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DOE selects 8 carbon capture projects for award negotiations

The DOE has selected eight carbon capture, transport, and storage projects to receive up to $189m in funding for integrated Front-End Engineering Design Studies.

The DOE has selected eight carbon capture, transport, and storage projects to receive up to $189m in funding for integrated Front-End Engineering Design (FEED) Studies.

This funding is part of OCED’s Carbon Capture Demonstration Projects Program, which seeks to address the urgent need to advance carbon management technologies. The goal of the Carbon Capture Demonstration Projects Program is to accelerate the implementation of integrated carbon capture and storage technologies and catalyze significant follow-on investments from the private sector to mitigate carbon emissions sources in industries across America.

OCED selected eight projects to begin award negotiations, which were announced on May 5, 2023.

The following provides a brief overview of the eight FEED Studies selected for award negotiation:

1. Duke Energy Indiana, LLC

Project Name: Edwardsport Flex Fuel Integrated Capture for Indiana’s ENergy Transition (EFFICIENT)

Project Manager: Peter C. Hoeflich, PE

Location: Edwardsport, Indiana

Project Summary: The proposed project includes carbon capture and sequestration at Duke Energy’s integrated gasification combined cycle facility in Edwardsport, Indiana. The proposed design uses a post combustion capture system enabling fuel flexibility from coal-gasified syngas (primary fuel), natural gas and syngas/natural gas blends. This proposed project uses Honeywell UOP CO2 capture technology with an estimated 3.6M tonnes of CO2 captured per year.

2. Entergy Services, LLC (ESL)

Project Name: Lake Charles Power Station Integrated CO2 Capture Project

Project Manager: Janelle Dana

Location: Westlake, Louisiana

Project Summary: The proposed project includes a full-scale integrated CO2 capture facility for Entergy Louisiana LLC’s natural gas combined cycle Lake Charles Power Station (LCPS). The project would use post-combustion CO2 capture technology with Mitsubishi Heavy Industries Ltd KS-21™ solvent capable of capturing a minimum of 95% of the CO2 emissions, equating to nearly 2.5M tonnes of CO2 per year. Entergy Services, LLC has partnered with Talos Energy, Inc. to develop an off-take agreement with a sequestration site approximately 23 miles from LCPS and a pipeline to transport the captured CO2 to the sequestration site for secure storage.

3. Lehigh Hanson, Inc

Project Name: Mitchell Cement Plant Integrated CO2 Capture Project

Project Manager: Gregory Ronczka

Location: Mitchell, Indiana

Project Summary: The proposed project includes integrated CO2 carbon capture, transport, and storage at the Mitchell Cement Plant in Mitchell, Indiana. The proposed project is estimated to capture a minimum of 95% of the CO2 emissions from the cement plant—approximately two million tonnes of CO2 per year. The project design uses Mitsubishi Heavy Industries Americas, Inc. technologies and an infrastructure to securely transport and sequester the CO2 in a geologic formation beneath the plant property.

4. Navajo Transitional Energy Company, LLC (NTEC)

Project Name: Four Corners Power Plant Integrated Carbon Capture and Storage

Project Manager: Harry Tipton

Co- Project Manager: Cindy Crane

Location: Navajo Nation

Project Summary: The proposed project includes an integrated CO2 capture retrofit of post-combustion CO2 capture technology, transport, and storage for the coal fired Four Corners Power Plant (FCPP) located on the Navajo Nation. The proposed project has an estimated capability of capturing a minimum of 95% of the CO2 emissions from the FCPP, representing 10M+ tonnes of CO2 per year. The project uses Mitsubishi Heavy Industries Americas, IncKS-21™ solvent for carbon capture and NTEC has partnered with Enchant Energy, LLC as the CO2 Capture Project Developer, and other institutes for development of the CO2 offtake solution, including pipeline and sequestration site development.

