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Chevron and JERA eyeing US liquid H2 carriers

The two companies are collaborating on “multiple lower carbon opportunities,” including liquid organic hydrogen carriers in the US.

Chevron New Energies and JERA are collaborating on multiple lower carbon opportunities in the US and Asia Pacific, according to a press release.

As part of their focus across the hydrogen value chain – including production, export, and transportation – the two companies will study liquid organic hydrogen carriers (LOHC) in the US.

Other industries include production, new technology commercialization, and the capture, utilization and storage of carbon.

The companies have signed a Joint Study Agreement to explore the potential co-development of lower carbon fuel in Australia and will conduct a feasibility study expected to be completed in 2023. Lower carbon fuel supplies to be produced in the region would seek to leverage Chevron’s LNG and CCS knowledge and experience.

JERA recently announced a collaboration with Uniper to produce up to 8 MTPA of clean ammonia in the US for export.

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Spain’s ACCIONA planning large-scale green hydrogen projects in the US

A JV between Spain’s ACCIONA and Germany’s Nordex has big plans for the US.

ACCIONA & Nordex Green Hydrogen (ANGH) is developing gigawatt-scale green hydrogen projects in the United States.

The firm, a JV between Spanish renewables and infrastructure firm ACCIONA and German wind turbine maker Nordex, has several projects in development in rural America as part of a global portfolio of green hydrogen projects with targeted installed wind and solar capacity of 50 GW.

In comments to the IRS regarding 45V tax credits, the firm’s Vice President of Development Scott Baron wrote that the firm was seeking to reach FID by 2027 and complete construction by 2030 on at least one of the projects.

“Each project represents multiple billions of capital investment and gigawatts of incremental renewable energy capacity. Developing projects of this scale takes time and considerable investment, which we have committed,” Baron wrote.

In making the case for maintaining strict standards for green hydrogen production under 45V, Baron noted that Nordex has a separate business unit, Nordex Electrolyzers, that is developing an alkaline electrolyzer designed to operate under variable electricity output from renewable sources.

“Prototyping will be complete in 2025 with commercial scale-up to follow,” he said. “This experience has given us confidence that the technology (in general) will be ready and scalable in time to support the projects we and others intend to build within this decade.”

Baron declined to comment further on the projects.

Business model

Further making the argument for strict green hydrogen rules, Baron writes that there are zero emissions impacts to the grid under the business model that ANGH is pursuing, whereby renewable energy resources are directly connected to the electrolyzers.

“Our support [of strict rules] is predicated on a business model that ANGH and others are pursuing globally, which focuses on building very large-scale projects (typical projects are 1,000- 3,000 MW electrolyzer capacity, with capital cost expectations of $3-10 billion) in the best renewable energy resource areas of the world but are remote and currently lack transmission infrastructure,” the letter reads. “These projects are exclusively or primarily ‘behind-the-meter’ or ‘off-grid’ and rely on system designs that optimize sizing of the various key pieces of equipment given the wind and/or solar profile of the site. “

Baron goes on to write that the challenge of remotely sited projects is transporting the final end-product to its end user. “Within the United States, there is tremendous potential to utilize and/or develop low-cost pipelines, which is a proven successful and low-cost method of transporting molecules,” he said. “The scale of the projects ANGH is developing can support the capital costs associated with new longer distance pipelines.”

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CleanBay Renewables signs LOI for SPAC takeover

The proposed transaction values CleanBay, a producer of RNG, green hydrogen and controlled-release fertilizer, at $330m.

CleanBay Renewables, a producer of RNG, green hydrogen and controlled-release fertilizer, has signed a letter of intent for a potential business combination with NASDAQ-listed SPAC BurTech Acquisition Corp., according to a news release.

Under the terms of the letter, CleanBay’s existing equity holders would convert 100% of their equity into the combined public company. The proposed transaction values CleanBay at $330m. The BurTech trust account currently holds approximately $294m in cash.

“BurTech expects to announce additional details regarding the proposed business combination when a definitive merger agreement is executed in the second quarter of 2023,” the release states.

