Resource logo with tagline

Distressed SAF developer in investor takeover

An investor consortium formed to take over the UK-based SAF developer, which has a project in development in Natchez, Mississippi.

Distressed sustainable aviation fuel developer Velocys has agreed to be taken over by a consortium of investors in a cash deal worth £4.1m.

Based in the UK, and with projects there and in the US, Velocys said last month that, unless it was able to find meaningful sources of funding or strategic options, it was unlikely that the company would be able to continue as a going concern beyond the end of December 2023. This date has now been extended into early-January 2024 as a result of cost control and cash management initiatives, the company said in a December 5 market update.

A fund advised by Lightrock, a fund advised by Carbon Direct Capital along with GenZero and Kibo Investments formed the investor consortium, called Madison Bidco, to take over Velocys. As part of the deal, the investors will inject $40m of growth equity into the company, “which is expected to ensure that Velocys and its management have the capital resources needed to deliver against Velocys’ medium-term strategic plans,” the release notes.

Velocys in October announced a new technology facility in Plain City, Ohio, that will house the reactor core assembly and catalysis operations related to its production process for sustainable aviation fuel.

The company is currently developing two proposed SAF projects, including the Bayou Fuels project in Natchez, Mississippi, which aims to produce 36 million gallons per year of SAF from woody biomass feedstock.

The Altalto project in Immingham, UK would produce 20 million gallons per year of SAF from municipal and commercial solid waste feedstock.

Unlock this article

The content you are trying to view is exclusive to our subscribers.
To unlock this article:

You might also like...

OMERS exec joins CCS project developer

Former managing partner and head of ventures at OMERS Ventures Damien Steel has joined a Montreal-based CCS developer as CEO.

Deep Sky, a Montreal-based venture commercializing carbon removal and storage solutions at scale, today announced that Damien Steel will take the helm as CEO.

Most recently, Steel served as managing partner and global head of ventures at Toronto-based OMERS Ventures (OV), part of one of Canada’s largest pension plans. There, he was responsible for investments, fund operations, and strategic global oversight of the group. During his tenure, he tripled the size of the platform to $2.5bn in assets while generating strong growth. Previously, he held roles with BridgeScale Partners and EdgeStone Capital Partners. Before joining OV, Damien was a healthcare entrepreneur, founding and selling a digital dental laboratory startup. He also serves on the board of tech disruptors, including Hopper, TouchBistro, Hootsuite and DuckDuckGo. Alongside his new CEO role at Deep Sky, Damien will remain a senior advisor to OMERS Ventures.

Steel brings significant finance, climate, infrastructure, and corporate governance experience in the highly regulated Canadian pension business to the position. In 2022, he led the early stage investment into a Toronto-based climate tech startup and gained first-hand insight into how businesses globally are prioritizing climate risk. Steel also led OV’s largest and most successful investment in travel app, Hopper, also started by Deep Sky founders Fred Lalonde and Joost Ouwerkerk. Through his work with Hopper in recent years, Damien has become increasingly committed to tackling the climate crisis.

“For nearly two decades I’ve had the privilege of supporting world class founders in their efforts to build world class companies,” said Steel. “At Deep Sky, I hope to apply all that I’ve learned from these great visionaries to what I believe is the greatest challenge facing humanity today – climate change inaction.”

“Building an ambitious company to reverse climate change requires an equally ambitious, big thinker at the helm,” said Deep Sky Co-Founder Fred Lalonde. “Damien is a proven visionary, leader, fundraiser, and operator who can catapult Deep Sky’s growth to meet the urgent threat that climate change presents. In working together since 2012, he’s demonstrated an uncanny knack for spotting the next moonshot that withstands the test of time. I’m pleased that he’s recognized Deep Sky as his next big bet.”

Deep Sky is working to build large-scale carbon removal and storage infrastructure in Canada. Acting as a project developer, the company is bringing together the most promising direct air and ocean capture technologies to deliver the largest supply of high quality carbon credits to the market. Powered by renewable energy, Deep Sky’s facilities are strategically located in Quebec, a region with an abundance of hydroelectric power, immense wind power potential and a vast territory with the rich geological makeup required for carbon capture.

Read More »

Linde seeking double-digit return on Texas blue hydrogen plant

Linde CEO Sanjiv Lamba expects the $1.8bn project to achieve a double-digit return, and expressed confidence that the facility will be completed on time in 2025.

Linde plc will spend roughly $5bn on capex and acquisitions in 2023, CEO Sanjiv Lamba said on the company’s 4Q22 earnings call.

