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Biomass-to-energy company breaks ground on California project

The $25.7m plant is expected to be operational by spring of 2024 and will supply 3 MW of power under a contract with PG&E.

California-based bioenergy company West Biofuels broke ground this week on a power generating facility in Shasta County that will burn wood waste from surrounding forests.

The $25.7m plant is expected to be operational by spring of 2024 and will supply 3 MW of power under a contract with PG&E.

The plant, called Hat Creek Bioenergy, will need about 75 tons of wood waste, or about four truckloads daily, to keep running, according to a report from the Redding Record Searchlight, citing company executives.

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H2 Green Steel raising debt and equity for hydrogen-powered steel plant

H2 Green Steel has received support from multiple European financial institutions for its EUR 3.5bn debt financing and will build a green steel plant through a combination of equity and debt.

H2 Green Steel has received support from multiple European financial institutions for its EUR 3.5bn debt financing and will finance the construction of a green steel plant through a combination of equity and debt, according to a news release.

Conditional commitment letters for EUR 3.3bn in senior debt have been secured from AB Svensk Exportkredit and the commercial banks BNP Paribas, ING, UniCredit, Societe Generale and KfW IPEX-Bank.

Societe Generale is acting as lead financial advisor on senior and junior debt facilities. KfW IPEX-Bank is acting as joint financial advisor on a senior debt facility. BNP Paribas, ING and UniCredit are acting market, documentation and technical banks, respectively.

The money supports the company’s hydrogen-powered green steel plant in Northern Sweden through debt and credit guarantees.

The European Investment Bank has received board approval for EUR 750m of senior debt funding for the project as well, while eading export credit agencies, including Euler Hermes, have issued letters of intent to provide export credit-linked guarantees of EUR 1.5bn of H2 Green Steel’s intended senior debt.

The Swedish National Debt Office has issued a letter of intent to provide a green credit guarantee of EUR 1bn of H2 Green Steel’s senior debt.

H2 Green Steel has executed a conditional commitment letter with a leading infrastructure fund comprising large Nordic investors in connection with their lead participation in a circa EUR 500m junior debt facility.

This milestone has been enabled by a due diligence process that was initiated in 4Q21.

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Dallas PE firm adds two partners from Navigator CO2 Ventures

Dallas-based private equity firm Cresta Fund Management has hired two new operating partners from Navigator CO2 Ventures, a BlackRock-backed CO2 pipeline effort that was recently cancelled, according to a news release.

The new hires are Eric Leigh and Jim Mullin. Leight helped lead business development and carbon capture and sequestration (CCS) origination activities for Navigator and drove the firm’s strategy for environmental attributes as the Executive Director of Carbon Supply and Markets.

Mullin previously served as the Executive Director of Carbon Utilization for Navigator and helped commercialize carbon utilization and educate stakeholders on carbon sequestration and utilization markets and solutions.

Mullin and Leigh’s energy and carbon capture industry experience is expected to provide a key addition to Cresta’s Sustainable Fund Series, in particular Lapis Energy, Cresta’s CCS-focused portfolio company.

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Exclusive: Texas ammonia developer raising project capital

A developer of large-scale green ammonia projects is in the process of raising $2.5bn in equity and debt for a project in Texas, while also seeking a development partner for 1 GW of co-located renewable generation.

Avina Clean Hydrogen, the multi-faceted developer of green hydrogen and ammonia projects, is raising some $2.5bn in debt and equity for its green ammonia project in Nueces County, Texas, CEO Vishal Shah said in an interview.

The firm, which is based out of Short Hills, New Jersey, has hired an investment bank, Shah said, declining to name the advisor. The raise is targeting a variety of strategic and financial investors with a roughly 60/40 split between equity and debt for the 800,000 mtpy green ammonia facility outside of Corpus Christi, known as Nueces Green Ammonia.

Avina is advancing four more projects, in addition to Nueces Green Ammonia, which is slated for FID in 2Q24, Shah said.

California compressed green hydrogen project is approaching COD in the second half of this year; Avina Northern Illinois will reach FID this year; and additional projects in SAF and methanol are in the works.

The company is also in talks with renewables developers to supply 1 GW of renewable generation co-located with Nueces Green Ammonia.

“We are trying to bring a lot of these first-of-a-kind large scale projects to fruition,” Shah said. “There are more opportunities down the line for additional capital.”

Nueces Green Ammonia, a subsidiary of Avina, has applied for a water permit with the Water and Control District Three of Nueces County in Texas, a local official told ReSource.

The permit, for 4.5 million gallons per day of potable water and 1 million gallons per day of raw water, was recently filed with the office in Robstown, Texas, the official said. The company has also acquired land to the north of Robstown, Texas.

Corpus Christi city council members voted last week to approve a seawater desalination plant – producing 30 million gallons per day – that will be a critical source of water for the growing clean fuels industry in the region.

Avina, via Nueces Green Ammonia, filed for a separate permit to construct the facility with the Texas Commission on Environmental Quality.

ReSource reported in April, 2023 that the company was auditioning advisors for a capital raise.

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CO2-to-SAF firm in $100m capital raise

A New York-based CO2-to-SAF firm is raising about $100m in equity and debt.