5. Southern States Energy Board

Project Name: Ash Grove Foreman Cement Plant Carbon Capture and Storage

Project Manager: Kenneth Nemeth

Location: Foreman, Arkansas

Project Summary: The proposed project includes integrated CO2 capture and storage associated with cement manufacturing at the Ash Grove Foreman Cement Plant in Foreman, Arkansas. The proposed project includes Air Liquide’s CryocapTM technology as the basis for post-combustion and/or process system CO2 capture, and pipeline and storage field development in the Jurassic Smackover Formation.

6. Taft Carbon Capture, LLC

Project Name: Cypress Carbon Capture Project

Project Manager: Michael Searfass

Location: Hahnville, Louisiana

Project Summary: The proposed project includes a commercial carbon capture facility at the existing Taft cogeneration power plant (i.e., natural gas fired, 3×1 combined cycle, heat, and power cogeneration) facility in Hahnville, Louisiana. The proposed project uses a solvent-based absorption post-combustion carbon capture system that separates and prepares for storage up to three million tonnes of CO2 per year representing a minimum of 90% of the CO2 emissions captured from the power plant.

7. Tampa Electric Company

Project Name: Polk Power Station Integrated CO2 Capture Project

Project Manager: Kris Stryker, Tampa Electric Company

Location: Mulberry, Florida

Project Summary: The proposed project includes retrofitting ION Clean Energy, Inc.’s post-combustion CO2 capture technology with transport and secure geologic sequestration for the natural gas combined cycle power plant at the Polk Power Station in Mulberry, Florida. This technology captures a minimum of 95% of the CO2 emissions which equates to nearly 3.7 million tonnes of CO2 per year that will be stored in secure geologic sequestration that is currently in development.

8. University of Illinois at Urbana-Champaign

Project Name: Integrated Capture, Transport, and Geological Storage of CO2 Emissions from City Water, Light and Power

Project Manager: Dr. Kevin O’Brien

Location: Springfield, Illinois

Project Summary: The proposed project includes an end-to-end carbon dioxide capture, transport, and storage solution for the Dallman 4, a pulverized coal power plant at City Water, Light and Power in Springfield, Illinois. The project is estimated to capture two million tonnes of CO2 per year and transport it to a geologic storage site in the Illinois Storage Corridor. The proposed capture system uses a Linde-BASF solvent-based system.

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NuScale Power, Shell to research hydrogen production from modular nuclear reactor

NuScale, Shell, and industry participants will assess a concept for an energy system for hydrogen production using small modular reactor technology.

Portland, Oregon-based NuScale Power, LLC (NuScale) along with Shell Global Solutions (Shell) and industry participants will develop and assess a concept for an economically optimized Integrated Energy System (IES) for hydrogen production using electricity and process heat from a NuScale VOYGR™ small modular reactor (SMR) power plant, according to a press release.

The project, entitled, “Development and Demonstration of a Concept for an Economically Optimized IES,” will be completed in two phases. Additional research participants include Idaho National Laboratory, Utah Associated Municipal Power Systems (UAMPS), Fuel Cell Energy, FPoliSolutions, and GSE Solutions.

NuScale’s flexible SMR technology holds the potential to balance and stabilize power grids dominated by renewable energies through hydrogen production, the release states. Energy markets present reliability concerns at times when energy demand is high and renewable energy production is low. In these markets, hydrogen would be used as an end-product or as a stored energy source to be processed through a Reversible Solid Oxide Fuel Cell (RSOFC) for electricity generation.

“Hydrogen has been identified as a pathway for global decarbonization and NuScale’s SMR technology complements this goal through low carbon hydrogen production,” said John Hopkins, NuScale Power president and chief executive officer.

A NuScale control room simulator will be modified to evaluate the dynamics of the IES and will include models for the Solid Oxide Electrolysis Cell (SOEC) system for hydrogen production, in addition to a RSOFC for electricity production. The research will consider the number of NuScale Power Modules™ needed for use in SOEC hydrogen production and the quantity of hydrogen stored for subsequent electricity production. Further, local economic factors from the UAMPS Carbon Free Power Project will be assessed, such as the impact in the Western Energy Imbalance Market, resource adequacy programs, and other local market factors to be defined.

“We are pleased to join this collaboration, which is in line with our efforts to explore technologies that have the potential to enable decarbonization and support the energy transition,” said Dirk Smit, vice president of research strategy at Shell.

