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Canadian hydrogen-as-a-service developer signs trucking offtake MoUs

Hydra Energy has signed detailed MoUs with eight new commercial truck fleets operating in British Columbia, and continues to pursue equity and debt capital supporting a refueling station and hydrogen corridor.

Canadian hydrogen-as-a-Service developer Hydra Energy has achieved another significant milestone in its Prince George, British Columbia project rollout by signing detailed MOUs with eight new commercial truck fleets in the region.

This represents 82 Class 8 trucks to be retrofitted using Hydra’s proprietary hydrogen-diesel, co-combustion conversion technology, according to a news release.

Once converted by Hydra installation partner, First Truck Centre, these trucks will refuel at the world’s largest hydrogen refuelling station Hydra is currently building in Prince George to be operational in 2024 which leverages green hydrogen produced on site by two 5 MW electrolysers powered with hydroelectricity.

These new fleet commitments and supporting hydrogen infrastructure from Hydra will make this the largest commercial deployment of hydrogen-diesel co-combustion transportation vehicles in the world as Hydra continues to fast track emissions reductions in the hard-to-abate trucking sector.

Hydra continues to work on the closing of a CAD 14m equity capital raise with several parties interested, with proceeds supporting the development of the Prince George project, a Hydra spokesperson said in response to inquiries.

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, Hydra Energy CEO Jessica Verhagen told ReSource last year.

“Upon signing our first commercial fleet customer in Prince George and breaking ground on our local refuelling station last year, we had an initial goal to secure 65 heavy-duty trucks to leverage the new station once operational next year. We’re pleased to surpass this target with the signing of these eight fleets highlighting the continued interest in hydrogen trucking and the benefits it delivers for fleets of all sizes, even with heavy payloads in challenging weather and road conditions like those found in Northern B.C.,” Verhagen said in today’s release. “Securing immediate offtakers for our station’s low-carbon hydrogen is another critical piece in our Prince George HaaS blueprint illustrating to potential investors and licensees how hydrogen supply and demand can profitably come together. We look forward to working with First Truck Centre to start converting these trucks about six months prior to our station’s opening and to continuing to work with the City of Prince George as the flagship stop in the Western Canadian Hydrogen Corridor we’re building between the B.C. Coast and Edmonton.”

The eight companies who have signed MOUs represent a range of fleet sizes and types of heavy-duty trucks highlighting the cost effectiveness of Hydra’s HaaS business model and the platform agnostic nature of the company’s dual-fuel conversion technology. For example, Arrow Transportation Systems is a leader in bulk commodity hauling, reload operations, and freight management serving North America and according to Jacob Adams, their Manager of Optimization and Sustainability, “is excited about the potential opportunity to collaborate with Hydra on hydrogen-converted trucks.”

Added Annie Horning, CEO of Excel Transportation, a Prince George-based transport and logistic service company for the forestry industry who also signed an MOU, “Once we heard about the progress Hydra has been making on their hydrogen refuelling station right in our own backyard, the fact their hydrogen wouldn’t cost us more than diesel, and that it would cost nothing to retrofit our trucks to run cleaner and more efficiently, we couldn’t pass on the opportunity. Hydra allows us to make a positive difference sooner than later while eliminating our range anxiety concerns that could impact our service reliability.”

Hydra’s Service Delivery Lead, Ilya Radetski, elaborated, “In addition to Arrow and Excel, we also signed MOUs with Edgewater Holdings, Wilson Bros. Enterprises, Burke Purdon Enterprises, Godsoe Contracting, Keis Trucking, and Peace Valley Industries who all service the Prince George and Northern B.C. region. We also continue to have ongoing discussions with additional local fleets who are keen to explore how hydrogen can benefit them. These contracted offtakers now complete the final piece of our initial HaaS regional model which, as mentioned, also includes an installation partner, hydrogen production, and then the hydrogen refuelling station. This forms an easily reproducible template for licensing companies along the hydrogen value chain who want to see their hydrogen supply or infrastructure come to market at scale in the most profitable way possible, in Canada and beyond.”

“Hydra is an example of a company that tailors their solution to this region instead of using a one-size-fits-all approach. Their technology can work in the cold and doesn’t affect payload or power. We continue to watch their exciting progress locally and support their efforts in helping Prince George diversify its economy and improve air quality,” added Prince George Mayor, Simon Yu.

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Technology in focus: Avnos’ hybrid direct air capture uses water instead of heat

By using water captured from the atmosphere to regenerate its CO2-capturing sorbents, Avnos hopes to cut the operating costs of direct air capture plants and lower barriers to deployment.

One of the challenges of direct air capture (DAC), the new technology that promises to extract carbon dioxide (CO2) directly from the air all around us, is that it needs a lot of energy, and thus costs a lot of money. Currently, different types of DAC technologies require between 6 and 10 gigajoules per ton of carbon dioxide captured, according to the International Energy Agency.