Dimensional Energy, the CO2-to-SAF startup based in Ithaca, New York, is in the late stages of a roughly $100m equity and debt round led internally, according to a source familiar with the matter.

The company is down to a shortlist of potential investors with two or three weeks until targeted close, the source said.

Dimensional did not respond to a request for comment.

Proprietary reactor technology powered by renewables is the core of Dimension’s regenerative process. According to its website, the company can make 15 barrels of fuel from every 10 tons of carbon sources form the atmosphere and hydrogen derived form electrolysis.

In May, the company signed an offtake agreement for 5 million gallons per year with Boom Supersonic, which is seeking to build a supersonic airliner that will travel at speeds twice as fast as today’s commercial jets.

Dimensional started production at a pilot-scale COutilization plant in Tucson, Arizona last year.

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Green hydrogen developer in active discussions for California FID this year

A green hydrogen developer is in active discussions with counterparties as it pursues a final investment decision for its first project.

Houston-based green hydrogen developer Element Resources is in active discussions to reach FID this year on its first green hydrogen project slated for Lancaster, California.

The company had engaged Houlihan Lokey in recent months to lead a capital raise for the project, according to two sources familiar with the matter. The Houlihan mandate had involved raising non-dilutive debt, a process that is believed to have been shelved, said one of the sources.

“We are steadily working our way to an FID this year and are pulling together all parts of the project,” Element CFO Avery Barnebey said via email in response to inquiries. He declined to comment further.

A Houlihan representative did not respond to an email seeking comment.

The Lancaster facility, which is targeted to begin commercial operations in early 2025, will be built on 1,165 acres and consist of 135 MW of solar-powered electrolysis capacity, according to the company’s website. At full capacity, the 18,750 mt per annum of hydrogen produced by the facility will serve the growing demand for clean mobility fuels as well as clean energy for manufacturing.

Element is led by founder and CEO Steve Meheen, an oil & gas industry veteran. Barnebey is a former director of corporate development at California Resources Corporation.

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Advisor Profile: Cameron Lynch of Energy & Industrial Advisory Partners

The veteran engineer and financial advisor sees widespread opportunity for capital deployment into early-stage renewable fuel companies.

Cameron Lynch, co-founder and managing partner at Energy & Industrial Advisory Partners, sees prodigious opportunity to pick up mandates in the hydrogen sector as young companies and early movers attract well-capitalized investors looking for auspicious valuations.

The firm, a three-year-old boutique investment banking outfit with offices in New York and Houston, is broadly committed to the energy transition, but is recruiting for new personnel with hydrogen expertise, Lynch said, adding that he is preparing for a new level of dealmaking in the new year.

“I think we can all expect 2023 will be even more of a record year, just given the appetite for hydrogen,” Lynch said. “Hydrogen is one of our core focuses for next year.”

Cameron Lynch

Lynch started his career as a civil & structural engineer and moved into capital equipment manufacturing and leasing for oil & gas, and also industrial gasses –things like cryoge

nic handling equipment for liquid nitrogen. He started the London office of an Aberdeen, U.K.-based M&A firm, before repeating that effort in New York.

Founding EIAP, Lynch and his business partner Sean Shafer have turned toward the energy transition and away from conventional energy. The firm works on the whole of decarbonization but has found the most success in the hydrogen space.

Earlier lifecycle, better valuations

Hydrogen intersects with oil& gas, nuclear, chemicals, midstream companies, and major manufacturing.

Large private equity funds that want to get into the space are realizing that if they don’t want to pay “ridiculous valuations for hydrogen companies” they must take on earlier-stage risk, Lynch said.

Interest from big private equity is therefore comparatively high for early-stage capital raising in the hydrogen sector, Lynch said, particularly where funds have the option to deploy more capital in the future, Lynch said.

“They’re willing to take that step down to what would normally be below their investment threshold.”

Lynch, who expects to launch several transactions in the coming months with EIAP, has a strong background in oil & gas, and views hydrogen valuations as a compelling opportunity now.

“It’s very refreshing to be working on stuff that’s attracting these superb valuations,” Lynch said.

There’s a lot of non-dilutive money in the market and the Inflation Reduction Act has been a major boon to investors, Lynch said. For small companies, getting a slice of the pie is potentially life changing.

Sean Shafer

The hydrogen space is not immune to the macroeconomic challenges that renewables have faced in recent months and years, Lynch said. But as those same challenges have accelerated the move toward energy security, hydrogen stands to benefit.

Supply chain issues post-COVID pose a potential long-term concern in the industry, and equity and debt providers question the availability of compressors and lead times.

“I would say that’s one of the key issues out there,” Lynch said. There’s also the question of available infrastructure and the extent to which new infrastructure will be built out for hydrogen.

EIAP sees the most convincing uses for hydrogen near term in light-weight mobility and aerospace, Lynch said. The molecule also has a strong use case in back-up generation.

Hydrogen additionally presents companies in traditional fossil fuel verticals the opportunity to modernize, Lynch said, citing a secondary trade EIAP completed earlier this year

California’s Suburban Propane Partners acquired a roughly 25% equity stake in Ashburn, Virginia-based Independence Hydrogen, Inc. The deal involved the creation of a new subsidiary, Suburban Renewable Energy, as part of its long-term strategic goal of building out a renewable energy platform.

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