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Arizona RNG firm seeking equity capital

A renewable natural gas developer with sites proposed in southern California and Arizona is seeking additional equity investors.

True North Renewable Energy Company, a Phoenix-based waste-to-energy developer, is undergoing a Series B equity raise, according to two sources familiar with the matter.

Whitehall & Company is advising, the sources said.

True North develops, builds, and operates organics-to-energy facilities, including large, regional, high solids anaerobic digestion infrastructure, according to its website.

The firm is primarily active in southern California and Arizona. Sites have been announced in Imperial County, Kern County and Mojave (all in California) as well as Yuma County, Arizona. Collectively, these could produce up to 3m mmbtu per annum, using up to 700,000 tons of organic compost from regional farms.

The company is a holding of True North Venture Partners, of Phoenix and Chicago.

TNRE and Whitehall did not respond to requests for comment.

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North Dakota CCS project enters final development stages

Closing on financing for Project Tundra at the coal-fired Milton R. Young Station power plant is expected in early 2024.

Minnkota Power Cooperative has solidified agreements with TC Energy, Mitsubishi Heavy Industries, and Kiewit to move a North Dakota carbon capture project into its final stage of development, according to a news release.

Under the arrangements, Minnkota will continue to lead development activities for “Project Tundra” at the Milton R. Young Station power plant, as well as coordination with landowners and community members in the project area near Center, N.D.

Closing on financing and the notice to move forward with construction of Project Tundra are anticipated in early 2024. The project remains subject to closing on financing and a final investment decision by each of the project entities in the consortium.

TC Energy will lead commercialization activities, including qualifying for federal 45Q tax credits. Return on project construction and operation costs would be recouped through 45Q, which provides $85 per ton of CO2 permanently stored underground.

In addition, the project participants submitted applications in May for a $350m grant through the U.S. Department of Energy’s Carbon Capture Demonstration Projects Program and a $150m loan through the state of North Dakota’s Clean Sustainable Energy Authority. The project currently has approval for a $100m CSEA loan.

Project Tundra is designed to capture up to four million metric tons of CO2 annually from the coal-based Young Station. The CO2 will be stored more than a mile underground. Minnkota currently has the largest fully permitted CO2 storage facility in the United States and is pursuing additional CO2 storage opportunities near the Young Station.

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Renewable fuels company Raven SR awarded EU commission grant

The Wyoming-based company received the grant for the development of a waste-to-hydrogen plant in Spain.

Raven SR Inc., a renewable fuels company, has been awarded a €1.7m (USD$1.75m) grant from the European Commission for the development of a waste-to-hydrogen production facility in the Aragón region of Spain, according to a news release.

The funding is part of a broader €14m European Commission grant to Hy2Market, a multi-regional project led by the New Energy Coalition to research and produce hydrogen on an accelerated timeframe.

The company has been working on a $100m capital raise expected to close last month, as reported by ReSource.

Raven SR earlier this year established Raven Iberia, a wholly owned subsidiary in Zaragoza, the capital of Aragón, in conjunction with planning the $35m waste-to-hydrogen production facility in the region. The modular project’s commercial operations are targeted to begin in 2024 and the fuel supply will serve hydrogen-powered vehicles.

The Raven SR project in Aragón will produce 1,600 metric tons per year of renewable hydrogen from approximately 75 tons of organic solid waste per day. Raven SR’s patented, non-combustion technology reduces waste and emissions while creating clean, renewable fuel. Its design provides higher energy output per ton of waste than any other waste-to-hydrogen technology worldwide.

“We are honored to receive such broad support for our first waste-to-hydrogen production facility in Europe,” said Raven SR CEO Matt Murdock. “This initial project in Spain provides a foothold in a regional market that is highly supportive of shifting away from carbon-intensive fuels to achieve a net-zero energy economy. We also look forward to collaborating within the wider Hy2Market consortium to potentially expand to additional sites in the European Union.”

