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Consortium reaches FID on German green hydrogen project

The consortium, consisting of major German energy firms, attracted TotalEnergies as an anchor offtaker and are pressing ahead with the project in spite of a 50% cost uptick since conception.

A consortium led by German energy firm Juniper has taken the final investment decision on a 30 MW green hydrogen facility, the Bad Lauchstädt Energy Park.

The consortium, made up of Terrawatt, Uniper, VNG Gasspeicher, ONTRAS, DBI and VNG, said this week they are moving ahead with the project in spite of cost increases from EUR 140m at the start of the project to EUR 210m currently.

Two additional companies will join the project following FID. The construction and operation of the electrolyser will from now on be shared between Uniper and VNG Handel & Vertrieb, and additionally, the consortium partners were able to attract TotalEnergies Refinery Central Germany as the first anchor customer for green hydrogen, according to a news release.

According to the release, work on the 30 MW electrolyser built by Sunfire, which will take about two years, and on the gas transport pipeline that is to be converted, including the construction of a new airlock for introducing pigs to the network, will start shortly.

In 2024, the TotalEnergies refinery in Leuna will then be hooked up by means of construction of the first network connection to the future ONTRAS hydrogen network.

Trial operation will start in early 2025, and from the third quarter of 2025 the pipeline is scheduled to transport green hydrogen from the Bad Lauchstädt Energy Park for use in the TotalEnergies Refinery Central Germany.

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Braya issues green hydrogen provision RFP

The Canadian company has plans to use green hydrogen as a feedstock and to export green ammonia to domestic and international offtakers.

Braya Renewable Fuels has issued an RFP for the provision of green hydrogen as a feedstock for its refinery operations in Come By Chance, Newfoundland and Labrador, according to a press release.

Proposals are to be submitted by 19 December of this year.

Braya could also export green ammonia to local, regional, and international markets. The company is now repositioning the facility to produce renewable diesel and sustainable aviation fuel (SAF).

“Our production of renewable diesel requires substantial amounts of hydrogen feedstock every year,” the release states. “Braya has existing access to grey hydrogen; however, to produce the lowest carbon intensity rating possible, Braya is interested in acquiring green hydrogen to support its operations.”

At approximately 35,000 metric tons, the project would be the largest domestic green hydrogen project in Canada to date.

The operational footprint of the refinery, ample access to water, and existing infrastructure mean that production could be scale beyond Braya’s operational needs.

“Braya is open to capitalizing on potential opportunities with the successful proponent to scale green hydrogen and green ammonia production, storage, and handling to serve a larger market audience,” the release states. “… we have issued this RFP to solicit parties to support us with developing and exploring this opportunity.”

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Suburban Propane Partners purchases RNG assets from Equilibrium

The acquisition provides opportunity for synergies between the acquired assets and Suburban’s existing investments in rDME, hydrogen and RNG.

Suburban Propane Partners will acquire a platform of two operational renewable natural gas assets from Equilibrium Capital Group for $190m, according to a press release.

The acquisition provides opportunity for synergies between the acquired assets and Suburban’s existing investments in rDME, hydrogen and RNG, the release states.

The transaction will be funded with borrowings of approximately $120m under Suburban’s revolving credit facility, and the assumption of approximately $80m of outstanding green bonds.

A large-scale RNG facility in Stanfield, Arizona is currently operating and includes seven anaerobic digesters, manure rights from approximately 55,000 dairy cattle and an interconnect with an interstate pipeline. An additional operating facility in Columbus, Ohio is currently receiving tipping fees from several large food and beverage providers for processing food waste into fertilizer and biogas, and has an active development project to upgrade the biogas into RNG for use in the transportation sector.

There are option rights for a third RNG facility in the Midwest currently being developed by Equilibrium.

In addition to the purchase of two operational biogas facilities, the parties have formed a partnership to serve as a long-term growth platform for the identification, development and operation of additional RNG projects; including an existing pipeline of identified RNG projects that are in various stages of development.

