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Bear Head nets environmental approval for green hydrogen/ammonia project

Bear Head Energy has received environmental approvals for a Nova Scotia green hydrogen and ammonia production and storage facility.

Bear Head Energy, a developer of a green hydrogen and ammonia production and storage facility in Nova Scotia, has received approvals from the province’s Minister of Environment and Climate Change.

Bear Head will construct a green ammonia facility in phases depending on the availability of renewable power, with first ammonia estimated to occur by mid-2028. A final investment decision is planned by the end of 2024.

Backed by IFM Investors-owned Buckeye Partners, Bear Head Energy now sits within a newly launched subsidiary of Buckeye focused on energy transition assets, BAES Infrastructure.

The project is within the Point Tupper Industrial Park, where another green ammonia project — with EverWind Fuels as the proponent — recently received environmental approvals.

At full build out and peak power inflow, the Bear Head facility could produce 350,000 tonnes of hydrogen and 2 million tonnes of ammonia per year. Peak power at full build out could be as high as 3 GW including 2 GW of electrolyzer capacity. Hydrogen production is based on 2,860 MW average power input with about 70% of the incoming power (2,000 MW) consumed by the electrolysers and 30% (860 MW) consumed in the Haber Bosch unit, ASU, utilities and balance of the plant.

The facility will be located within the footprint of the previously approved, but not fully constructed, Bear Head LNG Project, and would include electrolysis units for green hydrogen production, air separation units for nitrogen generation, Haber-Bosch ammonia synthesis units, ammonia bulk storage tanks, and a marine terminal plus associated infrastructure, the filing says.

More than $150m has been invested in engineering and site development, according to the project website, including roads, drainage, site leveling and pouring of LNG tank foundations.

Approximately 15 million liters of water/day on average (4 million US gallons of water/day) will be required by the facility and will be supplied to the site via pipeline from the Landrie Lake Water Utility, which has regulatory approval for an allowable daily withdrawal limit of 36 million liters per day. Power supply for the project will be provided from renewable power via the grid and/or direct power connection from primarily new onshore and/or potential future offshore renewable energy projects

Buckeye Partners, a major midstream energy company in the US, is 100% owned by IFM Investors, a global investment firm.

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Technology in focus: What is direct ocean capture and can it sail?

Bianca Giacobone explores the not-yet-seagoing technologies behind direct ocean capture, and the emerging players seeking to make it a reality.

The largest carbon capture system in the world is the ocean, sucking in about 31% of CO2 emissions from the atmosphere, which makes it “the world’s greatest ally against climate change.” As a matter of fact, it sucks in so much CO2 that it’s becoming too acidic, endangering its ecosystems along the way. 

In the ongoing frenzy to find as many pathways to reverse climate change as possible, scientists and developers are looking to take full advantage of the ocean’s natural carbon sink qualities, while hopefully restoring it to its original, less-acidic state. Direct ocean capture (DOC) removes CO2 from seawater directly, through electrochemical-based methods or calcium looping.

It still hasn’t been deployed on a large scale, but it’s catching the eye of investors, despite not having been blessed by federal subsidies like its sister technology, direct air capture (DAC).

Los Angeles-based Captura, for example, recently announced it has raised over $30m in a Series A funding round from backers like Maersk Growth and Eni Next, while Deep Sky, a Canadian carbon removal developer with partnerships with both Captura and its competitor Equatic, raised CAD 75m ($55.6m) late last year. 

Much like direct air capture, DOC holds a big advantage in that there’s plenty of CO2 and seawater to go around, making it, theoretically, endlessly scalable. 

But “in many ways, from an engineering standpoint, direct ocean capture seems a better approach to carbon removal, because the medium seawater contains more carbon molecules per unit than air,” David Babson, executive director of the MIT Climate Grand Challenge Initiative, said in an interview. Plus, it can be 100% powered by renewable electricity, whereas direct air capture still requires some heat. 

Not that pursuing one denies the other. 

“We got into this mess of climate change by taking carbon out from underground and putting it into the air and therefore into the ocean,” Phil De Luna, chief carbon scientist and head of engineering at Deep Sky, said in an interview. “In order to reverse that, we have to take CO2 out of both the air and the ocean and put it back underground.”

Deep Sky, according to De Luna, is “an oil and gas company in reverse,” and much like an oil company, it doesn’t develop its technologies, but rather invests in what’s already been brewing, offering partners money, solutions, and potentially a place to store the CO2 once they have it. 

Courtesy of Deep Sky.

Deep Sky looks for four things when selecting a technology to invest in: it has to be fully electrified and easily scalable, and it has to have low energy intensity and a robust and uncomplicated supply chain. DOC is on its way to tick all those boxes and it should be ready for commercial deployment within a decade, according to Babson and De Luna. 