Raven SR’s project in Spain was chosen late last year by the S3 European Hydrogen Valleys Partnership as the best new industrial European initiative linked to hydrogen due to its advanced technological development stage and potential for scaling up in the European Union. Raven SR is also part of the Pilot Action Hy2Market and European Consortium related to the Interregional Innovation Investment Funding Instrument I3, which aims to support the commercialization and scaling up of interregional European innovation projects and investments through the development of European hydrogen value chains.

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Spain-based Exolum acquires stake in Houston ammonia terminal

ReSource first reported earlier this year that valuation multiples for the terminal stake held by Moda Midstream were being discussed above 20x EBITDA.

Exolum, a provider of liquid product storage and logistics, has entered into a definitive agreement to acquire a 50% interest in Vopak Moda Houston LLC, an ammonia storage, import and export terminal located on the Houston Ship Channel, from Moda Midstream LLC, according to a news release.

Terms of the transaction were not disclosed.

Greenhill & Co., LLC acted as exclusive financial adviser to Exolum, and Haynes and Boone, LLP acted as legal counsel. Intrepid Partners, LLC acted as exclusive financial advisor to Moda, and Vinson & Elkins acted as legal counsel. Shearman & Sterling acted as legal counsel to EnCap Flatrock.

ReSource first reported on the sale earlier this year, with valuations coming in at 20x – 25x contracted EBITDA of $13m.

Vopak Moda Houston (VMH) is a joint venture that is 50% owned by Moda Midstream, an EnCap Flatrock Midstream portfolio company, while the remaining 50% interest is owned by Vopak Terminals North America.

Royal Vopak remains as 50% shareholder in the new joint venture.

The acquisition will enable Exolum to establish a key presence in the U.S. Gulf Coast with existing ammonia logistics infrastructure. The terminal and its partners are currently developing one of the most advanced low-carbon ammonia production and export projects worldwide, with targeted annual throughput capacity of 1.1 million tonnes and 70,000 tonnes of additional storage capacity permitted.

The acquisition of Moda’s interest in VMH will be another step forward in Exolum’s diversification strategy and will position Exolum as a leading manager of infrastructure and decarbonizing fuel in the decades to come. The investment in VMH will serve as a platform for Exolum’s development in the U.S. and the acquisition of key competences in the development of the logistics infrastructures required by the energy transition in order to boost low-carbon fuels.

Exolum’s CEO, Jorge Lanza, highlighted that “Exolum strives to become a key player in the development of supply chains for new sustainable energy products, such as ammonia and green methanol. This operation, our first in the U.S., will enable us to continue strengthening our position in strategic ports and to promote the energy transition and the decarbonization of mobility at an international level”.

Moda Midstream President & CEO Jonathan Ackerman said, “I am proud of the collaboration and hard work among the Moda, Vopak and Vopak Moda Houston teams as we transformed a greenfield site into a brand-new liquids terminal in the Port of Houston. I am excited to see how Vopak Moda Houston will build upon its solid foundation to expand and pursue growth opportunities with global storage leader Exolum as its new partner”.

Maria Ciliberti, Vopak president US and Canada: “I am very pleased with Exolum entering as co- shareholder. By pooling our knowledge, network and experience we can further develop this strategically located terminal and marine infrastructure. The worldwide movement to decarbonize industry and transportation will drive strong global demand for low-carbon ammonia. Our joint venture entity situated on the Houston Ship Channel is very well positioned and can serve a critical role in the energy transition, not only for the USA but also for export markets”.

VMH is the only existing waterborne ammonia terminal on the Houston Ship Channel with a Very Large Gas Carrier (VLGC)-capable deepwater berth and is strategically connected via pipeline to the Port of Houston’s petrochemical complex, the largest petrochemical hub in the U.S. and the world’s second largest. The facility currently provides ammonia and natural gas liquid (NGL) storage services.

The facility’s location, large-scale export capabilities, extensive experience in management and ample undeveloped acreage offer new growth opportunities for further development. In October 2023, VMH announced its plans to build a new large-scale, low-carbon ammonia export facility in collaboration with INPEX Corporation, based in Tokyo, Air Liquide Group, based in Paris, and LSB Industries, Inc., based in Oklahoma City.