The key to making a new DAC technology successful therefore is cutting energy needs and costs. Avnos, a Los Angeles-based carbon removal company, is trying to accomplish this by developing what it calls hybrid direct air capture (HDAC), backed by $36m in Series A funding closed in February, and over $80m in strategic and investment partnerships, announced in July

Avnos’ process is described as “hybrid” DAC because it captures both CO2 and water, as humidity, from the atmosphere at the same time. 

“In a generic DAC process, heat is critical to separating the captured CO2 from its ‘sponge,’ or sorbent, and regenerating that sorbent so that a plant may operate cyclically,” Avnos co-founder and CEO Will Kain said in an interview. “By contrast, Avnos uses a reaction enabled by the water it sources from the atmosphere to regenerate its sorbents. The impact of this use of water in the place of heat lowers the operating costs of an Avnos plant and lowers the barriers to deployment.” 

Less heat means less energy, which means companies using Avnos’ technology will have to compete less than regular DAC to access carbon-free energy sources and will have more flexibility in terms of where to put their facilities. 

“Unlike peer DAC companies who build and operate their hardware, our product is designed to be licensed and operated by any company committed to decarbonization and allows them to upgrade, modularly, as the tech advances over the long term,” Kain told ReSource

Avnos has an active pilot plant in Bakersfield, California, funded by the Department Of Energy and SoCal Gas. The plant began operating in November 2023, and it can capture 30 tons of CO2 and produce 150 tons of water annually. 

The company is also in the process of building a second pilot plant with the U.S. Office of Naval Research to pilot CO2 capture and e-fuels production – Avnos does not currently produce e-fuels, but sustainable aviation fuels producers could use its technology to source water and CO2, and it partners with sustainable aviation investors like JetBlue Ventures and Safran. 

Additionally, it is going to use money from its recently announced round of funding to open a research and development facility outside New York City, and it says it’s involved in four of the developing DAC hubs that were selected for funding awards by the DOE: the California Direct Air Capture Hub, the Western Regional DAC Hub, the Pelican-Gulf Coast Carbon Removal, and a fourth undisclosed one.

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German IPP secures €500m financing facility from EIG

The facility is expected to support ILOS’s plans to generate more than 2 GW of power through solar and battery projects by 2026, but also contemplates the deployment of capital to co-located battery storage and hydrogen.

ILOS Projects, a Pan-European Independent Power Producer (IPP) sponsored by Omnes, today announced the signing of a €500m structured credit facility with EIG, an institutional investor in the global energy and infrastructure sectors.

The facility is expected to support ILOS’s plans to generate more than 2 GW of power through solar and battery projects by 2026. The facility comprises an initial tranche of €250m and includes an accordion that would increase the loan amount by an additional €250m. Additional financing terms were not disclosed.

The facility is intended to accelerate ILOS’s growth toward becoming a leading Pan-European IPP, with loan proceeds available to provide construction equity and acquisition capital for ready-to-build assets. Initially, ILOS intends to focus on projects in Ireland, the UK, the Netherlands, Greece and Italy, but the facility also contemplates the deployment of capital in other OECD jurisdictions as well as in co-located battery storage and hydrogen.

Akereos Capital acted as sole bookrunner, structurer and exclusive debt advisor to ILOS. Allen & Overy served as legal advisor to ILOS and Milbank served as EIG’s legal advisor.

Rob Johnson, managing director and global head of direct lending at EIG, said, “We’re thrilled to support ILOS in these exciting growth initiatives as they work to expand their footprint across Europe. This transaction is a testament to our confidence in the management team, their strategy and ILOS’s sponsors, and it underscores EIG’s commitment to investing in high-quality assets and energy infrastructure that support a low-carbon future.”

Michael Pollan, partner at Omnes, said, “ILOS has seen tremendous growth over the last two years. We are proud to continue supporting the company as it works toward this ambitious IPP project. We also look forward to partnering with EIG, a leader in the energy infrastructure sector that shares our common values and strategic view.”

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Canadian IPP evaluating H2 production, carbon capture in Alberta

A carbon hub will use existing infrastructure along with new hydrogen production.

Canadian independent power producer Heartland Generation will evaluate hydrogen production and carbon sequestration as part of its Battle River Carbon Hub (BRCH) project, according to a press release.

BRCH will use existing infrastructure at Heartland’s Battle River Generating Station (BRGS) in Alberta, along with new hydrogen production to generate electricity.

The BRCH project also includes an open-access carbon sequestration hub, proximate to the BRGS, that will capture and sequester carbon emissions from Heartland Generation, and other industrial sources in the region.

The company was selected by the Government of Alberta as part of the Carbon Sequestration Tenure Management process.