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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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Grön Fuels’ massive Louisiana fuels project delayed 2 years

Commercial operations for the project are now expected in 2027 compared to 2025 previously, an executive told a local newspaper.

Fidelis New Energy’s plans to build a massive renewable fuels complex at the Port of Greater Baton Rouge have been delayed by two years.

The project, known as Grön Fuels, is a $9.2bn, 65,000 barrel per day renewable fuels facility producing sustainable aviation fuel, renewable diesel, renewable naphtha, and renewable propane as low carbon transportation fuels, according to the firm’s website.

The developer had said in a 2021 press release that Fidelis expected to achieve final investment decision in 2021. However an executive from Fidelis told local Louisiana newspaper that the firm is still working toward a final investment decision as it waits for final rules regarding the IRA.

“We now have a build-out path that enables the start of the construction and independent operations of the [sustainable aviation fuel] production portion of Grön Fuels while enabling the additional values of the FidelisH2 technologies to be added after the IRA rules that impact them are finalized,” Fidelis COO Bengt Jarlsjo wrote to the Greater Baton Rouge Business Report.

Commercial operations for the project are now expected in 2027 compared to 2025 previously, the executive told the newspaper.

Jarlsjo did not respond to a request for an interview from ReSource.

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Green hydrogen developer in exclusivity with new investor

New York-based green hydrogen developer Ambient Fuels is in exclusivity with a new investor, with proceeds from the capital raise slated to fund project development and acquisitions.

Ambient Fuels, the New York-based green hydrogen developer, is in exclusivity with a new investor for a bilateral capital raise, CEO Jacob Susman said in an interview.

Susman declined to name the private equity provider but said the backing will allow Ambient to develop several projects, as well as acquire projects from other developers. The deal is proceeding without the help of a financial advisor.

Once the company reaches its run rate, Ambient plans to complete three to four projects per year costing $50m and up, Susman said, with the first expected to reach operation in 2025.

The company’s initial geographic focus is on the Gulf Coast, centered on the Port of Corpus Christi, Susman said. New York, California, the Pacific Northwest and traditional wind energy states in the Midwest and West are areas of additional work.

Hydrogen hubs

Ambient is closely following the DOE hydrogen hub applications process, Susman said. Which regions are awarded funding could make a difference for where the company locates new projects.

According to ReSource‘s project tracker, Ambient is involved in at least two of the hubs that were encouraged by the DOE to submit a final application: California’s Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES), and the Port of Corpus Christi Green Hydrogen Hub.

In 2021 Ambient completed a funding round led by SJF Ventures. Several other VC funds and angel investors also participated.

Open for offtake business  

Ambient is looking for offtakers in industries that use the molecules for feedstock and energy but need to meet decarbonization targets.

The company is working to provide hydrogen as an industrial feedstock and energy source to sectors including transportation, oil and gas, mining, glass and steel production and automobile manufacturing. Supplying hydrogen for ammonia fertilizer is another target market.

Advisors with clients in those industries should reach out to Ambient, Susman said.

M&A strategy

Ambient strives to be a fully integrated devco with the resources, capital and expertise to take a project to fruition, Susman said. Projects developed by smaller companies can look to Ambient as a buyer for their projects.

“We want to be a home for those great projects that are being developed independently,” Susman said. “Absolutely we will be acquiring projects.”

Smaller developers with good projects could also be targets for takeover with the backing from the new investor, Susman said. The firm could also make a technology buy in software for project development, operations, or possibly the equipment side, though Susman said there’s a low probability of that.

Financial advisors that have leads on good projects Ambient can acquire are welcome to pitch, Susman said.

Susman said he is not in a hurry to exit Ambient and can see the company being independently financed for years to come.

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Waste-to-hydrogen developer hires advisor for equity raise

A California developer of waste-to-hydrogen projects has mandated a boutique advisor to raise equity for early-stage project development and is planning a larger funding round in early 2024.

Clean Energy Enterprises, the holding company of awaste-to-hydrogen project developer based in Long beach, California, hasmandated a financial advisor to raise equity for early-stage development, CEO Jean-LouisKindler said in an interview.