Ammonia is widely expected to become a driver for decarbonization due to its ability to reduce emissions in hard-to-decarbonize sectors, including power generation, heavy industry, marine fuel, and other mobility methods. With the ability to safely and reliably store and transport ammonia and other pressurised gasses, VMH will be a great contributor to the energy transition supply chain.

With its state-of-the-art ammonia terminal infrastructure and workforce that is ideally located on the Houston Ship Channel, VMH is positioned to become the leading hydrogen and low-carbon ammonia hub on the U.S. Gulf Coast and to facilitate the acceleration of energy decarbonization globally, according to the release.

The transaction, which is subject to customary regulatory reviews and approvals is expected to close in the first quarter of 2024.

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Mitsubishi laying groundwork for additional equity raise

Mitsubishi Power Americas and its JV partners are preparing to raise additional equity for the ACES Delta project in Utah, as well as for other hydrogen developments in the Americas.

Mitsubishi Power Americas is conferring with its financial partners to raise equity from existing investors in the Advanced Clean Energy Storage (ACES) Delta green hydrogen project in Utah, Senior Vice President, Investment and Business Development Ricky Sakai said in an interview.

Haddington Ventures formed Haddington ESP I and raised $650m in June 2022 from institutional investors to fund projects developed by ACES Delta, which is a joint venture between Mitsubishi Power Americas and Haddington portfolio company Magnum Development.

The investors — AIMCo, GIC, Manulife Financial Corporation, and Ontario Teachers’ Pension Plan Board — have additional rights to increase their collective investment to $1.5bn, according to a press release announcing the deal.

The first phase of the project in Utah will be to produce 100 tons of hydrogen per day. Once that is complete, existing investors can scale up their investment, Sakai said.

ACES Delta rendering

Mitsubishi is involved in several regional hydrogen hubs applying for funding from the US Department of Energy.

Hydrogen capable

Depending on how that $7bn is ultimately allocated, Mitsubishi is interested in replicating the Utah project in other regions, a source familiar with the company said.

MPA and Magnum recently closed on a $504.4m loan guarantee from the DOE for ACES Delta, electrolyzers for which will be supplied by Norway-based HydrogenPro.

ACES Delta will support the Intermountain Power Agency’s IPP Renewed Project — upgrading to an 840 MW hydrogen-capable gas turbine combined cycle power plant using Mitsubishi’s M501JAC gas turbines. The plant will initially run on a blend of 30% green hydrogen and 70% natural gas starting in 2025 and incrementally expand to 100% green hydrogen by 2045.

Mitsubishi is also supplying the hydrogen-capable gas turbines to Entergy’s Orange County Advanced Power Station; to an Alberta coal plant owned by Capital Power; and to J-Power’s Jackson Generation Project in Illinois, which reached commercial operations last year.

Mitsubishi Power

Investing in startups

Mitsubishi is doubling down on a strategy of investing in startup producers and technology in renewable fuels, Sakai said.

Recent investments in the space include: C-Zero, a drop-in decarbonization tech startup in California; Cemvita Factory, a Houston-based synthetic biology firm focused on the decarbonization of heavy industries; Infinium, an electrofuels company innovator in California forming decarbonization solutions for industries in Japan; and Starfire Energy, a modular green ammonia solution provider in Denver.

Series A and Series B valuations for US companies are much higher now than they were a few years ago, Sakai said. Still, the US is the leading climate tech startup ecosystem in the world and provides rich opportunity for capital deployment, Sakai said. Biofuels, SAF and waste-to-energy are leading sectors for MHI investment moving forward.

“We have several hundred of these in the pipeline that we are looking at right now,” he said. “In the next few years, we will increase the number of these portfolio companies.”

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Turnt up about turndown ratios

Optimizing electrolysis for renewables depends not just on how far you can turn the machine up, but how far you can turn it down. We asked electrolyzer makers: how low can you go?