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Developer Profile: Green hydrogen developer finds strength in numbers

Clean Energy Holdings is assembling a coalition of specialized companies as it seeks to break into the novel green hydrogen market.

Nicholas Bair draws a direct line from his childhood on an Oregon dairy farm to the coalition of specialized companies that, as the CEO of Clean Energy Holdings, he is now assembling in pursuit of key-player status in the green hydrogen industry.

“We created our own milk from our own hay,” he says, of his family’s organic dairy farm in Klamath Falls, near the California border. He adds, using an expression he often repeats: “Everything was inside the battery limits.”

This phrase – “inside the battery limits” – represents what Bair, who is forty-one and a chemist by trade, is trying to achieve with The Alliance: a broad, self-contained battery of partners with specialized competencies working in coordination on the challenges of developing and operating groundbreaking green hydrogen projects.

“We’re doing everything from soup to nuts,” he says.

CEH and The Alliance are planning to build roughly $1bn worth of projects per year over the next ten years, Bair says. As a launching point, the parties are advancing a green hydrogen facility – called Clear Fork – near Sylvester, Texas that would churn out 30,000 kg per day in phase 1 starting in 4Q24. The hydrogen would be produced using electrolyzers powered by a 325 MW solar farm, while ancillary facilities at the site would be powered by a gas turbine capable of blending up to 70% hydrogen.

As members of The Alliance, Equix Inc. is acting as the EPC for the solar and gas turbine portion of the project, while Chart Industries is providing tankers, trailers, and liquefaction to transport hydrogen from the site in northwest Texas. Meanwhile, Hartford Steam Boiler – an original contributor to standards written by the American Society of Mechanical Engineers – will provide quality assurance and control; Coast 2 Coast Logistics is responsible for trucking; and The Eastman Group provides permitting and facilities management.

‘First-of-kind’

Although a renewable project, the green hydrogen concept is similar to most refinery EPC contracts, since many of them are first-of-kind with significant liquidated damages, Bair says. Additionally, the green hydrogen projects are “married to renewables, and you need the cryogenics and the distribution in between.”

Before starting Clean Energy Holdings, Bair was the founder and CEO of Bair Energy, a program and construction manager for infrastructure and energy projects – a service that Bair Energy is providing as a member of the Alliance. A period of low natural gas prices made Bair Energy’s specialty – geothermal power – less competitive, and Bair, seeking to develop his own projects instead of managing projects for others, sought to branch out into new types of energies.

Bair Energy itself consists of professionals that have been cherry-picked from the industry, Bair says. Candice McGuire, a veteran of Shell and Technip, is Bair’s chairman; chief operations officer John Strawn recently joined from Technip; and wind-industry veteran Peder Hansen has joined as VP and chief engineering manager.

“Our experience on the team is taking first-of-kind, developing it, and getting it to market,” he says. With The Alliance, “We went out and found the best at what they do, put them on lump-sum order, and brought them to the table early to figure out how to make their product talk to the other person’s product, so we can have a guarantee,” he says.

What distinguishes Clean Energy Holdings from other green hydrogen developers is, in fact, the coalition it is building, says Elizabeth Sluder, a partner at Norton Rose Fulbright who is CEH’s legal advisor.

“It’s intended to be one-stop shopping in a vertically integrated structure such that as and when needed for future CEH projects or third party projects that are identified, you have all the various players you need to take it from point A to point B,” she adds.

Because the parties are on standby with a common goal, CEH and its partners can provide lump-sum turnkey services, with some element of bulk pricing potentially factored in, because savings are generated through not having to issue RFPs for partners in future projects.

“The savings in time and money is, I would expect, very valuable,” Sluder says. “And when you apply those principles to long-term strategy and equity investment-type opportunities, the lower capex spend should theoretically benefit the project at large.”

Keeping the pieces moving

Bair runs CEH alongside Co-Founder and President Cornelius Fitzgerald. The two met as children – Fitzgerald was raised on a nearby cattle farm in southern Oregon – and enjoy the uncommon chemistry of childhood friends.

In something of classic pairing, “I’m much more the trumpet, paving the path,” Bair says, while Fitzgerald “usually keeps the pieces moving.”

“Sometimes Cornelius has had the best cup of coffee and takes the lead in meetings. And sometimes I do,” he says. “It’s that ability to rely on each other that set the basis of design in my mind for what a good partner looks like.”

Fitzgerald says they approach the challenge of breaking new ground in green hydrogen with “quiet confidence and humility.” By having a big picture vision as well as “credible and tangible fundamentals for the project” – like land, resource, and water control – the project moved from an idea to a reality, he adds.

“And really we’ve been driving at how to get the best experience and expertise at the table as early as possible,” Fitzgerald says.

Equix, Inc, a civil engineering firm, joined the grouping to build the solar and gas generation portion of the facility, representing the company’s first-ever foray into a hydrogen project, says Tim LeVrier, a vice president of business development at the firm.