That includes a long-term agreement to supply clean hydrogen and other industrial gases to OCI’s new blue ammonia plant in Beaumont, Texas. Linde will build, own and operate an on-site complex by 2025 which will include autothermal reforming with carbon capture, plus a large air separation plant

The company estimates a return profile in the double digits for the project, Lamba said.

“This is a traditional industrial gas project no different to any other that we do and that’s how we would then factor the return coming back into the returns you would see hitting the EPS,” Lamba said.

Lamda also expressed confidence in the company’s ability to complete the project on time in 2025 in spite of its complexities. He noted Linde has already been working on the project for a while, and is in discussions with major carbon capture players, some of which already hold or are in the process of obtaining a federal Class VI permit for carbon dioxide sequestration.

The OCI project will connect to Linde’s existing pipeline in the region, Lamba said.  “We have demand for that blue hydrogen and yes, there is a premium,” Lamba said of the company’s existing grey hydrogen customers.

The partnership with OCI helped add to the company’s project backlog, defined as contractual growth projects with secured returns, which now stands at $9.2bn, Lamba said. Last year was also a record year for small on-site wins, with 52 new secured contracts providing revenue for the next decade.

Lamba said the industrial gasses giant has “no interest to own or speculate” in the global chemicals market and will instead seek offtakers like OCI for its products. OCI is an expert in ammonia production, logistics and marketing, things Linde does not want to engage in.

Meanwhile, Linde has started the process of selling $2bn in gas projects, including Linde’s $1.4bn project with Exxon Mobile in Singapore, Lamba said.

Read More »

Eversource to record $1.6bn impairment, nears sale of offshore wind stakes

Eversource Energy expects to record an impairment of up to $1.6bn in connection with its offshore wind holdings, and is nearing a deal to divest its ownership of the assets to a global infrastructure investor.

Eversource Energy expects to record a substantial impairment charge in the fourth quarter of 2023, primarily due to increased costs and uncertainties in its offshore wind projects. The company is also in advanced talks to divest its 50% ownership in three major offshore wind projects: South Fork Wind, Revolution Wind, and Sunrise Wind​​.

The anticipated impairment charge, in the range of $1.4 to $1.6bn, arises from revised project construction costs and supply chain constraints, particularly in installation vessels and foundation fabrication. These challenges have led to a significant decrease in the fair value of these projects, according to the company. Additionally, the denial of Sunrise Wind’s petition by the New York State Public Service Commission to amend its Offshore Renewable Energy Credit (OREC) contract has contributed to the impairment. This decision impacts Sunrise Wind’s involvement in New York’s renewable energy solicitation and necessitates renegotiation of the OREC agreement at a revised price, further contributing to the impairment expected to be in the range of $600m to $700m for Sunrise Wind alone​​.

Eversource is negotiating with a leading global private infrastructure investor to sell its stake in these projects. While the final terms are still under discussion, Eversource aims to promptly announce the details upon reaching a definitive agreement. This potential divestiture is subject to regulatory approvals and other conditions, including partnership agreements with Ørsted, Eversource’s joint venture partner​​.

Joe Nolan, Eversource’s Chairman, President, and Chief Executive Officer, commented on the challenges faced by the offshore wind industry, noting significant supply chain disruptions and inflationary pressures.

Read More »
exclusive

Pennsylvania RNG firm outlines strategic outlook

A growing RNG developer, owner and operator based in Pennsylvania is anticipating a liquidity event on the part of its private equity owner — once it has locked down a “critical mass” of projects.

Vision RNG, a developer of US RNG projects, could see its next project reach commercial operations in Tennessee in a line of projects in southeastern and mid-western states, CEO Bill Johnson said in an interview.

Vision Ridge Partners, a private equity firm, is the majority owner of the company. Management owns the remaining minority stake.

The company is still in early stages and would likely need to get something like six projects to COD before a liquidity event.

“Locking down projects creates a lot of value,” Johnson said, noting that Vision Ridge will likely follow a typical private equity monetization pattern.

The company’s project at Meridian Waste’s Eagle Ridge Landfill in Bowling Green, Missouri is fully operational. It uses 1,500 scfm of landfill gas (LFG) and produces 375,000 MMBtu of RNG annually.

That mid-sized project is similar in scale to what is being developed in Tennessee, which will likely be the next project to reach COD, Johnson said, declining to provide details on exact location.

“We’re working on developing other opportunities with some of the largest publicly owned landfill companies in the country,” Johnson said.

Projects require between $20m and $60m in capex, ranging from small to large, Johnson said. Vision Ridge takes care of the company’s equity requirements.

Debt options are being considered on a project-by-project basis, he said. Debt tends to range from 50% to 70% of total spend.
“We’ll look to put reasonable project debt on these,” he said.