Optimizing electrolysis for renewables depends not just on how far you can turn the machine up, but how far you can turn it down.

A consensus is growing around the importance of turndown ratios for electrolyzers, with a variety of use cases for green hydrogen requiring the machines to be run at low levels during periods of high power pricing.

Proton exchange membrane (PEM) electrolyzers are known for their ability to quickly ramp production up and down, but manufacturers of all stripes have begun to tout their technologies’ turndown ratios, with implications for capital costs and the levelized cost of producing hydrogen from renewable power.

Simply put, some electrolyzer plant operators will likely seek to lower hydrogen production during periods of high power pricing, since the cost of electricity is the largest operating expense. But cycling the electrolyzers completely off and on can lead to added system degradation, giving importance to the ability of the machines to run at low levels.

A study from the National Renewable Energy Laboratory (NREL) analyzes a US grid buildout through 2050, noting favorable locations and seasonality for power pricing as something of a guideline for green hydrogen development. The study notes that the lowest achievable turndown ratio is a main factor in minimizing hydrogen levelized cost along with the number of hours a system can operate at that minimum level – something that applies to all types of electrolyzers.

“When you start to look at hourly costs from the data in different locations, you see that all of this renewable buildout is going to create opportunities in given locations where you going to have a lot of renewable generation and not a lot of load on the system and that’s going to drive the cost for that energy down,” said Alex Badgett, an author of the study at NREL.

To be sure, the fast-moving technological environment for electrolysis leaves open the possibility for efficiency gains and disruptive innovation. And a variety of factors – balance of plant, energy efficiency, system degradation – also influence plant economics. But the lowest possible turndown ratios will drive opportunities for green hydrogen developers, Badgett said.

ReSource reviewed available spec sheets for electrolyzer providers and asked every maker of PEM and SOEC systems to detail the turndown capabilities of their machines. Alkaline electrolyzers were left out of the analysis given their more limited load flexibility, as their separators are less effective at preventing potentially dangerous cross-diffusion of gasses. Some manufacturers are fully transparent regarding turndown ranges while others declined to comment or did not reply to inquiries.

‘Not trivial’

In designing projects, developers are analyzing hourly energy supply schedules and pairing the outlook with what is known about available technology options.

“Some electrolyzers like to operate at half power, and others like to operate at full power, and in any given system, you can have between 10 and 50 electrolyzers wired and plumbed in parallel,” said Mike Grunow, who leads the Power-to-X platform at Strata Clean Energy.

“Our thought process even goes down to: let’s say you have to operate the H2 plant at 25% throughput. Do you operate all of the electrolyzers at 25%, or do you turn 75% of the electrolyzers off and only operate 25% at full power?”

The difference in the schemes, he added, is “not trivial as each technology has different efficiency curves and drivers of degradation.”

Different use cases for the hydrogen derivative, meanwhile, lead to different natural selection of technologies, Grunow said, adding that the innovation cycle is now happening every 12 months, requiring a close eye on advances in technology. 

Electrolyzer start-up Electric Hydrogen, a maker of PEM electrolyzers, is commercializing a 100 MW system that can turn down to 10%, according to Jason Mortimer, SVP of global sales at the company.

HyAxium, another start-up, can turn its system down to 10%, according to its materials. Norway-based Hystar, which recently announced plans to build a plant in the US, also promotes a 10% turndown ratio.

A more established PEM electrolyzer provider, Cummins, advertises turndown ratios of 5% for its machines. Sungrow Power, a China-based manufacturer, similarly advertises 5% for PEM electrolyzers.

Siemens Energy has a minimum turndown ratio per stack of 40%, but for a single system it can be less in exceptional cases, according to Claudia Nehring, a company spokesperson.

“We focus on large systems” – greater than 100 MW – “and currently consider this value to be appropriate, taking into account the optimization between efficiency, degradation and dynamics, but are working on an improvement,” she said via email.

