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Canadian developer raises seed capital for Alberta ammonia project

HCC intends to develop a world-scale, low-carbon hydrogen/ammonia production facility in the Alberta Industrial Heartland near Fort Saskatchewan, Alberta.

Hydrogen Canada Corp. has closed a $10m seed round and signed a letter of commitment on an offtake agreement with E1 Corporation, to develop a low-carbon hydrogen/ammonia supply chain from Western Canada to South Korea and other Asian markets.

HCC intends to develop a world-scale, low-carbon hydrogen/ammonia production facility in the Alberta Industrial Heartland near Fort Saskatchewan, Alberta, according to a news release.

“This project represents an opportunity to use cost advantaged, low carbon natural gas in Alberta to support the decarbonization of South Korea and other Asian countries and to provide a level of energy security to those countries as well,” said Bryan Moon, Hydrogen Canada’s president. “Access to cost effective carbon sequestration also creates a material strategic advantage for this project in Alberta’s Industrial Heartland. Our partner, E1 Corporation, is major trader of LPG in Asia, including significant volumes of Canadian LPG and it recognizes the marketability of low cost, reliable energy products sourced from western Canada“.

The government of South Korea has committed to Net Zero by 2050 and is seeking to reduce its carbon emissions by 40% by 2030. South Korea has stated that it believes that the use of hydrogen and ammonia for power generation and mobility will support those efforts. South Korea already has one of the largest fleets of hydrogen cars and refueling stations in the world and continues to expand that market. The South Korean government is putting in place long term energy plans to support the adoption of hydrogen and ammonia in energy generation to reduce the carbon footprint and is running auctions for the long-term supply of hydrogen for fuel cells through the Korean Power Exchange. Alberta is currently one of the leading areas in Canada for production of ammonia and HCC’s Project is another opportunity to support development of a hydrogen and low-carbon economy.

“Drawing from its extensive LPG industry expertise and inherent strengths, E1 is positioning itself as a leading supplier of clean ammonia, hydrogen, and LPG in South Korea,” said E1 Corporation Chairman JY Koo. “The foundation for this ambitious endeavor lies in the partnership with Hydrogen Canada Corp., which promises to deliver cost-effective, low-carbon hydrogen and ammonia to South Korea, made possible by Canada’s abundant and affordable natural gas resources, a robust CCUS infrastructure, and the strategic advantage of shorter maritime routes from Western Canada to the Far East.”

Initial feasibility studies with respect to the Facility have been completed by HCC and the facility has an anticipated design capacity of approximately one million tonnes per annum of low-carbon ammonia. The facility is also planning to utilize innovative technology to capture and permanently sequester a significant amount of the CO2 emissions. The low-carbon ammonia will be transported via rail to Canada’s West Coast and then shipped to South Korea and other Asian markets.

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Clean Energy and Maas partner for 9 RNG newbuilds

Financed by Clean Energy, the nine sites are forecasted to cost approximately $130m in total.

Clean Energy Fuels Corp., the largest provider of the cleanest fuel for the transportation market, and Maas Energy Works, the nation’s largest dairy digester developer, have entered a new joint development agreement to build nine renewable natural gas (RNG) production facilities at dairy farms across seven states.

The new partnership will include dairies located in Colorado, South Dakota, Georgia, Florida, Iowa, Nebraska and New Mexico, and will collect the manure from a combined herd size of approximately 35,000 cows preventing the methane emissions from entering the atmosphere, according to a news release.

The nine projects, each subject to finalizing diligence before beginning construction, are expected to be completed in 2026 and will produce up to an estimated 4 million gallons of ultra-clean RNG annually, a negative carbon-intensity transportation fuel which will make its way into Clean Energy’s nationwide network of RNG stations.

Industry pioneer Maas Energy Works has completed over 60 dairy digester projects over the past decade. The team specializes in lagoon cover digesters which involve a large tarp over a manure lagoon to capture the methane emissions. This process makes these facilities significantly less expensive to build and operate compared to tank digesters seen at other RNG plants. Financed by Clean Energy, the nine sites are forecasted to cost approximately $130 million in total.

