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Clean Energy Ventures appoints veteran investment advisor to board

The private equity firm has brought on additional expertise in renewable energy, green hydrogen, derivative fuels, and grid technology.

Clean Energy Ventures has appointed Girish Nadkarni to its Strategic Advisory Board, according to a news release.

Nadkarni joins former US Secretary of Energy Ernest Moniz, Dr. Ellen Williams, former Chief Scientist for BP and Director of the Department of Energy’s ARPA-E program, and J. Michael McQuade, former CTO of United Technologies Corporation.

In this role Nadkarni will advise the firm on fund investment strategy, portfolio company technology commercialization, emerging technology evaluation and industry trends to support CEV’s long-term vision and expansion plans.

Nadkarni has previously served as the President of TotalEnergies Ventures, President of ABB Technology Ventures and Director of OGCI Climate Investments.

Nadkarni remains an active advisor to several funds, including Siemens Energy Ventures and OGCI Climate Investments. He is on the board at Gentari, the clean energy solutions arm of Malaysian state oil company, Petronas; led the creation of Hy24, the $2bn hydrogen infrastructure fund; and sits on the Advisory Committee at the University of California, Los Angeles’ Institute for Carbon Management.

He brings experience in many sectors that CEV operates in, including renewable energy, green hydrogen and derivative fuels, and grid technology.

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Verdagy opens electrolyzer facility in Silicon Valley

The facility launch comes on the heals of a $73m funding round closed last month.

Verdagy, a pioneer in advanced water electrolysis electrolyzer technologies for large-scale industrial applications, today announced its new facility opening in Newark, California, with more than 100,000 sq. ft. of advanced manufacturing space.

The Silicon Valley factory will be the first to manufacture advanced water electrolyzers in large volumes in the United States. The commencement of operations at Verdagy’s highly-automated manufacturing facility will start in Q1 2024. Verdagy expects to double the total number of its employees by next summer to support its expansion and the operation of this new, state-of-the-art facility.

Verdagy’s customers are in heavy industries such as chemicals, ammonia/fertilizer, steel,  and e-fuels which all require large amounts of green hydrogen. “Our new Silicon Valley manufacturing facility will accelerate the production and cost reduction of our eDynamic® 20 megawatt electrolyzer module, which is the basic building block for delivering larger, gigawatt-scale plants,” said Marty Neese, Verdagy CEO.

The decision to expand Verdagy’s manufacturing capabilities in California comes at a time when the state is prioritizing the development of its hydrogen economy and becoming a federally funded hydrogen hub, as outlined in Governor Newsom’s Hydrogen Market Development Strategy.

“We are focused on building an entire renewable hydrogen ecosystem in California to achieve our climate goals – including the crucial step of manufacturing electrolyzers,” said Dee Dee Myers, Senior Advisor to Governor Newsom and Director of the Governor’s Office of Business and Economic Development. “Verdagy’s decision to expand their footprint here reflects California’s unique strength in creating new markets, enabling the creation of clean energy jobs while solving our most existential challenges with the technology of the future.”

Last month, Verdagy closed a $73m Series B funding round, co-led by Temasek and Shell Ventures. The new funding enables Verdagy to accelerate the launch and commercialization of its eDynamic 20 MW electrolyzer module, which will serve as a fundamental unit to future systems at the 200 MW scale and beyond.

The company’s goal is to design a factory that will serve as the basis for even larger scale production facilities that will be developed in other locations to support Verdagy’s rapid expansion. The company’s existing Moss Landing, CA location will remain focused on advanced research and development, and commercial pilot-plant operations to support Verdagy’s customer needs in the future and continue to deliver technology that produces green hydrogen at the industry’s lowest cost.

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Apex’s towering green hydrogen plans

Apex Clean Energy is advancing a colossal green hydrogen hub in West Texas, powered by a planned 6.5 GW of renewable generation capacity.

Apex Clean Energy has towering ambitions for green hydrogen production in Texas.