ITM Power declined to provide details but said its turndown capabilities are “to be expected” for a market leader in this technology. Materials from German-based H-Tec Systems note a modulation rate down to 10%.

Additional PEM makers Nel, Ohmium, Elogen, H2B2, Hoeller Electrolyzer, Plug Power, Shanghai Electric, and Teledyne Energy Systems did not respond to requests for information.

PEM alternatives

Other forms of electrolysis can also ramp dynamically. And some project developers point to PEM’s use of iridium, part of the platinum metals family, as a drawback due to potential scarcity issues.

Verdagy, for example, has developed an advanced alkaline water electrolysis (AWE) system called eDynamic that it says takes the best of PEM and alkaline technologies while designing out the downsides.

The company’s technology “addresses the barriers that limited traditional AWE adoption by using single-element cells that can operate efficiently at high current densities,” executives said in response to emailed questions. 

“The ability to operate at very high current densities, coupled with a balance of stack and balance of plant optimized for dynamic operation, allow Verdagy’s electrolyzers to operate across a very broad range spanning 0.1-2.0 A/cm2,” they said.

In other words, the machine can turn down to 5%, part of the design that enables operators “to modulate production to take advantage of time-of-day pricing and/or fluctuations in energy production.”

Meanwhile, German-based Thysenkrupp Nucera, another maker of advanced water electrolyzers, advertises a 10% turndown ratio.

SOEC

A relatively new electrolysis technology, the solid oxide electrolyzer cell has also proven to be capable of low turndown ratios. Solid oxide electrolysis is particularly attractive when paired with high-temperature industrial processes, where heat can be captured and fed back into the high-temperature SOEC process, making it more efficient.

Joel Moser, the CEO of First Ammonia, said he chose SOEC from Denmark-based Haldor Topsoe in part because the machines can be turned completely off with no degradation, as long as you keep them warm.

“Generally speaking we expect to ramp up and ramp down between 100% and 10%,” he said. “We can turn them off as long as we keep them warm, and then we can turn them right back on.”

Still, SOEC systems are not without challenges.

“Low stack power and high operating temperature, which in turn requires more ancillary equipment to operate the electrolyzer, are widely viewed as the main drawbacks of SOEC technology,” according to a report from the Clean Air Task Force, which explores SOEC technology and its commercial prospects. “SOEC systems are also considered to have a shorter operating life due to thermal stress.”

Additional makers of SOEC machines Bloom Energy, Ceres, Elcogen, Genvia, SolydERA, and Toshiba did not respond to inquiries.

At NREL, researchers are watching for more automation and scale in the electrolyzer production process to bring costs down. Increasing efficiency through balance-of-plant improvements is another opportunity to reduce system costs.

In addition, more analysis of how large electrolyzer projects will impact the future electrical grid is required, according to Badgett.

The NREL team modeled the hourly marginal cost at any given time in any location in the US, but the model assumes that the electrolyzer takes energy without impacting the cost of energy.

“When we start to get to gigawatt-scale electrolysis,” he said, “that’s going to significantly impact prices, as well as how the grid is going to build out.”

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Denbury to transport CO2 for Louisiana blue methanol project

A subsidiary of Denbury Inc. will transport and store CO2 for a planned blue methanol plant in Lake Charles, Louisiana.

Denbury Carbon Solutions has executed a 20-year definitive agreement to provide CO2 transportation and storage services to Lake Charles Methanol in association with that company’s planned 3.6 MMPTA blue methanol project, according to a press release.

LCM’s facility will be located along the Calcasieu River near Lake Charles, Louisiana, approximately 10 miles from Denbury’s Green Pipeline.

The facility is designed to utilize Topsoe’s SynCORTM technology to convert natural gas into hydrogen which will be synthesized into methanol while incorporating carbon capture and sequestration.

The process is anticipated to deliver more than 500 million kilograms of hydrogen per year as a feedstock to produce the 3.6 MMTPA of blue methanol.

LCM is finalizing its major permits to begin construction. The project is expected to reach a Final Investment Decision in 2023 with first production anticipated in 2027.

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