“This JV brings together expertise from a seasoned RNG developer and producer and Clean Energy’s extensive RNG distribution network and growing RNG customer base. We are excited to continue our long working relationship with the team at Maas Energy Works to get these facilities online and producing pipeline quality RNG to help supply our transportation fleet customers with clean fuel to help them meet their sustainability goals,” said Clay Corbus, senior vice president at Clean Energy.

“This joint venture is clear proof that family farms paired with private businesses are an unstopped force in achieving decarbonization. If the markets for renewable fuels are clear and consistent, then American’s biogas industry will deliver. We will soon be capturing fugitive manure emissions and turning them into carbon-negative truck fuel with our partners at Clean Energy,” said Daryl Maas, CEO of Maas Energy Works.

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Advanced Ionics takes investment from heavy industry giants

The Wisconsin-based company will use proceeds from a Series A to deploy its new electrolyzer technology to early customers.

Electrolyzer developer Advanced Ionics has closed a $12.5m Series A financing led by bp ventures, with Clean Energy Ventures, Mitsubishi Heavy Industries, and GVP Climate, according to a news release.

The capital will facilitate the initial deployment of the Symbio water vapor electrolyzer technology for heavy industry. The electrolyzer reduces the cost and electricity requirements for green hydrogen production by integrating with standard industrial processes to harness available heat.

“The system is made of widely available steels and other simple materials rather than expensive metals or materials common in other electrolyzers,” the release states.

Advanced Ionics will use the funds to expand its team and deliver the electrolyzer systems to early customers. The company is in a pilot program with Repsol Foundation. Bp will also be exploring pilot opportunities with Advanced Ionics.

Other investors in the company include Aster, and angel investor collectives Clean Energy Venture Group and SWAN Impact Network.

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Mining giant Anglo American invests $200m in merger with Seattle-based First Mode

The newly combined business, valued at $1.5bn, will pursue zero-emission haulage solutions for mining and other heavy industries. First Mode is working on providing critical mine site infrastructure for hydrogen production, battery recharging, and hydrogen refueling.

First Mode, a global carbon reduction company focused on heavy industry, and global mining company Anglo American have signed a binding agreement to combine First Mode and Anglo American’s nuGen™ zero emission haulage solution to accelerate the transition of mining and other heavy industries to diesel-free futures, according to a news release.

The transaction, which is expected to close in January 2023, values the newly combined business in the order of $1.5bn and includes a $200m equity injection from Anglo American.

Upon closing of the transaction, First Mode will enter into a global supply agreement to supply several nuGen™ systems to Anglo American which includes the retrofit of approximately 400 ultra-class haul trucks with First Mode’s proprietary hybrid fuel cell battery powerplant and related infrastructure. The supply agreement includes the appropriate provision of critical supporting infrastructure such as refueling, recharging, and facilitation of hydrogen production. The roll-out of nuGen™ across Anglo American’s haul truck fleet over the next 15 years is subject to certain conditions and required approvals.

Previously announced in June 2022, the transaction is a unique combination of creative engineering excellence and mining expertise which brings together the existing First Mode business with Anglo American’s nuGen™ related intellectual property, management, and operational teams. First Mode is now uniquely positioned to commercialize the nuGen™ haulage solution which intelligently incorporates new technology into mine site operations and consists of a powerplant with appropriate hybridization of hydrogen powered fuel cells and battery (depending on customer and site requirements), refueling and recharging technology, clean energy production and storage, modification of diesel electric vehicles, digital integration with mine site systems as well as ongoing services.

The investment will facilitate the rapid global growth of First Mode, development of production facilities in Seattle and new proving grounds in Centralia, Washington, support staffing goals worldwide, develop our footprint in Perth, Australia, and speed the commercialization and deployment of First Mode clean energy solutions to market.