Equatic, one of the companies Deep Sky has partnered with, has two pilot facilities active in Los Angeles and Singapore and is going to announce a larger plant, estimated to remove around 4,000 tons of CO2 per year, in the near future, according to Edward Sanders, Equatic’s chief operating officer. 

Its technology is based on modules the size of 20ft shipping containers, which, placed on the coast and powered by renewable energy, pump in large amounts of seawater, pass an electrical current through it, and then trap the extracted CO2 in solid minerals. 

The modules are replicable, “like solar cell modules,” according to Sanders, an attractive feature for investors, and the CO2 removal happens within their boundaries, which means you can measure and report how much of it you’ve captured. That’s important for figuring out how many carbon credits to sell – since, as it stands, selling carbon credits is the basis of most of these companies’ revenue models.

As a new technology, DOC is expensive and needs to become cheaper to be deployed at a relevant scale. But unlike direct air capture, it cannot, currently, claim tax credits for carbon sequestration both in the United States and Canada. 

The lack of DOC-related subsidies is not an issue for Equatic, which, in addition to removing CO2 from the ocean, also produces around 30 kilograms of green hydrogen per module per day, and is therefore eligible for hydrogen tax credits. Captura, on the other hand, is investing in modules to prove that DOC is, essentially, direct air capture, since “you’re using the surface of the water to capture CO2 from the air, and you’re using this process to remove the CO2 from the water,” according to Babson at MIT. 

Captura declined an interview and did not respond to a request for comment.  

“It’s certainly one of the flaws in the Inflation Reduction Act that it has constraining language around direct air capture specifically, saying that direct air capture gets the credit and nothing else,” Babson said. “That runs afoul of policy 101. It limits the possibilities.” 

The next step is convincing the authorities in charge to include DOC in the technologies eligible for subsidies, which is bound to take some time. 

“Unfortunately,” Babson said, “when it comes to climate change and carbon removal and scaling an enormous negative emissions industry, we just don’t have time.”

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Aemetis projects huge growth

Aemetis, a California-based RNG and renewable fuels producer, projects that it will generate $645m of adjusted EBITDA in 2028.

Aemetis, Inc., a renewable natural gas and renewable fuels company focused on negative carbon intensity products, has released an updated Aemetis five-year plan that projects the company will generate $1.95bn in revenues and $645m of adjusted EBITDA in year 2028.

The 2024 plan states revenues are expected to grow at a compound annual growth rate of 38%, and adjusted EBITDA is expected to grow at a projected compound annual growth rate of 83% for the years 2024 to 2028.

In the Aemetis 2024 Five Year Plan, the company’s revenue and adjusted EBITDA growth is expected from 75 dairies producing RNG by 2028; from a 90 million gallon per year sustainable aviation fuel and renewable diesel (SAF/RD) plant in Riverbank, California; from a CO2 Carbon Sequestration and Underground Storage (CCUS) well located near the Riverbank and Keyes biofuels plant sites in California; from the completion of solar, mechanical vapor recompression and other energy efficiency, carbon emission reduction, and electrification projects at our Keyes biofuels plant; and from the continued expansion of biodiesel and tallow refining production at the Aemetis plant in India. The presentation also describes the tax credits expected to be received by Aemetis from the Inflation Reduction Act (IRA) for its renewable fuel and sequestration projects.

“Through the expansion of our RNG, biodiesel, SAF/RD, CCUS, and ethanol businesses, Aemetis is poised to rapidly grow revenue to almost $2 billion by the end of 2028,” said Eric McAfee, Chairman and CEO of Aemetis.  “Additionally, Aemetis closed $50 million of new USDA funding and received $55 million from the sale of IRA tax credits in the past year.  With strong financing support from the USDA for renewable fuels projects, the passage of the $380 billion Inflation Reduction Act to provide funding to renewable energy projects, and EPA approval allowing 15% ethanol blends in 49 states which expands the ethanol market by almost 50%, the regulatory and financial climate for renewable energy projects continues to support our overall growth plan,” added McAfee.

Significant milestones were achieved in the past year under the previous 2023 Five Year Plan, including the transition to receiving revenue and positive operational cash flow from the biogas-to-RNG upgrading facility and dairy digesters; receiving the Use Permit and CEQA approval for the SAF/RD plant at the Riverbank site; receiving the first private carbon sequestration characterization well drilling permit issued by the State of California; completing construction and commissioning of the 1.9 megawatt solar microgrid with battery backup; installing an Allen Bradley distributed control system with AI capabilities to optimize energy use and other operational performance of the Keyes ethanol plant; completing design engineering and are now procuring equipment for the Mechanical Vapor Recompression (MVR) unit at the Keyes plant to utilize low carbon intensity electricity instead of fossil natural gas; completing deliveries of biodiesel to the Oil Marketing Companies in India under the first $40 million of contracts; and receiving awards for an additional $150 million of allocations from the three India government Oil Marketing Companies to be fulfilled using a Cost-Plus pricing formula.