The Charlottesville, Virginia-based renewable energy firm is developing 6.5 GW of renewable generation capacity in West Texas that would support green hydrogen production, ReSource has learned, making it one of the largest projects of its kind in development in North America.

Part of a green hydrogen production, storage, transportation, and export hub known as “Project Rio,” the renewables encompass multiple sites under development in a cluster of counties roughly 200 miles northwest of San Antonio. The planned production sites also include solar and battery storage facilities co-located with electrolyzers.

Under the plan, the green hydrogen produced on site would be transported via a new 500-mile hydrogen pipeline to Corpus Christi, for potential conversion to derivatives like ammonia or methanol and available for domestic end users or export.

If completed as conceived, the scale and complexity of the project would signify an infrastructural magnum opus for Apex and its partners, and a feather in the cap of the power and energy private equity strategy of Ares Management, the owner of both Apex and EPIC Midstream, which operates pipelines running from outside of Corpus Christi through West Texas. The new hydrogen pipeline would likely be built on EPIC’s existing right of way.

Project Rio represents a potential breakthrough in the realm of sustainability, as much for its sheer size as for its project-on-project-on-project schematics and its intention to utilize produced water from nearby oil and gas drilling operations in water-scarce West Texas.

The size and final siting for the project could still change, as some aspects of development are in early stages, a source close to Apex said. However, Apex’s development team in Texas has held meetings with local landowners, with a website for the project noting 5.8 GW of renewables across multiple projects as of October, 2023. The plan, as currently conceptualized, would call for 6.5 GW of renewables, according to several sources.

“This is a revolutionary project – the largest proposed in North America,” Apex Senior Public Engagement Manager Anna Richey said in a recent promotional video. An Apex spokesperson declined to comment for this story.

One of the Apex green hydrogen production sites, called Big Trail, is located near Eldorado, Texas, but straddles four counties – Menard, Kimball, Sutton, and Schleicher – according to an Apex public affairs campaign

The Big Trail project entails 3.3 GW of renewables, while another project, called Desert Trail, is sized at 1.5 GW, “with an additional 1,000 MW+ of renewable energy likely,” in Irion, Crockett, and Schleicher counties, according to the project website.

In announcing the green hydrogen partnerships in 2022, Apex, Ares, and EPIC noted that the project would “produce green hydrogen and other derivative green fuels in volumes not yet seen in the United States.” The more precise scope of the renewables for the hub has not been previously reported.

In addition to the West Texas hub, Apex is developing more renewables projects in the Texas Panhandle to power further green hydrogen production there, sources said.

World scale

The project’s ambitious purview would put Apex and its partners at the forefront of green hydrogen development in North America. A similarly grandiose project, advanced by Hy Stor in Mississippi, would bring on around 2.7 GW of electrolyzers in the first phase, reportedly powered by twice that capacity through a mix of onshore wind, solar and geothermal energy.

Hydrogen City, a project from Green Hydrogen International and INPEX CORPORATION, is aiming to bring on 3.75 GW of behind-the-meter renewable energy for phase 1 of the project, which is in Duval County, immediately west of Corpus. At an estimated cost of $6bn, it would power 2.2 GW of electrolysis and produce 280,000 tons per year of green hydrogen, with the project size scaling up to 60 GW depending on demand. 

Germany’s RWE, meanwhile, in partnership with Korea’s LOTTE Chemical and Japan’s Mitsubishi Corporation, is pursuing an integrated green and blue ammonia facility, also in Corpus Christi, that would ultimately produce 10 million tons of clean ammonia per year.

Pattern Energy is pursuing a $9bn green ammonia project with a production capacity estimated at 1 million tons of green ammonia per year – again, in Corpus Christi, ReSource has reported.

And elsewhere in Texas, Air Products and AES are developing a green hydrogen production facility in North Texas that would consist of a combined 1.4 GW of wind and solar generation, producing 200 metric tons per day of green hydrogen. The estimated cost of that project is $4bn.

