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Canadian fuel producer nixes plans for renewable diesel complex

The company cited rising project costs, lack of market certainty for renewable fuels, and the potential for added capacity due to the Inflation Reduction Act as reasons for the decision.

Parkland Corporation, a Canadian fuel producer and distributor, has cancelled plans to build a renewable diesel complex in British Columbia.

Citing market conditions, the company said in a news release that it will not proceed with the standalone facility at the Burnaby Refinery.

Several factors have impacted the competitiveness of the renewable diesel complex, according to the release, including rising project costs, a lack of market certainty around emerging renewable fuels and the US Inflation Reduction Act of 2022, which advantages US producers.

On an earnings call this morning, Parkland CEO Bob Espey said the company is waiting to see how the renewable diesel market evolves.

“The biggest change in our business in the renewables space has been the IRA,” he said. “And what we’ve seen is there will be a lot of investment in new capacity, and we’re just not sure how the market is going to shake out here in the medium term.”

Parkland remains committed to its low carbon journey and will continue to extend its low carbon fuel innovation and leadership by expanding co-processing at the Burnaby Refinery to 5,500 barrels per day, the release says. Co-processing forms part of Parkland’s commercial decarbonization strategy to provide its customers with a portfolio of low carbon products and services to help them meet their low carbon goals.

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Eversource to record $1.6bn impairment, nears sale of offshore wind stakes

Eversource Energy expects to record an impairment of up to $1.6bn in connection with its offshore wind holdings, and is nearing a deal to divest its ownership of the assets to a global infrastructure investor.

Eversource Energy expects to record a substantial impairment charge in the fourth quarter of 2023, primarily due to increased costs and uncertainties in its offshore wind projects. The company is also in advanced talks to divest its 50% ownership in three major offshore wind projects: South Fork Wind, Revolution Wind, and Sunrise Wind​​.

The anticipated impairment charge, in the range of $1.4 to $1.6bn, arises from revised project construction costs and supply chain constraints, particularly in installation vessels and foundation fabrication. These challenges have led to a significant decrease in the fair value of these projects, according to the company. Additionally, the denial of Sunrise Wind’s petition by the New York State Public Service Commission to amend its Offshore Renewable Energy Credit (OREC) contract has contributed to the impairment. This decision impacts Sunrise Wind’s involvement in New York’s renewable energy solicitation and necessitates renegotiation of the OREC agreement at a revised price, further contributing to the impairment expected to be in the range of $600m to $700m for Sunrise Wind alone​​.

Eversource is negotiating with a leading global private infrastructure investor to sell its stake in these projects. While the final terms are still under discussion, Eversource aims to promptly announce the details upon reaching a definitive agreement. This potential divestiture is subject to regulatory approvals and other conditions, including partnership agreements with Ørsted, Eversource’s joint venture partner​​.

Joe Nolan, Eversource’s Chairman, President, and Chief Executive Officer, commented on the challenges faced by the offshore wind industry, noting significant supply chain disruptions and inflationary pressures.

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JERA Americas completes modifications for hydrogen firing at NJ power plant

Hydrogen co-firing of up to 40% (by volume) will be possible at Linden Unit 6.

JERA Co. has completed modification of the gas turbine at Linden Gas Thermal Power Station Unit 6 in the United States to enable the use of hydrogen, making possible the co-firing of natural gas with hydrogen-containing off-gas generated at the adjacent oil refinery, according to a news release.

Because it will require the procurement of hydrogen at an economically rational price and the development of carrier technology, it is expected to take some time before hydrogen can be used for power generation in Japan. By working to resolve such issues and advancing the use of hydrogen at power plants in areas where hydrogen is already available, JERA seeks to accumulate technical capabilities and experience that can be applied to future power generation projects both at home and abroad.

JERA had previously decided to move forward, through JERA Americas Inc., with modification of the gas turbine at Linden Unit 6 to enable co-firing with hydrogen-containing off-gas supplied by Bayway Oil Refinery, which is owned by the major US oil refiner Phillips 66.

With the completion of this work, hydrogen co-firing of up to 40% (by volume) will be possible at Linden Unit 6. The effective use of hydrogen-containing off-gas sourced from the adjacent oil refinery is expected to reduce CO2 emissions at both Unit 6 and the oil refinery.

Under its “JERA Zero CO2 Emissions 2050” objective, JERA has been working to eliminate CO2 emissions from its domestic and overseas businesses by 2050. By leveraging its strengths across the entire value chain from upstream fuel development through power generation, working actively to develop decarbonization technologies, and seeking to ensure economic rationality, JERA will continue its efforts to achieve zero emissions going forward.

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Air Liquide and Siemens inaugurate Berlin electrolyzer factory

With one gigawatt currently, the companies expect a ramp-up to annual production capacity of three gigawatts by 2025.

Air Liquide and Siemens Energy officially inaugurated their joint venture gigawatt electrolyzer factory today in Berlin.