The development company will invest in and develop approximately $155m of future RNG projects, of which Suburban Renewables will own approximately 70% and Equilibrium will own approximately 30% once such projects are fully funded.

Wells Fargo Securities, LLC served as exclusive financial advisor to Suburban. Evercore served as the exclusive financial advisor to Equilibrium Capital Group.

It is expected to be accretive to Suburban’s distributable cash flow in fiscal 2024 as earnings benefit from ongoing expansion and production efficiency efforts

“We look forward to building upon and advancing this opportunity as we seek to leverage Equilibrium’s seasoned management team with a well-established network of operators, engineering and construction providers and off-takers, and a strong commitment to sustainable investments,” Michael Stivala, President and Chief Executive Officer of Suburban Propane, said in the release. “The scalable platform complements our existing portfolio of renewable energy assets, either as a stand-alone RNG distributor, or as a pathway to rDME and hydrogen production.”

In early 2022 Suburban made a 25% stake sale in Independence Hydrogen for $30m. Independence Hydrogen, of Ashburn, Virginia, was advised by Energy & Industrial Advisory Partners. Suburban was assisted by Proskauer Rose.

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Irish agribusiness investing $500m in US biorefinery

The facility is in line for a $400m DOE loan guarantee as part of the investment.

ClonBio, an Irish agribusiness firm with global operations, is planning to invest $500m in a biorefinery plant in Jefferson, Wisconsin.

The group has already invested the first $100m in the facility, called Aztalan, following the acquisition of the moth-balled plant in 2022.

Given incentives in the Inflation Reduction Act, the owners are accelerating their investment program in tandem with an application for a Department of Energy loan guaranteed, the Irish Independent reported.

“It will drive the most efficient use of grain in the history of the United States,” CEO Jeff Oestmann said in a statement. “Every part of the corn kernel is going to be used efficiently to make starch based, fibre based, protein based and fat based foods, feeds, and fuels, thereby promoting the circular economy and maximizing food security,” he added.

Company representatives did not respond to requests for comment.

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Renewable hydrogen developer to launch series A round next month

A Colorado-based renewable hydrogen developer has hired an advisor and will launch a series A funding round next month.

NovoHydrogen, the Colorado-based renewable hydrogen developer, will launch a series A capital raise in the middle of March to take on a new investor for project development and hiring, CEO Matt McMonagle said in an interview.

The company has hired GreenFront Energy Partners to run the process, McMonagle said.

NovoHydrogen builds its projects onsite with customers, as close to end use as possible, he said. The company serves transportation (heavy road transport, shipping and aviation), industrial (cement, glass, metal, steel, food, etc.) and power (peaking power and diesel generator replacement). Most of Novo’s customers are users of grey hydrogen looking to decarbonize. In the case of cement, they are looking to replace diesel for their trucks and coal and natural gas for their kilns.

“We first look to see if we can put our projects on our customer sites and make it there,” McMonagle said. “If we can’t do that, we’ll do offsite, but we still try to be as close to customers as possible to minimize that midstream component or distribution component.”

About 30 projects are in development in the US, ranging from a few megawatts to hundreds of megawatts, McMonagle said. NovoHydrogen’s 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, possibly early next year, McMonagle said. The first project could reach COD in 2024.

NovoHydrogen recently announced that it has closed its seed funding round and appointed four executives to its board of directors. Each of those executives represent an investor that participated in the seed round, McMonagle said.

The new board appointees are: Jeremy Avenier, an active investor at Ohmium International; Peyton Boswell, managing partner at Woodfield Renewable Partners; Bruno Franco, partner at Pacífico Energia and managing partner at PWR Capital; and Joseph Malchow, a managing partner at Hanover (a Silicon Valley VC), board member and investor in Enphase and board member and investor in Archaea.

More money

“We will certainly need more money as our projects mature,” McMonagle said. “I do not have the hundreds of millions of dollars on my balance sheet to build these projects.”

An ideal investor will bring accretive capabilities in hydrogen, in a field like value chain equipment or delivery, to the table, McMonagle said.

