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Chevron acquires majority interest in ACES Delta

ACES Delta is developing the Advanced Clean Energy Storage project in Delta, Utah. Chevron last year backed out of its plans to acquire a stake in the joint venture.

Chevron U.S.A. Inc., through its Chevron New Energies division, announced it has closed a transaction with Haddington Ventures to acquire 100% of Magnum Development, LLC (Magnum Development) and thus a majority interest in ACES Delta, LLC (ACES Delta), which is a joint venture between Mitsubishi Power Americas, Inc. (Mitsubishi Power) and Magnum Development, according to a news release.

ACES Delta is developing the Advanced Clean Energy Storage project in Delta, Utah.

Chevron last year backed out of its plans to acquire a stake in the joint venture.

The Advanced Clean Energy Storage project plans to use electrolysis to convert renewable energy into hydrogen and will utilize solution-mined salt caverns for seasonal, dispatchable storage of the energy.

The first project, designed to convert and store up to 100 metric tons per day of hydrogen, is under construction and is expected to enter commercial-scale operations in mid-2025 to support the Intermountain Power Project’s “IPP Renewed” initiative. Several other opportunities for the project to produce and supply hydrogen to customers in the utility, transportation and industrial sectors in the western region of the United States are in development.

“As we continue to pursue lower carbon energy solutions, we are excited to move forward with the Advanced Clean Energy Storage hydrogen project, through our acquisition of Magnum Development and partnership with Mitsubishi Power, to build on Chevron’s 75-year history in Utah,” said Austin Knight, vice president, Hydrogen, Chevron New Energies. “We seek to leverage the unique strengths of each partner to develop a large-scale, hydrogen platform that provides affordable, reliable, ever-cleaner energy and helps our customers achieve their lower carbon goals.”

As part of broader efforts to pursue lower carbon energy solutions, Chevron New Energies is working to enhance demand for lower carbon intensity hydrogen – and the technologies that support cost-effective supply – as a commercially viable alternative in the transportation, power, and industrial sectors where greenhouse gas emissions are hard to abate.

“Reaching this milestone in the development of our hydrogen project will not only have significant benefits to the western U.S. population, but it will also serve as a blueprint for future hydrogen opportunities,” said Michael Ducker, senior vice president of Hydrogen Infrastructure for Mitsubishi Power. “With Chevron New Energies’ involvement, we expect to expand hydrogen supply more quickly. Together, we are investing in the future of hydrogen, helping to create a viable, cost-competitive market for emerging lower carbon solutions.”

“People look to Utah as the place where we work together to find solutions addressing today’s biggest challenges,” said Utah Gov. Spencer Cox. “This announcement demonstrates that our state has fostered a landscape where clean energy innovation is possible.”

“I look forward to this partnership with Chevron in the ACES Delta mission. Chevron will add tremendous strategic value as we develop a hydrogen production and storage facility,” said Craig Broussard, president, CEO and board chairman of Magnum Development.

“Haddington Ventures is very excited to see Chevron coming on board as the new majority owner at ACES Delta,” said John Strom, managing director, Haddington Ventures. “Having been the primary financial sponsor behind this key energy hub since 2008, we believe this transaction will accelerate lower carbon intensity solutions that reduce emissions in the western United States. Haddington Ventures will remain committed to the success of ACES Delta through its role in management of the investment vehicle that is providing construction equity to the current project.”

Citigroup Global Markets, Inc. served as financial advisor to Chevron. Jefferies LLC served as financial advisor to Haddington.

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Nel to build electrolyzer gigafactory in Michigan

Norwegian electrolyzer manufacturer Nel will construct an electrolyzer plant in Michigan, building on its existing relationship with Detroit-based General Motors.

Norwegian electrolyzer manufacturer Nel will construct an electrolyzer plant in Michigan, building on its existing relationship with Detroit-based General Motors, according to a news release.

CEO Håkon Volldal said the company will make electrolyzers in the Detroit area to supply up to 4 GW worth of electrolyzers each year, making it among the largest such factories in the world.

“We’re thrilled to bring home up to $400 million in investment from Nel Hydrogen creating more than 500 good-paying, clean energy jobs right here in Michigan,” said Michigan Governor Gretchen Whitmer.

Volldal said earlier this year that the company had narrowed its search to three sites that could support a 2 GW manufacturing plant producing both PEM and alkaline electrolyzers.

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“The choice of Michigan is based on an overall assessment of what the state can offer in terms of financial incentives, access to a highly skilled workforce, and cooperation with universities, research institutions, and strategic partners. I will also highlight the personal engagement from Governor Whitmer and her competent and service-minded team,” Volldal said.

Volldal emphasized that the short distance to General Motors, headquartered in Detroit, has played a decisive role in the choice of state. The two companies collaborate to develop further and improve Nel’s PEM electrolyser technology.

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Danish partnership constructing green ammonia project

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The plant will generate more than 5,000 ton green ammonia annually from 50 MW of new solar and 12 MW of existing wind.

The partnership has received DKK 81m from the Danish Energy Technology Development and Demonstration Program (EUDP).

“An important part of the climate action plan for Lemvig Municipality is to turn the areas’ many energy resources from wind and sun into new green fuels or other future potentials,” the release states.

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NovoHydrogen, the Colorado-based renewable hydrogen developer, is in exclusivity with clean energy investment platform Modern Energy, according to two sources familiar with the matter.

ReSource reported in February that GreenFront Energy Partners was advising the company on a Series A.

NovoHydrogen CEO Matt McMonagle said previously that the company has about 30 projects in development in the US, ranging from a few megawatts to hundreds of megawatts. Its most active markets are the West coast, Northeast, Appalachia, Texas and the Rocky Mountains, though the company is not geographically constrained.

The company aims to begin construction on its first projects by the end of this year, the executive had said.

NovoHydrogen declined to comment. GreenFront and Modern Energy did not respond to requests for comment.

Modern Energy, a certified B-Corporation, recently put $90m into net metered solar developer Industrial Sun along with partner EIG. In 2020 EIG committed USD 100m to Modern Energy through a debt facility to fund the development of clean energy assets.

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EIP did not respond to requests for comment.

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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.

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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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