The mass production of electrolyzer components will allow the manufacturing of low-carbon hydrogen at industrial scale and competitive cost, and foster an innovative European ecosystem. The gigawatt factory will ramp-up to an annual production capacity of three gigawatts by 2025, according to a news release.

Located in Berlin, the new manufacturing site inaugurated today spans over 2,000 square meters. It leverages automation and robotics for the series production of Proton Exchange Membrane (PEM) electrolyzer modules, the main component of the electrolyzer. The PEM modules offer a high degree of efficiency and are particularly adapted to an intermittent renewable energy supply.

With one gigawatt currently, Air Liquide and Siemens Energy expect a ramp-up to annual production capacity of three gigawatts by 2025. Once produced, the assembly of the modules to be implemented in electrolyzer projects can be carried closer to the project sites, contributing further to the cost effectiveness of the solution.

The strategic partnership benefits from a portfolio of hydrogen projects combining both Air Liquide and Siemens Energy’s pipelines, targeting large industrial-scale projects worldwide in collaboration with customers.

In Europe, a number of low-carbon and renewable hydrogen projects are already under development. In Oberhausen, Germany, the Air Liquide’s Trailblazer 20 MW large-scale electrolyzer project is reaching completion and aims to accelerate the decarbonization of the Rhine-Ruhr industrial basin. Near Port-Jérôme, France, the Air Liquide Normand’Hy 200 MW electrolyzer project is the largest PEM electrolyzer under construction, avoiding the emission of 250,000 tonnes of CO2 per year. Both groups are working on several other large-scale electrolyzer projects, such as Siemens Energy’s ones in Kassø (Denmark) or FlagshipONE (Sweden), which will provide hydrogen for the synthesis of efuels for shipping.

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Hydra Energy raising equity and debt capital for hydrogen refueling infrastructure

The hydrogen-as-a-service provider for commercial trucking fleets is pursuing an equity raise that will unlock a debt facility for scaling up hydrogen refueling infrastructure in Western Canada.

Hydra Energy, a hydrogen-as-a-service provider for commercial trucking fleets, is in the midst of a CAD 14m equity capital raise.

The Vancouver-based company is pursuing the equity raise in support of its Prince George hydrogen fueling station, which is set to be operational in 2024 and would be the largest in the world, Hydra CEO Jessica Verhagan.

The equity portion of the financing is needed to unlock an additional CAD 150m debt facility to complete initial scale-up of the company’s planned hydrogen corridor along Highway 16 in Western Canada, Verhagan added.

Verhagan said the company is not working with a financial advisor on the capital raise but could issue RFPs for advisory services in the future. She declined to name the provider of the proposed debt facility, apart from clarifying that it was not government-sponsored.

“To date, Hydra has been signing up commercial fleets and building out its initial hydrogen refuelling infrastructure throughout Western Canada, but the company is about to announce expansion throughout the rest of the country via licensing to a national fossil fuel distributor looking to extend its low-carbon alternative fuel offerings,” the executive said via email.

Hydra’s target market to date has been the roughly 5 million Class 8 trucks within North America, Verhagan said, with the company aiming to “conservatively” capture 1% of that market by 2030 through commercial discussions already underway. Hydra is also exploring expansion into the UK as well as Europe, Australia, and the Middle East.

“Hydra’s initial focus has been on proving out its Hydrogen-as-a-ServiceTM (HaaSTM) template which includes the company providing its proprietary hydrogen-diesel, co-combustion conversion kits to commercial fleets at zero cost (in exchange for long-term hydrogen fuel contracts at diesel equivalent prices) as well as an initial hydrogen refuelling station to service 65 Hydra- converted trucks in Prince George, B.C.,” she said.

Verhagan said the company will announce its first electrolysis partner for the Prince George hydrogen refueling station early next year. The station will be able to refuel – as quickly as diesel – up to 24 Hydra-converted trucks each hour across four bays. The station will provide hydrogen from two onsite, 5 MW electrolyzers powered with electricity from BC Hydro.

“The adoption of Hydra’s technology really comes down to availability of low carbon hydrogen – showing fleets it’s possible to go green cost-effectively – and government support to utilize hydrogen to reduce trucking emissions right now,” Verhagan said.

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TC Energy executive talks hydrogen strategy

Canadian midstream giant TC Energy recently unveiled it was pursuing 10 hydrogen projects across North America. To learn more we caught up with Omar Khayum, a vice president at the company in charge of hydrogen project development.

TC Energy is evaluating 10 blue and green hydrogen hubs across North America, viewing incumbency as a significant competitive advantage.

The company is looking to use hydrogen as a means of providing a larger basket of low-carbon solutions to customers, according to Omar Khayum, a TC Energy vice president who is in charge of hydrogen project development. That basket includes mature power generation assets like wind, solar and pumped hydro, Khayum said in an interview, as well as additional firming resources, renewable natural gas, and carbon capture.