Vision has not to date retained the services of an investment bank, Johnson said.

Vision is pursuing opportunities in Kentucky, Alabama, South Carolina and Oklahoma, and will evaluate suppliers of services and equipment for each. The location-agnostic company is also open to new relationships with potential future financial and strategic acquirers.

“If you are a private equity group, you’re a potential buyer of the company at some point, so we would be happy to know them and keep their interest in us up,” Johnson said. An acquirer would not necessarily need to have expertise in RNG.

M&A potential

M&A of projects is an option on the table, Johnson said. But returns are better if Vision develops its own projects; and a more challenging macroeconomic environment makes acquisitions somewhat unlikely.

“With the market premiums being paid, I see us continuing to keep our head down and focusing on organic growth,” Johnson said.

Johnson said he expects to see continued consolidation in the greater market. Many large strategic and midstream companies have yet to make significant buys in RNG.

He pointed to bp’s acquisition of Archaea Energy as a significant milestone in the RNG market.

“There’s quite a number of potential acquirers,” Johnson said. “The market is kind of fundamentally and always will be under-supplied and over-demanded.”

Vision would potentially be open to a merger with a portfolio company of a strategic or PE investor, Johnson said.

Read More »
exclusive

Waste-to-energy specialist executes MoU with Nikola

The partnership will encourage the adoption of Nikola Class 8 zero-emission vehicles with Klean Industries’ partners and feedstock suppliers. Nikola will evaluate offtake opportunities from the company’s green hydrogen projects.

Klean Industries, a Vancouver-based waste-to-value technology provider, has executed an MOU with Nikola Corporation to encourage the adoption of Nikola Class 8 zero-emission vehicles with Klean’s partners and feedstock suppliers.

The two companies will also work on developing green hydrogen supply and dispensing infrastructure in the US and Canada, according to a statement seen by ReSource.

Nikola will evaluate offtake opportunities from green hydrogen projects being developed by Klean and its partners involving hydroelectric, wind and solar power in the Pacific Northwest and Canada. Using Klean’s green hydrogen, the companies will convert Klean’s logistics partners’ truck fleet to Nikola Class 8 zero-emission vehicles.

Both Klean and Nikola see a significant opportunity to collaborate on projects where Klean and its partners operate recycling, resource recovery, and waste-to-energy plants, the statement reads.

“We believe Nikola’s hydrogen-electric trucks are going to fundamentally change the ground transportation and logistics landscape. This exciting collaboration will create opportunities that will reinforce the importance of working together as we look to both deploy and develop a renewable hydrogen value chain,” said Jesse Klinkhamer, CEO of Klean Industries Inc., in a statement. “Developing clean energy projects with leading technology companies such as Nikola supports Klean’s strategic focus and enables our respective companies to create a symbiosis between waste, resources, and energy, while simultaneously helping in the creation of a circular low carbon economy. Green hydrogen has the potential to completely transform the energy landscape and drive a cleaner, more sustainable future.”

Klinkhamer said in an interview last year that Klean was in the process of hiring an advisor to raise between $250m – $500m in a strategic capital raise.

Carey Mendes, president, energy at Nikola said, “Klean’s vision of utilizing a green hydrogen fleet of trucks in their tire recycling ecosystem is a clear indication of the company’s commitment to creating a better, more sustainable future. Klean has already brought together like-minded partners to decarbonize their truck fleets which is a testament to their far-reaching commitment and deep knowledge of this sustainability space.”

Klean recently partnered with City Circle Group to build a fully integrated, continuous tire pyrolysis plant to recover carbon black and biofuel in Melbourne Australia. The company also signed a partnership agreement with H2 Core Systems to distribute and build green hydrogen projects around the globe.

Read More »

EXCLUSIVE: 8 Rivers co-founder departs firm

A co-founder and executive has departed the North Carolina-based firm, which recently announced an ammonia project in Texas.

Bill Brown, a co-founder of the technology commercialization firm and clean fuels developer 8 Rivers Capital, has retired from the company, a spokesperson confirmed via email.
According to Brown’s LinkedIn profile, he is serving now as CEO of New Waters Capital. He co-founded 8 Rivers and also served as CEO and CTO in this nearly 16 years there.
Brown did not respond to a request for comment.
According to 8 Rivers’ website, Dharmesh Patel is serving as interim CEO. The company recently announced development of the Cormorant Clean Energy ammonia production facility in Port Arthur, Texas
Read More »

Welcome Back

Get Started

Sign up for a free 15-day trial and get the latest clean fuels news in your inbox.