Costigan Capital Partners, of Vancouver, Canada, has beenretained to raise an early round of $5m, Kindler said. That liquidity, split evenlybetween a demonstration project in California and operations, will last aboutone year.

Clean Energy is the holding company of WaysH2, which is thecompany developing the projects.

Next year Clean Energy will conduct a raise of equity anddebt between $30m and $50m, Kindler said.

Clean Energy, which is owned by five founding partners and earlyfriends-and-family backers, is also narrowing options for the first WaysH2 commercialproject in the US, Kindler said. The company has a client that will use hydrogenfor municipal transportation in the southwest.

The group has a relationship with Spanish EPC firm TechnicasReunidas and plans to pursue another demonstration project in either Spain or Portugal.

The technology play is waste-to-hydrogen at landfillprojects to serve end users in local mobility and waste processing energyrequirements.

He pointed to California’s SB 1383 regulations, which mandatesa reduction of organic waste disposal by 75% by 2025.

“It will be used locally,” Kindler said of the hydrogen. Thecompany is also in discussions with foreign ammonia producers. “We want to beclose to our clients.”

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EnCap’s Shawn Cumberland on the fund’s approach to clean fuels

Cumberland, a managing partner with EnCap Energy Transition, discusses how the clean fuels sector compares to the emergence of other new energy technologies, and outlines the firm’s wait-and-see approach to investment in hydrogen and other clean fuels.

EnCap Energy Transition, the energy transition-focused arm of EnCap Investments, is evaluating scores of opportunities in the hydrogen and clean fuels space but doesn’t feel the need to be an early mover if the risk economics don’t work, Managing Partner Shawn Cumberland said in an interview.

Houston-based EnCap prefers to invest in early stages and grow companies deploying proven technologies to the point that they’re ready to be passed onto another investor with much deeper pockets. There are hundreds of early-stage clean fuels companies looking for growth equity in the space, he said, but the firm believes it’s not necessary to deploy before the technology or market is ready.

Given the fund’s strategy of investing in the growth-equity stage, EnCap gains exposure to a niche set of businesses that are not yet subjected to the broader financial markets.

For example, when EnCap stood up Energy Transition Fund I, a $1.2bn growth capital vehicle, the manager piled heavily into storage, dedicating some $600m, more than half of the fund, to the sector.

“That was at a time when all we saw were some people putting some really dinky 10 MW and 20 MW projects online,” he said. “We absolutely wanted to be a first and fast mover and saw a compelling opportunity.”

The reasons for that were two converging macro factors. One was that the battery costs had come down 90% because of EV development. Meanwhile, the demand for batteries required storage to be built out rapidly at scale. So, that inflection point – in addition to the apparent dearth of investor interest in the space at the time – called for early action.

“We were sanctioning the build of these things with no IRA,” Cumberland said.

‘If it works’

To be sure, EnCap is not a technology venture capital firm and waits for technologies to be proven.

As such, the clean fuels sector could end up being a longer play for EnCap, Cumberland noted, but the fund continues to weigh whether there will be a penalty for waiting. In the meantime, regulatory issues like IRS guidance on “additionality” for green hydrogen and the impact of the EU’s rules for renewable fuels of non-biological origin should get resolved.

Still, market timing plays a role, and the EnCap portfolio includes a 2021 investment into Arbor Renewable Gas, which develops and owns facilities that convert woody biomass into low-carbon renewable gasoline and green hydrogen.

Cumberland also pointed to EnCap’s investment in wind developer Triple Oak Power, which is currently for sale via Marathon Capital. That investment was made when many industry players were moving toward solar and dropping attention to wind.

Now, clean fuels are trading at a premium because of investor interest and generous government incentives for the sector, he noted.

“Hydrogen, if it works, may be more like solar,” Cumberland said, describing the hockey-stick growth trajectory of the solar industry over 15 years. If the industry is cost-competitive without subsidies, there will be a flood of project development that requires massive funding and talented management teams

“We won’t be late to the party,” he said.

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