in recently is a good start, Kimber said.

“Hydrogen will happen, make no mistake,” Kimber said. He pointed to the recent European directive that 45% of hydrogen on the continent be green by 2030 and Japan’s upcoming directive to potential similar effect. Once good projects reach critical points in their development they will start to trade, probably in late 2024, he said.

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Houston ammonia and hydrogen terminal on the block

The owners of a recently developed Houston terminal with proximity to ammonia, hydrogen, and nitrogen pipelines are working with an advisor on a sale process.

The owners of Vopak Moda Houston, a Gulf Coast hydrogen and ammonia terminaling asset, have hired an investment bank to run a sale process, according to two sources familiar with the matter.

Intrepid Investment Bankers has been retained to run the process, the sources said.

Vopak Moda and Intrepid did not respond to requests for comment.

Formed in 2016, Vopak Moda Houston is a 50/50 joint venture between Royal Vopak and Moda Midstream. Moda Midstream is a portfolio company of EnCap Flatrock Midstream, which did not respond to a request for comment.

In 2021 the JV commissioned its deepwater dock at the Port of Houston. It has constructed storage and terminal infrastructure for industrial gas product lines, with the stated intention of becoming a premier hydrogen and low-carbon ammonia terminaling hub in the Gulf Coast.

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Exclusive: Pattern Energy developing $9bn Texas green ammonia project

One of the largest operators of renewable energy in the Americas, San Francisco-based Pattern is advancing a 1-million-ton-per-year green ammonia project in Texas.

Pattern Energy knows a thing or two about large renewable energy projects.

It built Western Spirit Wind, a 1,050 MW project in New Mexico representing the largest wind power resource ever constructed in a single phase in the Americas. And it has broken ground on SunZia, a 3.5 GW wind project in the same state – the largest of its kind in the Western Hemisphere.

Now it is pursuing a 1-million-ton-per-year green ammonia project in Corpus Christi, Texas, at an expected cost of $9bn, according to Erika Taugher, a director at Pattern.

The facility is projected to come online in 2028, and is just one of four green hydrogen projects the company is developing. The Argentia Renewables project in Newfoundland and Labrador, Canada is marching toward the start of construction next year, and Pattern is also pursuing two earlier-stage projects in Texas, Taugher said in an interview.

The Corpus Christi project consists of a new renewables project, electrolyzers, storage, and a pipeline, because the electrolyzer site is away from the seaport. It also includes a marine fuels terminal and an ammonia synthesis plant.

Pattern has renewable assets in West and South Texas and is acquiring additional land to build new renewables that would allow for tax incentives that require additionality, Taugher said.

Financing for the project is still coming together, with JV partners and prospective offtakers likely to take project equity stakes along with potential outside equity investors. No bank has been mandated yet for the financing.

Argentia

At the Argentia project, Pattern is building 300 MW of wind power to produce 90 tons per day of green hydrogen, which will be used to make approximately 400 tons per day of green ammonia. The ammonia will be shipped to counterparties in Europe, offtake contracts for which are still under negotiation.

“The Canadian project is particularly exciting because we’re not waiting on policy to determine how it’s being built,” Taugher said. “The wind is directly powering our electrolyzers there, and any additional grid power that we need from the utility is coming from a clean grid, comprised of hydropower.“

“We don’t need to wait for rules on time-matching and additionality,” she added, but noted the renewables will likely benefit from Canada’s investment tax credits, which would mean the resulting ammonia may not qualify under Europe’s rules for renewable fuels of non-biological origin (RFNBO) as recently enacted.

Many of the potential offtakers are similarly considering taking equity stakes in the Argentia project, Taugher added.

Domestic offtake

Pattern is also pursuing two early-stage projects in Texas that would seek to provide green hydrogen to the domestic offtake market.

In the Texas Panhandle, Pattern is looking to repower existing wind assets and add more wind and solar capacity that would power green hydrogen production.

In the Permian Basin, the company has optioned land and is conducting environmental and water feasibility studies to prove out the case for green hydrogen. Pattern is considering local offtake and is also in discussions to tie into a pipeline that would transport the hydrogen to the Gulf Coast.

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