NovoHydrogen plans to be a long-term owner-operator of its projects, McMonagle said. That is an important point for customers: that the company is not going to sell the project and not care how the next owner operates.

“We want to earn future business from these customers,” McMonagle said, adding that most of them are transitioning piecemeal.

NovoHydrogen and TigerGenCo in November said they would advance development of green hydrogen capacity to reduce reliance on natural gas at the Bayonne Energy Center located in New Jersey. NovoHydrogen will develop and operate the hydrogen production facility to reduce Bayonne’s carbon emissions.

TigerGen owns the power plant and is the offtaker in that project. Ohmium International is providing the PEM electrolyzers in that project. McMonagle said the company may use other electrolyzer providers for future projects.

The company is also a partner in the Aliance for Clean Hydrogen Energy Systems (ARCHES) for the California DOE Hydrogen Hub submission.

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Exclusive: World Energy GH2 targeting early 2025 FID

World Energy GH2 is aiming to reach FID early next year – and advancing project financing discussions with a pair of advisors – on the $5bn phase 1 green ammonia development in Newfoundland and Labrador known as Project Nujio’qonik. We spoke to Managing Director and CEO Sean Leet in detail about the project.

World Energy GH2, the developer of a green ammonia export project in Newfoundland and Labrador, Canada, is aiming to reach FID in early 2025 on phase 1 of Project Nujio’qonik, Managing Director and CEO Sean Leet said in an interview.

Phase 1 of the project entails the construction of a 1 GW wind facility and 600 MW of electrolysis for an estimated cost of $5bn, Leet said. Once complete, the first phase of Project Nujio’qonik is expected to produce approximately 400,000 tonnes of green ammonia for export.

The developer is working with Green Giraffe and RBC Capital Markets to advance a project financing deal, the same advisors that assisted World Energy GH2 on a $95m loan from Export Development Canada, announced last week.

The debt-to-equity split for the $5bn capital raise is still being iterated as the company looks at financing options with the available government subsidies and potential support from export agencies, Leet said. The company has not yet lined up an arranger for debt financing and expects to make a decision on that role at a later date, he added.

A schedule update is in progress as part of the project’s FEED readiness assessment. This update, considering factors such as long lead item availability and offtaker delivery requirements, is a required step before the start of FEED and is expected to be released around April 15. 

The FEED readiness assessment, Leet said, “is a process that we’ve undertaken with some value engineering due to some learnings from the pre-FEED deliverables and some other aspects of just making sure we’re well prepared for FEED so we can execute flawlessly on that.”

Leet expects the FEED process will take between nine and 12 months, setting the developer up for an FID in early 2025. As part of a competitive bidding process, World Energy GH2 was awarded four different Crown land sites, each capable of producing 1 GW of wind power, allowing for additional phases up to 4 GW of renewables.

Newfoundland, the distant Canadian island where Project Nujio’qonik is located, has become a hotbed of green ammonia project activity due to its exceptional wind resource, with as many eight major projects springing up (see, and zoom, on map).

Investment outlook

The Canadian government has promulgated a clean hydrogen investment tax credit of up to 40% on certain expenses, available until 2035. And in its most recent budget, the government floated the idea of providing contracts for difference to help de-risk emission-reducing projects. 

Leet believes that the CfD arrangement, which will be administered by the Canada Growth Fund, will be tied to the Canada-Germany Hydrogen Alliance, an agreement that promotes clean hydrogen trade ties between the two nations. Canadian Prime Minister Justin Trudeau and German Chancellor Olaf Scholz signed the accord at World Energy GH2’s site in Stephenville, with the aim of shipping hydrogen or ammonia by 2025 – a timeline that looks increasingly stretched. And World Energy GH2 earlier this year became the first North American member of Germany’s Port of Wilhelmshaven's energy hub.

“Those details haven’t been announced yet but we’re hopeful that the CfD mechanism is there to work alongside the ITC,” Leet said.