CleanBay’s process converts agricultural byproducts into fertilizer. CleanBay’s Chief Executive Officer Donal Buckley said in the release that the company is pursuing new facility developments for that purpose.

“We are excited to partner with CleanBay and believe that access to capital markets will enable CleanBay to commercialize and scale its proprietary and patented processes,” BurTech Chairman and CEO Shahal Khan said in the release. “CleanBay’s ‘shovel-ready projects’ present an attractive investment opportunity for existing and future shareholders.”

The release also highlights Maryland and California state policies to assist in financing such plants and produce RNG, hydrogen and natural fertilizer on an industrial scale.

“With nine identified facilities and eight potential future facilities in the pipeline, we believe that CleanBay will become a significant player in the North American RNG and natural fertilizer market,” Khan said.

According to CleanBay’s management, at full capacity, each CleanBay bioconversion facility can recycle more than 150,000 tons of poultry litter annually. By repurposing a potential source of excess nutrients, each facility can generate more than 750,000 MMBtus of sustainable RNG, 100,000 tons of natural, controlled-release fertilizer, and up to an estimated 1,000,000 tons of CO2 equivalent carbon credits that can be available for monetization in global carbon markets.

As an alternative to renewable natural gas, the facilities can also produce clean hydrogen at an estimated rate of 20,000 tons per year. CleanBay has accumulated proprietary intellectual property covering its conversion process to include trade secrets, a U.S. patent and pending patent applications in the U.S. and Europe.

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Air Products and AES to invest $4bn in mega-scale green hydrogen facility in Texas

The project involves approximately 1.4 GW of wind and solar power generation, along with electrolyzer capacity capable of producing over 200 metric tons per day (MT/D) of green hydrogen.

Air Products and The AES Corporation plan to invest approximately $4bn to build, own and operate a green hydrogen production facility in Wilbarger County, Texas, according to a news release.

This mega-scale renewable power to hydrogen project includes approximately 1.4 GW of wind and solar power generation, along with electrolyzer capacity capable of producing over 200 metric tons per day (MT/D) of green hydrogen, making it the largest green hydrogen facility in the United States.

The facility, which is targeted to begin commercial operations in 2027, will serve growing demand for zero-carbon intensity fuels for the mobility market as well as other industrial markets. It will yield a totally clean source of energy on a massive scale, and, if all the green hydrogen were used in the heavy-duty truck market, it would eliminate more than 1.6 million metric tons of carbon dioxide (CO2) emissions annually when compared to diesel use in heavy-duty trucks. Over the project lifetime, it is expected to avoid more than 50 million metric tons of CO2, the equivalent of avoiding emissions from nearly five billion gallons of diesel fuel.

Air Products and AES will jointly and equally own the renewable energy and electrolyzer assets, with Air Products serving as the exclusive off-taker and marketer of the green hydrogen under a 30-year contract.

The project would create more than 1,300 construction and 115 permanent operations jobs, as well as about 200 transportation and distribution jobs. It is also expected to generate approximately $500m in tax benefits to the state over the course of the project’s lifetime, while extending Texas’ energy leadership.

“We are very pleased to announce this exciting joint venture with AES, which is one of the leading renewable energy companies in America. The new facility in Texas will be, by far, the largest mega-scale clean hydrogen production facility in the U.S. to use wind and sun as energy sources. We have been working on the development of this project with AES for many years and it will be competitive on a world-scale while bringing significant tax, job and energy security benefits to Texas. We are excited to move forward and make clean green hydrogen available to U.S. customers in the near future,” said Seifi Ghasemi, Air Products’ Chairman, President and Chief Executive Officer.

AES President and Chief Executive Officer Andrés Gluski stated, “This project will capitalize on AES’ position as one of the nation’s largest renewable energy developers and its global leadership in innovations such as energy storage systems and supplying around the clock clean energy to data centers. We are very pleased to partner with the world leader in hydrogen, Air Products, for this first of its kind mega-scale green hydrogen facility in the United States. We will build more than 1 GW of new solar and wind facilities to provide zero carbon energy for electrolysis and related production facilities. AES believes that green hydrogen has a key role to play in decarbonizing transportation and accelerating the future of energy.”