On close, Anglo American will become a majority shareholder of First Mode, with the balance continuing to be held by First Mode employees. In addition, current First Mode President and CEO, Chris Voorhees will transition to the role of Chief Product & Technology Officer, overseeing the company’s global product and technology development out of Seattle. Julian Soles, Anglo American’s head of Technology Development, will take over as First Mode CEO and be based in First Mode’s new headquarters in London.

“First Mode was founded in 2018 with the goal of building the barely possible. We have done just that and our mission is now to rapidly decarbonize heavy industry by dramatically reducing our customers’ greenhouse gas emissions. I can’t imagine a team better suited to this urgent challenge,” said Chris Voorhees.

“The First Mode mission is much bigger than a single haul truck,” said Julian Soles. “Mining is how the world obtains the materials needed for the clean energy transition, and it is where the carbon footprint starts. This is where the First Mode solution begins; starting at the source, in mining, to replace diesel and accelerate the clean energy transition.”

The world’s first proof-of-concept including renewable energy generation, hydrogen production and refueling, and an ultra-class haul truck, launched in May 2022, continues to be operated at Anglo American’s Mogalakwena platinum group metals mine site in South Africa. This month the truck reached a significant milestone when it completed initial commissioning and was introduced into the mine’s commercial fleet operations, including pit and crusher activities.

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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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Exclusive: Carbon capture firm raising $1.2bn for ammonia facility

A carbon capture and technology firm is conducting a FEED study for a blue ammonia facility it expects will cost some $1.2bn in traditional project finance. The company also has a pipeline of biomass-to-electricity (or “biome”) projects in the works.

8 Rivers Capital, the North Carolina-based carbon capture and technology firm backed by South Korea’s SK, Inc., is planning to raise some $1.2bn for its first ammonia production facility in Texas, Chief Development Officer Damian Beauchamp said in an interview.

The firm is conducting a FEED study for its Cormorant blue ammonia facility in Port Arthur, Texas, which will be finished in October, Beauchamp said. The firm is not using a financial advisor.

The money will be raised in a 30/70 split between equity and debt, he said. SK will take 100% of the facility’s production. 8 Rivers anticipates bringing the facility online in 2027 or 2028.

The company will seek to maintain significant ownership in its ammonia facilities. Once the FEED is finished on one the firm will start another until the company has completed between 10 and 20 of these facilities, Beauchamp said.

“We have the ambition to dominate the ammonia/zero carbon fuels space,” Beauchamp said.

‘BIOME’

In a new vertical start of electricity generation production, 8 Rivers is now scouting locations to develop its first biomass-to-electricity generation facilities in the US, Beauchamp said.

The projects, referred to as “biome” by the firm, will use forestry biomass as a feedstock in plants up to 250 MW in size. Unlike ammonia, 8 Rivers will not seek to keep ownership in an IPP play, but rather solicit co-investment from utility and industrial offtakers.

The southeastern US is a region of particular interest, Beauchamp said, because of a long growing season, the abundance of feedstock from timber, lumber and paper product producers, and proximity to existing CO2 management and transport infrastructure.

“That’s our general focus area for that first project,” he said of the deep south of Texas, Mississippi, Louisiana and Alabama.

The strategy is to take on strategic ownership partners – utilities and industrial powers users — as early as possible to finance development, he said. Large entities, including foreign utilities, could also take ownership interest in projects, not dissimilar from investment in LNG facilities.

Projects will likely cost $1bn and up, and the firm anticipates having the first progressing in earnest by 2029. Eventually 8 Rivers seeks to develop a portfolio of four or five of these projects at 250 MW each along with additional projects of a smaller size, Beauchamp said.

The first project should also be able to sell 2.7m tonnes of carbon credits per annum, Beauchamp said.

8 Rivers’ Calcite technology was announced as a winner of the Department of Energy’s Direct Air Capture (DAC) Hub grant, as an anchor technology in the Alabama regional DAC hub led by Southern States Energy Board.

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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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