“There are many challenges integrating all these types of power sources and energy into creating hydrogen,” Levrier says. “From an electrical engineering standpoint it is extremely challenging to coordinate power switching from one source to another. Another consideration we are having to work through is what to do in regards to producing hydrogen at night. Will there be a battery portion to the project or do we just not produce hydrogen when it is dark? These are all things we are considering and will have to find creative solutions for.”

‘Pathological believer’

CEH recently added Chart Industries to The Alliance, which in addition to furnishing liquefaction, tanks and trailers to move hydrogen, will provide fin fans for cooling and a reverse osmosis system for cleaning water. “We don’t want to give away all our secrets,” Bair says, “but it’s a very efficient process.”

The unique perspective and expertise of partners in The Alliance makes for a fulsome ecosystem around any CEH project, says Jill Evanko, CEO of Chart Industries. With respect to CEH’s projects, Evanko says they are “very targeted, which, with focus, will continue to help evolve the hydrogen economy.”

“Chart’s hydrogen liquefaction process as well as associated hydrogen equipment including storage tanks and trailers” – which the company has been manufacturing for over 57 years – “will be sole-source provided into the project. This will allow for efficient engineering and manufacturing to the CEH Clear Fork project schedule,” she says.

In any molecule value chain, hydrogen included, Chart serves customers that are the producers of the molecule, those who store and transport it as well as those who are the end users, Evanko adds. “This allows us to connect those who are selling the molecule with those who need it.”

Looking ahead, CEH is preparing to meet with investors in the lead-up to an April, 2023 final investment decision deadline for the Texas project. And it is being advised by RockeTruck for another RFP seeking fuel cell vehicles to transport hydrogen from the site as the trucks become available – a design that will likely include hydrogen fueling stations at the production facility as well as at the Port of Corpus Christi, Bair says.

CEH also has plans to develop its own geothermal plants and explore the role that nuclear energy can play in green hydrogen. Bair Energy recently hired Eric Young as its VP of engineering and technology from NuScale, where he worked on the research team that received approvals from the U.S. Nuclear Regulatory Commission for a small modular nuclear reactor.

“We’re a technology-driven owner-operator,” Bair says. “We’re all technologists, which means we’re pathological believers in technology. We’re all looking for transformational energy.”

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Exclusive: Ambient Fuels options land in Texas

Ambient Fuels recently entered into an option agreement to purchase land in Texas. Among only a handful of green hydrogen developers to attract equity capital last year — from Generate Capital — Ambient has not yet made public announcements about its projects or locations. 

Ambient Fuels, a green hydrogen developer backed by Generate Capital, recently signed a 24-month option to purchase a plot of land in Chambers County, Texas, according to filings made with the clerk there.

A memorandum outlines the option to purchase land in Mont Belvieu, to the east of Houston. The agreement is effective as of October 2, according to the filing.

Ambient declined to comment.

According to the ReSource project tracker, Ambient has been involved in three Gulf Coast hydrogen hub efforts: The Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES) hub; the Port of Corpus Christi Green Hydrogen Hub; and the Horizons Clean Hydrogen Hub (HCH2). ARCHES was selected for DOE funding.

ReSource reported in June that Ambient Fuels had begun to evaluate potential acquisitions of hydrogen projects that are under development.

In May, 2023, Generate Capital, a sustainable infrastructure investment and operating company, made an investment into Ambient, including a commitment to fund up to $250m of green hydrogen infrastructure.

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Exclusive: Ammonia plant sale paused until commercial operations

The sale process for a Texas ammonia plant has been paused until the facility reaches commercial operations.

Gulf Coast Ammonia, the developer of a world-scale ammonia plant in Texas City, Texas, has paused a sale process until the plant reaches commercial operations, according to two sources familiar with the matter.

The process to sell the plant, which will produce 1.3 million tons of ammonia per year, was underway earlier this year, led by Jefferies as sellside advisor. The plant was expected to reach COD in 2023, according to documentation.

The project was initiated by Agrifos Partners LLC and advanced to FID in collaboration with joint venture development partners Mabanaft and Macquarie Capital. Following the FID taken in late 2019, GCA is wholly owned by a joint venture of Mabanaft and Lotus Infrastructure (formerly known as Starwood Energy).

GCA is investing $600m towards the construction, operation, and ownership of the ammonia plant, which is situated on land owned by Eastman Chemical Company within Texas City’s industrial park. It includes a portion of Eastman’s port access. 

In tandem with the ammonia plant construction, Air Products is building a $500m steam methane reformer to provide hydrogen to the plant via pipeline. Air Products noted in a recent investor presentation that the SMR project recently came onstream.

Officials at Lotus, Mabanaft, and Jefferies did not reply to inquiries seeking comment.

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