Demand for green hydrogen for mobility and industrial applications is expected to grow exponentially across the United States over the next decade. The growth in demand is supported by green hydrogen’s role in net-zero ambitions announced by several states and major corporations. The project is subject to receipt of local permits, and local, state and federal incentives.

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exclusive

See all 79 DOE hydrogen hub applicants

The list, obtained by this publication, shows whether projects were ‘encouraged’ or ‘discouraged’ to submit a final application.

The complete list of 79 applicants to the US Department of Energy’s hydrogen hub funding opportunity includes previously unreported projects from oil majors and renewable energy giants.

The list, obtained by this publication via a FOIA request, shows whether or not projects were ‘encouraged’ or ‘discouraged’ by the DOE to submit a final application before the April 7, 2023 deadline. The program is expected to offer $8bn in federal funding for six to 10 clean hydrogen hubs, with no single project receiving more than $1.25bn. A decision of funding recipients is expected this fall.

Over nearly nine months, the DOE FOIA office was unwilling to send information about the initial 79 applications that were submitted last year, citing confidential materials in the concept papers. The resulting list is therefore scant in details, showing only the name of the project and the lead entity.

While many of the concepts have been publicly announced by proponents, several major projects that have not been reported previously appear on the list: among others, ExxonMobil was encouraged to apply for funding for a project called “Hydrogen Liftoff Hub”; and NextEra has a “Southeast Hydrogen Network” project, which was also encouraged to apply.

The full list of project names and proponents has been added to The Hydrogen Source’s project database, which now showcases over 370 projects in North America, including hydrogen, ammonia, and sustainable aviation fuel as well as eFuels, carbon capture, direct air capture, and more.

The full database is available only to paid subscribers. Simply click over to the database and select the “DOE applicants” filter for the full list.

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Exclusive: Glenfarne exploring hydrogen projects on existing asset base

Glenfarne Energy Transition is advancing its flagship liquefied natural gas project, Texas LNG, and evaluating hydrogen projects on or near its existing asset base on the Gulf Coast.

The Biden administration’s pause on permits for new US liquefied natural gas facilities hasn’t hurt all unbuilt projects.

Glenfarne Energy Transition, a subsidiary of Glenfarne Group, is moving ahead with its fully permitted lower-carbon flagship LNG export facility, Texas LNG, as the project is now set up to be the only such US project to reach FID this year.

Texas LNG, a 4 million MTPA facility proposed for Brownsville, Texas, will be the lowest carbon emitting LNG facility approved in the US, largely due to its use of electric motors in refrigerated compression. 

As designed, the plant would emit .15 metric tons of CO2e per ton of LNG produced, placing it slightly lower than the much larger Freeport LNG facility, which also has electric motors and emits around .17 metric tons of CO2 per ton of LNG.

The carbon intensity measurement counts emissions at the Texas LNG plant only, and not related emissions from the electric grid, which is why Glenfarne is seeking to source power for the project from wind and solar generation in south Texas, Adam Prestidge, senior vice president at Glenfarne, said in an interview.

In fact, the lower carbon aspects of Texas LNG helps with every element of the project, Prestidge said, including conversations with European offtakers and potential debt investors.

“Having a focus on sustainability is table stakes for every conversation,” he added. “It’s the finance side, it’s the offtake side, it’s our conversations with regulatory agencies.”

LNG pause

Glenfarne is seeking to raise up to $5bn of equity and debt for the project, according to news reports, a process that could benefit from the Biden administration’s pause on issuing permits for LNG projects that export to countries without free-trade agreements with the US.

“Our confidence and our timetable for that has probably been accelerated and cemented by the fact we are fully permitted, despite the Biden LNG pause impacting the broader market,” Prestidge said.

“The market has pretty quickly recognized that if you want to invest in LNG or buy LNG from a project that’s going to FID in 2024, you really don’t have very many fully permitted options right now.”