Due to uncertainties regarding timing, the 2024 Plan does not include several other growth initiatives that are actively under development at Aemetis, including revenues and EBITDA from the planned operation of the 50 million gallon per year capacity, debt-free, India refined tallow plant.  The export of tallow from India to North America customers at approximately $4 to $5 per gallon for 50 million gallons per year, increasing revenues by up to $250 million per year, is excluded.  The 2024 Plan projections include using the refined tallow from India as a feedstock supply source for the operations of the SAF/RD plant under development in California to improve profit margins.

In addition to the $55 million received in Q4 2024 from the sale of transferable tax credits, the Inflation Reduction Act is expected to provide transferable investment and production tax credits to Aemetis related to our U.S. renewable fuels and CO2 sequestration projects, which are included in the 2024 Plan.

The Five Year Plan for Aemetis Dairy RNG operations projects revenues will grow from $18 million in 2024 to $190 million in 2028, while Dairy RNG project EBITDA is expected to expand from $7 million in 2024 to $123 million in 2028. The RNG plan accounts for the delays in receiving LCFS revenue that are caused by the current regulatory process to obtain LCFS pathway approvals for each dairy digester that may be shortened if pending regulatory changes are adopted by the California Air Resources Board.

The Five Year Plan projects that the Aemetis Sustainable Aviation Fuel and Renewable Diesel plant will provide revenue of $672 million with adjusted EBITDA of $195 million in year 2027 from the 90 million gallon plant that received the Use Permit and CEQA approval in September 2023 to be built at the 125-acre Riverbank Industrial Complex which has 100% renewable hydroelectricity; a rail line and storage for 120 railcars; 710,000 square feet of buildings; and 50 acres of developable industrial land.

In connection with the carbon reduction upgrades at the Keyes plant, expansions of the India biodiesel plant, and expanded market opportunities resulting from changes to governmental policies, the Five Year Plan projects that the Company will generate annual revenue from ethanol and biodiesel of approximately $826 million in 2028, up from $368 million of expected revenue in 2024.

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Nuclear-to-hydrogen projects awarded by the DOE

GE and Westinghouse were awarded DOE grants to expand hydrogen production using nuclear energy.

The US Department of Energy (DOE) has awarded $22.1m to 10 industry-led projects, including two aimed at expanding clean hydrogen production with nuclear energy.

General Electric Global Research (Niskayuna, NY) will scale-up co-electrolysis technology to produce a carbon-neutral aviation fuel and demonstrate a conceptual design with an advanced nuclear reactor.

Westinghouse Electric Company, LLC (Cranberry Township, PA) will carry out a series of engineering studies that will provide insights on coupling hydrogen technology with existing nuclear reactors.

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Exclusive: Australian fuels producer looking for US development partners

An Australian fuels producer and concentrated solar power developer partnered with German and US fossil interests is developing its first US clean fuels project in Texas, and is looking for development partners with eyes on the greater southwest.

Vast Energy, the Australia-based and NASDAQ-listed concentrated solar power (CSP) developer and fuels producer, is in the early stages of developing a project near El Paso, Texas – the company’s first in the US – and is seeking US development partners to generate a pipeline of projects throughout the country, CEO Craig Wood said in an interview.

Vast is in process with two projects in Port Augusta, South Australia: VS1, a 30 MW solar/8 MWh storage plant, and SM1, a demonstration solar-to-methanol plant co-located with VS1, producing up to 7,500 mtpa of green methanol from VS1 electricity and heat with extra power available on the grid.

VS1 is scheduled for FID in 3Q24 with FID on SM1 coming the following quarter, Wood said.

Vast recently announced funding agreements with German partner Mabanaft for up to AUD $40m for SM1, after the SM1 project was selected last year as a part of the German-Australian Hydrogen Innovation and Technology Incubator (HyGATE).

Methanol from the $80m SM1 will in part be exported to Germany. Vast is also working with EDF to provide additional financing, Wood said.

“Essentially it’s going to be debt free and on balance sheet,” Wood said.

German container shipping company Hapag-Lloyd recently signed an MOU with Mabanaft to explore options for the supply of ammonia as bunker fuel to Hapag-Lloyd in the Port of Houston.

US opportunity

In the US, where Vast listed to be primed for opportunistic growth, the company has a shortlist of locations around El Paso, has engaged with regional economic development leaders, and held early talks with EPC providers, Wood said.