Still, the technological readiness of electrolyzers for green hydrogen production at scale has been called into question by some in the industry. Sanjiv Lamba, the CEO of global chemical company Linde, recently re-emphasized his view that green hydrogen still has a roughly five to seven year runway to reach maturity for large-scale projects, in part because electrolyzer complexes are still unproven at gigawatt scale.

Apex would seek to bring its green hydrogen projects online later this decade, potentially in line with the technology development timeline referenced by Lamba.

Pipeline capacity

Apex, which is majority owned by Ares Management through its Infrastructure and Power strategy, plans to utilize a new dedicated hydrogen pipeline to be built by EPIC Midstream, another Ares portfolio company. 

The pipeline aspect of the green hydrogen hub could boost its cost competitiveness against other developments in the region that will depend on trucking, as gaseous hydrogen shipped via pipeline has been shown to be a more cost-effective method of transport, especially in large volumes and over longer timelines. And experts have said it would make sense to use EPIC’s existing pipeline right of way, on which it can build without having to acquire new land rights or clear trees. 

The Corpus Christi area has approximately 110 miles of existing hydrogen pipelines, while Texas’s larger hydrogen pipeline network is concentrated further east, from Freeport to Houston to Port Arthur. Thus this new pipeline proposal would open up a swath of West Texas to hydrogen transported from renewable energy facilities where, in theory, it can be made cheaply – by Apex and, potentially, by others.

​“We are evaluating overbuilding the capacity of the pipeline to support others injecting,” Apex Policy Manager Laura Merten recently told Canary Media. ​“The goal is to support and help develop this whole hydrogen economy.”

Pattern Energy has previously discussed developing a green hydrogen project in West Texas that would tie in to a hydrogen pipeline for transport to the Gulf Coast.

EPIC has not yet filed a new construction permit for the hydrogen pipeline, according to the Texas Railroad Commission. And no other hydrogen pipelines are currently under construction in the state. Representatives of Ares and EPIC did not respond to requests for comment.

Water sources

Access to water rights can be a thorny issue in West Texas, and Apex has so far found solutions that have avoided backlash from local communities.

Apex previously burnished its green hydrogen chops by developing a 345 MW wind farm under a PPA with Plug Power for a facility in Young County, Texas. The wind farm was subsequently sold to NextEra and commissioned last year, according to local news reports and Apex’s website. The electrolyzer portion of that project is still under construction, Plug Power investor materials show.

For the Young County project, Apex helped to procure water sources for the electrolysis, ultimately working with the city of Graham to help fund and build a wastewater treatment plant, with a third of the water going to the hydrogen production facility and the remaining water used by the city for irrigation.

For Big Trail, Apex has told local officials it plans to use produced water from oil and gas drilling – dodging a potential conflict with landowners over the use of groundwater. 

Another company with plans to split water via electrolysis for an e-methanol plant, ETFuels, ran into concerned local landowners at a recent meeting of the Plateau Underground Water Conservation & Supply District board of directors, which oversees water rights in the area. Instead of using groundwater, ETFuels was told by a landowner to look for alternate sources of water, “much like Apex Clean Energy proposes to do,” according to a local newspaper report.

“As we look ahead to this massive project, multiple times the scale of the previous project, we are looking for other opportunities to partner with local stakeholders and really benefit the communities we work in, and see [water development] as a huge opportunity for us,” Apex’s Merten said on a recent webinar.

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HTEC gets CAD 10m in federal funds for hydrogen facility at pulp mill

HTEC’s project will operate a renewable hydrogen production facility at a pulp mill in British Columbia.

HTEC and West Fraser Mills will receive CAD 10m from the Canadian government through a program seeking to facilitate adoption of innovative technologies.

Located in Nanaimo, B.C., HTEC’s project will operate a renewable hydrogen production facility at the Harmac Pacific Pulp Mill, producing clean hydrogen by electrolysis, according to a news release.

HTEC last year secured a CAD 217m investment from Chart Industries and I Squared Capital.