Glenfarne’s other US LNG project, called Magnolia LNG, has not yet received the required federal approvals and is therefore on pause along with a handful of other projects.

For Magnolia, Glenfarne is proposing to use a technology for which it owns the patent: optimized single mixed refrigerant, or OSMR, which uses ammonia instead of propane for cooling, resulting in less feed gas needed to run the facility and thus about 30% lower emissions than the average gas-powered LNG facility, Prestidge said.

Hydrogen projects

Glenfarne Energy Transition last year announced the formation of its hydrogen initiative, saying that projects in Chile, Texas, and Louisiana would eventually produce 1,500 kilotons of ammonia. 

“We’ve got existing infrastructure in the US Gulf Coast, and in Chile. A lot of the infrastructure required to produce LNG is similar or can be easily adapted to the infrastructure needed to produce ammonia,” Prestidge said. “And so, we’ve looked at locating hydrogen and ammonia production at sites in or near the ports of Brownsville and Lake Charles,” where Texas LNG and Magnolia LNG are located, respectively.

“The familiarity with the sites and the infrastructure and the local elements, make those pretty good fits for us,” he added.

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AEM electrolyzer startup conducting Series B capital raise

A maker of anion exchange membrane electrolyzers is undergoing a Series B capital raise.

Versogen, an electrolyzer startup, is conducting a Series B capital raise, with the aim of closing the round in the coming weeks, CFO Tim Krebs said in an interview.

The Delaware-based maker of anion exchange membrane electrolyzers is seeking to raise multiples of its Series A capital raise, Krebs said, which was a $14.5m round completed in May, 2022.

Proceeds from the Series B would allow the company to complete development of its AEM electrolyzer, a 1 MW modular hydrogen generation system, Krebs said. The company is not using a financial advisor.

The Series A funding round was led by Doosan Corporation and its affiliate HyAxiom. Other investors include The Chemours Company, TechEnergy Ventures, Wenstone H2Tech, TOP Ventures America, a CVC arm of Thai Oil Public Company Limited, DSC Investment and CN Innovations Investments Limited. 

Krebs, a former investment banker who has been the CFO of three energy technology companies, expects some existing investors will also participate in Versogen’s Series B round.

Versogen is led by co-founder and CEO Yushan Yan, an electrochemical engineer and inventor. The company touts a technology using low-cost construction materials like an alkaline electrolyzer but a more efficient production process akin to a membrane-based PEM electrolyzer.

Market dynamics

The capital raise is taking place amid a crowded field of electrolyzer startups looking to raise money in order to finalize designs and cement commercial opportunities.

Among others, Electric Hydrogen, a PEM electrolyzer startup, recently raised a $380m Series C; Verdagy raised a $73m Series B in August; and HyAxiom, a developer and manufacturer of fuel cell and electrolyzer solutions, completed a $150m private placement of convertible preferred stock in July.

At the same time, growth equity as well as Series A and Series B funding for climate tech dropped significantly through the first half of 2023.

Series A funding fell 36%, while Series B funding dropped 20% and growth equity investments fell by 64%, according to data from Climate Tech Venture Capital. Series C funding dropped by 72% in 1H23 compared to the same period last year, the same data shows.

Still, the market for electrolyzers is supported by undersupply as green hydrogen projects advance around the world.

James Bowe, a partner at King & Spalding who is advising on several large green hydrogen projects, said the three top manufacturers of electrolyzers are sold out for the next three to four years, potentially providing an opportunity for startups to fill the gap. Bowe made the comments yesterday during a panel at the Reuters North America Hydrogen conference in Houston.

Additionally, several catalysts for further electrolyzer demand are on the near-term horizon. The US Department of Energy is expected to announce the winners of up to $8bn in government funding for hydrogen hubs this week, while guidance from the IRS detailing rules to qualify for green hydrogen tax credits should be issued in the coming months.

Further clarity on government support for the hydrogen industry is expected to spur many projects toward final offtake arrangements and final investment decisions, experts say.

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