Additional financing could come from more export credit agencies “in the countries you would expect” that would support local companies providing equipment to Project Nujio’qonik. “That will be a very likely piece of our financing arrangement.”

World Energy GH2 is in discussions with various offtakers, but will be able to engage in greater detail once the ITC and CfD subsidies are clarified, and once the project receives its environmental permit, Leets said. 

World Energy GH2 was set up as a standalone Canadian company with the sole purpose of executing on Project Nujio’qonik. It is owned by its founders along with SK ecoplant, the environment and energy arm of Korea’s SK Group, which took a 20% stake in the company – and also the project – for $50m.

Gene Gebolys, the founder and CEO of World Energy LLC, a provider of low-carbon fuels, is also a founder of Project Nujio’qonik. And John Risley, another partner of the Canadian project, is a co-owner of World Energy LLC.

Support from existing investors along with the Export Development Canada facility announced last week make the project entity well capitalized to move “expeditiously” through FEED to FID, Leet said.

Canada to Europe

World Energy GH2 is talking to the major ammonia players about a scale-up of import capacity on European shores.

Leet noted specifically that the Antwerp-Bruges port has plans to scale up to handle the increased amounts of ammonia imports, for use in the various industries located in Belgium and potentially on to Germany from there.

Three companies – Fluxys, Advario Stolthaven Antwerp, and Advario Gas Terminal – have said they are considering constructing an open-access ammonia import terminal at the port of Antwerp-Bruges. Air Liquide also said it will build an ammonia cracking facility there.

The Port of Wilhelmshaven, Germany, where World Energy GH2 is a member of the energy hub, has similar plans to scale up, with various companies evaluating ammonia import terminals and cracking facilities.

Meanwhile, Leet said the ammonia product that it ships to Europe, in addition to benefiting from Canadian subsidies and tax credits, will also comply with the EU’s RFNBO standards.

The project has existing grid and water connections already at the Port of Stephenville, since the hydrogen plant will be built on top of a former paper mill which consumed both water and electricity. 

“So we're fortunate to have that grid connection available to us and the power in the Newfoundland grid is well over 90% existing hydro,” Leet said. “So between that and our wind power, we will have no issue meeting the standard set by the EU for green hydrogen and it will be 100% RFNBO compliant.”

The company is working on regulatory certification with multiple bodies but has not finalized a provider.

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US hydrogen developer to raise $1bn in 2023

Avina Clean Hydrogen will need $600m or more of debt and between $200m and $300m of equity. Capital raising talks are focused on the operating company and project level.

Avina Clean Hydrogen, a U.S.-based developer of hydrogen production plants, will seek to raise approximately $1bn, or possibly more, in 2023, CEO Vishal Shah said in an interview.

The company will need $600m or more of debt and between $200m and $300m of equity, Shah said. Capital raising talks are focused on the operating company and project level.

Avina is also in discussions with potential investment bankers, but has not hired anyone yet, Shah said.

“The capital needs for us are going to continue to grow,” Shah said. “We are certainly open to bringing on additional partners.”

Four development projects have offtake agreements in place, Shah said. The first operational plant will open in Southern California next year or early 2024, followed by Avina’s 700,000 mtpa green ammonia project in the Texas Gulf Coast. Additional projects are underway in the Midwest.

Three of those projects, each with offtakers in place, will reach FID in 2023 and need project debt, Shah said.

Avina is engaged with half-a-dozen potential customers and will seek to develop additional projects within that existing footprint.

Renewable energy procurement is also an important concern for Avina; the Texas project alone will require 900 MW of renewable energy to power, Shah said. The company is in offtake discussions with regional IPPs, mostly in solar and battery storage, but could use help with those agreements. Shah declined to name the firm’s legal advisor.

Avina was founded more than three years ago and is principally backed by Hydrogen Technology Ventures, a firm headed by Shah.

An equity raise was completed in early Q4, Shah said, declining to provide details. The company has a “large industrial firm” as a strategic investor that it hopes to announce soon. Looking forward, the company will look for a second strategic investor, as well as project finance.

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