With a CAD 10m contribution through the Investments in Forest Industry Transformation program, the hydrogen will be used as clean fuel for transportation and heating, and will help the mill decarbonize its operations. HTEC’s project with Harmac Pacific is an example of how surplus energy from mills can be utilized to lower emissions and advance federal and provincial clean hydrogen goals, according to the release.

“HTEC’s growing network of hydrogen fuelling stations due to the industry demand for low-carbon transportation fuel in Canada has necessitated the development of local hydrogen production,” HTEC CEO Colin Armstrong said in a statement. “We are building multiple clean-hydrogen production facilities across the country, and this Nanaimo-based facility is a critical piece of the clean hydrogen value chain. We are grateful to the Government of Canada for its ongoing support in decarbonizing Canada’s transportation sector, allowing us to expand our retail fuelling network and opening up new market opportunities for heavy-duty transportation applications.”

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Caliche CEO talks hydrogen and CO2 storage expansion

Following the acquisition of assets in Texas and California, Caliche Development Partners CEO Dave Marchese discusses opportunities for growth in the hydrogen and C02 storage market.

Caliche Development Partners II has made a pair of acquisitions with the aim of expanding into growing hydrogen and CO2 storage markets in Texas and California, CEO Dave Marchese said in an interview.

The company, which is backed by Orion Infrastructure Capital and GCM Grosvenor, this week announced the purchase of Golden Triangle Storage, in Beaumont, Texas; and the anticipated acquisition of Central Valley Gas Storage, in Northern California – two regions with increasing demand for storage to support variable power loads, natural gas liquefaction, and high penetrations of renewable resources.

Caliche and seller Southern Company did not use financial advisors for the transaction. Caliche used Willkie Farr as its law firm for the financing and the transactions.

Marchese, who has a private equity background and first worked on a successful investment in a fuel cell company in the year 2000, has also racked up years of experience investing in and operating underground storage assets. The Caliche team developed and sold a natural gas liquids and helium storage business – called Coastal Caverns – earlier this year.

“We know how to put things underground and keep them there, including very small molecules, and we have relationships with many of the customers that are using hydrogen today,” he said.

Roughly a third of the industrial CO2 emissions on the Gulf Coast come from the Golden Triangle area, a region in Southeast Texas between the cities of Beaumont, Port Arthur, and Orange. Much of this CO2 comes from the steam methane reformers that are within 15 miles of Caliche’s newly acquired Golden Triangle asset, Marchese said. The site is in similar proximity to pipelines operated by the air companies – Air Products, Air Liquide, and Praxair – that run from Corpus Christi to New Orleans.

“We’re within 15 miles of 90% of the hydrogen that’s flowing in this country today,” he added. “Pipeline systems need a bulk storage piece to balance flows. We can provide storage for an SMR’s natural gas, storage for its hydrogen, and we can take away captured CO2 if the plant is blue.”

The Golden Triangle site, which sits on the Spindletop salt dome, has room and permits for nine caverns total, with two currently in natural gas service. Three of those caverns are permitted for underground gas storage. “We could start a hydrogen well tomorrow if we had a customer for it,” Marchese said.

The Central Valley assets in Northern California are also positioned for expansion, under the belief that the California market will need natural gas storage for some time to support the integration of renewables onto the grid, he said. Additionally, the assets have all of the safety, monitoring and verification tools for sequestration-type operations, he added, making it a good location to start exploring CO2 sequestration in California. “We think it’s an expansion opportunity,” he said.

“Being an operator in the natural gas market allows us to enter those other markets with a large initial capital investments already covered by cash flowing business, so it allows us to explore incrementally the hydrogen and CO2 businesses rather than having to be a new entrant and invest in all the things you need to stand up an operation.”

Caliche spent $186m to acquire the two assets, following a $268m commitment from Orion and GCM. The balance of the financial commitment will support expansion.

“We’re capitalized such that we have the money to permit, build, and operate wells for potential CO2 sequestration customers,” he said. “The relationship with these stable, large investors also meets the needs of expansion projects: if somebody wanted not only a hydrogen well but compressors as well, we have access to additional capital for underwritten projects to put those into service.”