The El Paso project is being developed in conjunction with Houston-based oil and gas drilling business Nabors Industries, Wood said. Nabors backed the SPAC that took Vast public at a valuation of up to $586m in early 2023. Its current market cap is $64m.

There are ongoing discussions on whether to produce eSAF or methanol in El Paso, Wood said.

To produce eSAF, Vast would use a solid-oxide electrolyzer coupled with the Fischer-Tropsch process, Wood said. Meanwhile, the methanol distillation process lends itself well to Vast’s ability to produce low-cost heat.

CSP has a lower level of embedded carbon than any renewables technology other than wind, Wood said.

“The work that we have done to date indicated that you would most likely power an eFuels project with a CSP plant that was configured to operate in the day and night,” Wood said.

As for project costs, envisioning a project producing some 200 million liters per annum, roughly $3bn would be needed for the power station, and then half that for the infrastructure to make the fuels.

Preliminary offtake for the El Paso project is going to be critical for attracting investment, Wood said. Offtake will depend on the type of fuel produced, though conversations are ongoing with shipping companies (methanol) and airlines (eSAF).

“We’re not expecting to have any problem placing the product,” Wood said. Offtake would likely be targeted for the Port of Los Angeles, LAX airport, the ports of the Gulf Coast, or Dallas Fort Worth International Airport.

Development of CSP makes sense anywhere climate is sunny and hot, Wood said. The company could logically expand into more of West Texas, New Mexico, Arizona and southern California.

The region around Farmington, New Mexico is particularly attractive for CSP development, Wood said. As a huge amount of coal-fired capacity in that area is retired, those interconnections, workforces and resources are ripe for repowering.

The turbines that one of those coal fired power stations would have is the same turbine at the core of Vast’s technology, Wood said. One difference is that Vast’s can be turned on and off quickly.

Development partnerships 

There is an opportunity for Vast to find a development partner, or partners, to stand up a pipeline of projects in two to three years’ time, Wood said.

“Almost everyone wants to wait until our project in Port Augusta reaches COD,” Wood said. “But we don’t want to wait that long to be developing projects in the US.”

Vast is capable of building CSP plants, which can be configured to operate in the day and night, co-located with existing larger-scale solar pv to provide additional generation and, critically, storage, Wood said. By directing sunlight to receivers and heating molten salt, CSP can store energy for 12-to-20 hours overnight to alleviate solar pv’s intermittency issues.

“Coming along and essentially retrofitting complementary CSP next to those [pv plants], we think is a very sensible way to go, both in terms of shared cost but also in terms of managing incremental transmission build,” Wood said. “We’re looking for people we can have conversations with.”

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exclusive

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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exclusive

Low-carbon crude refinery developer lining up project cap stack

The developer of a low-carbon crude refinery is in talks with banks and strategics to line up project financing for a $5.5bn project in Oklahoma.

Texas-based Southern Rock Energy Partners is holding discussions with banks and potential strategic investors with the aim of shaping a $5.5bn capital stack to build a low-carbon crude refinery in Cushing, Oklahoma.

The project, a first-of-its-kind 250,000 barrel-per-day crude refinery, would make it the first crude facility of that size built in the United States in several decades.

The company is evaluating a project finance route with a debt and equity structure for the project, and has held talks with several major investment banks as well as “industry-leading” strategics in midstream, industrial gas, and electricity generation, Southern Rock Managing Partner Steven Ward said in an interview.

In support of the refinery, the city of Cushing and the Cushing Economic Development Foundation approved $75m in tax-exempt private activity bonds, Ward noted. He added that the company could also tap industrial revenue bonds as well as PACE equity financing.

Seed capital for project development has so far come from strategic partners, some of which are operational partners, Ward said. He declined to comment further on the capital raise, noting that engagement letters have yet to be signed.

Engineering firm KBR is conducting a feasibility study for the Cushing project, and the company is moving through land acquisition, air permit preparation, and EPC selection, Ward said.

While most crude refineries consume natural gas, off-gasses, and ambient air, Southern Rock’s proposed refinery would use oxygen along with blue hydrogen produced from the refining off-gasses and green hydrogen from electrolysis. The process would eliminate 95% of greenhouse gas emissions at the proposed refinery.

“Our furnaces and our process heating units are fed 100% hydrogen and oxygen,” Ward said, noting that this type of system does not currently exist in the market. The company is expanding on technology it licenses from Great Southern Flameless, he said.

The size of the refinery would make it the largest to be built in the US since Marathon Petroleum built a 200,000 barrels-per-day facility in 1976.

Certain other low-carbon crude projects have been in the market for several years. Meridian Energy has been seeking to build cleaner crude refineries in North Dakota. Raven Petroleum ran up against environmental concerns while seeking to build a clean refinery in Texas. And MMEX is aiming to build an “ultra clean” crude refinery in West Texas.

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