“We have a continental platform of customers that are in oil & gas and heavy industry that are looking to decarbonize their existing feedstock,” he said.

TC Energy is partnering with end-use customers, adding capabilities into the partnerships, and sharing in both the risk and benefit of the projects, he said.

“Our incumbency really allows us to partner with end users, and identify customer solutions,” Khayum said. “That’s our business model around de-risking what is a newer form of energy solution.”

Khayum declined to specify where the 10 hydrogen projects are located, other than to say they are proximate to industrial load – existing steelmaking, power plants, chemical facilities and refineries – and are not on the Gulf Coast. TC Energy has announced one project in Alberta which involves an evaluation of its Crossfield gas storage facility and would entail generating 60 tonnes of hydrogen per day with capacity potentially increasing to up to 150 tonnes per day.

In some cases, TC Energy is partnering with the end-use customer to jointly develop the hydrogen projects, Khayum said. “We are the lead developer in most cases but we’re not managing all of the risk ourselves – we’re putting together coalitions with organizations that have upstream and downstream capabilities to make sure we de-risk effectively.”

While conducting project management, TC will use external EPC firms and OEMs to deliver projects, depending on the location and technology in use, Khayum said.

Project funding

As for funding the projects, Khayum said the business model for hydrogen looks similar to the model for liquefied natural gas projects. “We have a wide degree of flexibility in how we can finance projects,” he said, noting the availability of project financing as well as the option to fund projects from TC Energy’s balance sheet.

“We have a number of financial advisors engaged to ensure that as we develop the projects from the offtake agreements to the supply chain agreements – and everywhere in between – those contracts are bankable to provide us the optionality to use project financing,” he said.

Khayum believes that the project finance market is still about 12 months away from being ready to finance hydrogen projects. “That’s because we are one of the early movers in hydrogen development and, as such, we’ll be bringing forward to the marketplace some of the first bankable offtake and supply chain contracts along with risk management tools and activities.”

He noted there was still work to be done among underwriters to validate those contracts for bankability. “We are working over the next year to not only get our projects to FID but working in tandem with our financial advisors to enable the banking system to accommodate those transactions.”

Much of the underwriting requirements have already been well-established in LNG, he noted. “If we can manage risk in a similar fashion,” he added, “we think it will be much more expeditious to achieving a positive FID.”

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Denver green ammonia firm prepping series C capital raise

A green ammonia developer and technology provider is laying the groundwork for a series C capital raise later this year, and still deliberating on a site for its first project.

Starfire Energy, a Denver-based green ammonia producer, is wrapping up a series B capital raise and laying the groundwork for a series C later this year, CEO Joe Beach said in an interview.

The company completed a $6.5m series A in 2021 and finished a $24m series B last year. Investors include Samsung Ventures, AP Ventures, Çalık Enerji, Chevron Technology Ventures, Fund for Sustainability and Energy, IHI Corporation, Mitsubishi Heavy Industries, Osaka Gas USA, Pavilion Capital and the Rockies Venture Club.

Beach declined to state a target figure for the upcoming raise. The firm has not used a financial advisor to date.

Starfire is currently deliberating on locations for its first production facility to come online in 2026, Beach said. Colorado is a primary contender due to ammonia demand, while the Great Plains offer abundant wind energy.

The firm’s strategy is to use renewable energy and surplus nuclear power from utilities to create ammonia from hydrogen with no storage component, eliminating the problems associated with hydrogen storage and transportation.

Targeted offtake industries include agriculture, maritime shipping and peaking power fuel consumption.

“The demand is global,” Beach said, stating that he expects about 150 leads to convert to MOUs. “We get inbound interest every week.”

For future capital raising, Beach said the company could take on purely financial investors, as it already has a long list of strategic investors.

“The expectation is we will wind up with manufacturing plants around the world,” Beach said.

The “new petroleum”

Many hydrogen production projects have been announced worldwide in the last year.

Beach said he expects many of those to transition into ammonia production projects, as ammonia is much easier to export.

Now, Starfire is working on developing its ammonia cracking technology, which converts ammonia into an ammonia/hydrogen blend at the point of use for chemical processes. The final product form in that process is 70% ammonia, 22.5% hydrogen and 7.5% nitrogen – all free of emissions.

The company is using proceeds of its series B capital raise to develop its Rapid Ramp and Prometheus Fire systems. Rapid Ramp uses a modular system design for the production of green ammonia using air, water, and renewable energy as the sole inputs. Prometheus Fire is an advanced cracking system that converts ammonia into hydrogen, operating at lower temperatures than other crackers and creating cost-effective ammonia-hydrogen blends that can replace natural gas.

The advantage to using this technology is that it makes the export of a hydrogen product financially feasible, Beach said.

“You should see ammonia becoming the new petroleum,” he said of the global industry. Ammonia can be deployed internationally like oil and provide the dependability of coal.

Eventually Starfire will undergo a financial exit, Beach said. Likely that will mean an acquisition, but an IPO is also on the table.

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