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Exclusive: Midwest renewables developer launches capital raise

A Midwest renewables developer has launched a $340m capital raise for a wind-to-hydrogen operation in the US heartland.

Zero6, the Minneapolis-based renewables developer, owner and operator, recently launched a process to raise $340m in project capital for its portion of the Lake Preston Biofuels Project in South Dakota, senior managing director Howard Stern said in an interview.The company, previously known as Juhl Energy, is partnered with Colorado-based Gevo, which plans to produce SAF on 240 acres at Lake Preston in a project dubbed Net-Zero 1.Zero6 will develop 20 MW of green hydrogen production adjacent to Net-Zero 1 powered by a 99 MW wind farm located 10 miles from the SAF site, Stern said.Plans call for FID late this year, he said.Zero6 met with several financial advisors for the raise, but decided to try and conduct it in-house, Stern said. The company has not ruled out help from an advisor for this raise and could need those services in the future.The goal is to have an anchor investor in place by May, Stern said. The company is open to strategic or financial investors.Zero6’s strategy is akin to a traditional private equity play, holding a project for five to ten years of operation, Stern said. That could change depending on new investors’ outlook.According to the ReSource database, Gevo has additional projects in Illinois, Iowa and Nebraska.Stern said Zero6 sees opportunities to replicate the Lake Preston strategy in other parts of the country.The Lake Preston project has been tied to the development of carbon capture pipelines through South Dakota, namely the Summit Carbon Solutions CO2 pipeline. Gevo officials have made public comments noting that if the Summit pipeline does not get built, it would disadvantage the Lake Preston project on the basis of its carbon intensity score, and the company may seek options elsewhere.
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Exclusive: California IPP considering hydrogen options for gas generation portfolio

A California-based IPP is considering burning hydrogen in the thermal plants it acquires, as well as in a portfolio of gas peaking assets it is developing in Texas and the western US.

Nightpeak Energy, the Oakland-based IPP backed by Energy Spectrum Capital, is planning to have wide optionality to burn hydrogen in the gas plants it acquires, as well as in quick-start peaking natural gas assets it is developing in Texas and the western US, CEO Paris Hays said in an interview.

“There’s just not a lot of places in this country where you can procure enough hydrogen at a reasonable price to actually serve wholesale electricity customers,” Hays said of the existing hydrogen landscape.

Still, OEMs are figuring out in real time which of their deployed fleet can burn hydrogen, he said. Studies on blending seem to be yielding positive results.

“That’s great news for a business like ours, because we can have optionality,” Hays said. When interacting with equipment providers, conversion to hydrogen is an important, if expensive, discussion point.

“We want to be in a position to be able to do that for our customers,” Hays said. “We can offer a premium product, which is kind of rare in our business.”

Nightpeak recently purchased Saguaro Power Co., which owns a 90 MW combined cycle power plant in Nevada. That facility is a candidate for hydrogen repowering, Hays said, though that’s just one option for an asset that is currently cash-flowing well.

The Nevada facility is close to California, which notably is a market with a demonstrated appetite for paying green premiums, Hays said.

“We wouldn’t manufacture hydrogen ourselves, we would be a buyer,” he said. “This is one path that any plants we own or develop could take in the future.”

Nightpeak has yet to announce any greenfield projects. But Hays said the company is developing a portfolio of “quick-start” natural gas generation projects in ERCOT and WECC. Those assets, 100 MW or more, are to be developed with the concept of hydrogen conversion or blending in mind.

Proposition 7, which recently passed in Texas, could present an opportunity for Nightpeak as the legislation’s significant provisions for natural gas development has pundits and some lawmakers calling for the assets to be hydrogen-ready.

Investor interest in being able to convert gas assets to burn hydrogen reflect an important decision-making process for Nightpeak, Hays said.

“Does it makes sense to just buy a turbine that only burns natural gas and may be a stranded asset at some point, or would we rather pay and select a turbine that already has the optionality?” Hays said. “Putting price aside, you’re always going to go for optionality.”

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