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ECP-backed ethanol refiner begins CO2 injection in North Dakota

The ethanol plant is capturing 100% of its CO2 emissions from the fermentation process and injecting approximately 600 metric tons of CO2 per day.

Harvestone Low Carbon Partners (HLCP), a portfolio company of Energy Capital Partners (ECP), has commenced carbon dioxide (CO2) injection as a part of its Blue Flint Ethanol carbon capture and storage (CCS) project facility near Underwood, North Dakota, according to a news release.

The Blue Flint facility began active CO2 injection in October 2023 after receiving final approval from the North Dakota Department of Mineral Resources. Blue Flint is the first facility in the United States to begin actively capturing and injecting CO2 after the passage of the Inflation Reduction Act.

The Blue Flint Ethanol plant produces more than 200,000 metric tonnes per year of CO2, as a byproduct of the fermentation process. Using CCS, Blue Flint is capturing 100% of its CO2 emissions from the fermentation process and is injecting approximately 600 metric tons of CO2 per day. The CO2 is permanently stored underground about one mile below the surface in the Broom Creek formation.

“We are excited to reach this milestone in our larger initiative called Vision Carbon ZERO, a multi-phased approach to reducing our fuel’s carbon intensity to zero,” said Harvestone CEO, Jeff Zueger. “This project is a significant step towards reducing greenhouse gas emissions and creating a steady market for North Dakota as we build a renewable, and sustainable energy future.”

Harvestone is committed to reducing greenhouse gas emissions and promoting sustainable practices for local communities, according to the release. As a leading clean energy investor with a long track record of successful investments, ECP will facilitate HLCP’s vision to develop renewable energy that benefits local communities.

Pete Labbat, ECP managing partner, added, “I would like to extend my congratulations to the HLCP team for being an early mover in bringing carbon capture and sequestration capabilities to the U.S. ethanol industry. The HLCP investment highlights ECP’s ability to identify innovative investment opportunities within the energy transition.”

“Renewable fuels and carbon capture are critical to global decarbonization efforts,” added ECP Partner Matt Delaney, “and we are excited to partner with a talented HLCP team that shares our vision of developing a differentiated low carbon business.”

CCS is the process of capturing CO2 from a large stationary source, compressing the CO2 into a liquid and injecting it via a Class VI injection well deep underground for permanent geologic storage. North Dakota was the first state to be granted primacy from U.S. Environmental Protection Agency (EPA) in 2018. Wyoming followed in 2020.

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Nel sells shares of Danish firm Everfuel

Nel has sold its shareholdings of Danish green hydrogen spin-off firm Everfuel to Japanese partners Itochu Corporation and Osaka Gas.

Nel ASA has agreed to sell all its shares in Danish green hydrogen producer Everfuel.

A total of 11,698,918 shares are sold for a total consideration of NOK 116.6m ($10.6m), equal to NOK 9.97 per share, according to a release from Nel.

HyVC ApS, a company owned by Japanese corporations Itochu Corporation and Osaka gas, is the block buyer of the shares.

Everfuel said the Japanese partners will support future equity financing rounds and invest in one or more of its private placements in the next 36 months with up to EUR 20m, with an initial contribution being the commissioning of Everfuel’s HySynergy phase 1 project.

“Nel is in a build-up phase streamlining the company and focusing all resources on our own growth. We are therefore divesting non-strategic financial positions. With this sale we no longer own any equity listed instruments,” said Kjell Christian Bjørnsen, CFO of Nel.

Everfuel was spun out of Nel in 2020 and has since then been a key client for both Nel’s Electrolyser and Fueling departments, Nel said in the release.

“With this transaction, Everfuel will get a solid, long-term industrial cornerstone investor. Nel has been with Everfuel from the beginning, and while we are no longer shareholders, we look forward to a close relationship with the company,” said Bjørnsen.

Closing of the transaction is contingent upon regulatory approvals.

Carnegie acted as financial advisor to Nel in connection with the transaction.

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Heliogen and Dimensional Energy ink SAF production demo LOI

Heliogen has entered into a letter of intent with sustainable fuels-focused Dimensional Energy to produce sustainable aviation fuel (SAF).

Heliogen, a provider of AI-enabled concentrated solar energy technology, has entered into a letter of intent (LOI) with sustainable fuels-focused Dimensional Energy to produce sustainable aviation fuel (SAF), according to a news release.

The project is located at Heliogen’s concentrated solar thermal demonstration facility in Lancaster, California. This collaboration aims to create a reserve of jet fuel created from sunlight and air.

The companies will work to deploy Heliogen’s proprietary, artificial AI-powered HelioHeat technology to convert sunlight directly into thermal energy in the form of high temperature steam and air that will be used to produce green hydrogen for Dimensional Energy’s Reactor platform.

The hydrogen will be produced using Heliogen’s concentrated solar technology. The LOI includes a goal of building a fully integrated ~1 barrel per day drop-in ready SAF demonstration. The parties expect the demonstration project to be a first step to develop a pipeline for approximately 3m barrels of fuel over the next ten years.

Dimensional Energy has signed a commercial agreement to supply United Airlines with 300 million gallons of SAF over 20 years.

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Decarbonizing the planet’s 1,000 most CO2-intensive assets

A report from German management consulting firm Roland Berger outlines a pathway for decarbonizing the 1,000 assets that emit the most carbon globally.

A new report from German management consulting firm Roland Berger proposes a strategic approach to combat climate change by targeting the decarbonization of the world’s 1,000 most carbon-intensive assets. 

The plan, called the Global Carbon Restructuring Plan, identifies the 1,000 coal-fired power plants, iron, and steel plants that are major contributors to CO2 emissions, noting that over half of these assets are located in China, with significant numbers also in India and the United States.

The ownership of these assets is notably consolidated, with just 40 companies holding assets responsible for half of the noted emissions, suggesting that targeted initiatives could lead to significant environmental benefits, according to the report. Meanwhile, only 160 asset owners together account for around 80% of these emissions.

With a concerted effort to transition these assets towards more sustainable energy sources, including renewable energy, gas, nuclear power, and carbon capture and storage(CCS), the plan outlines a pathway to achieve a substantial reduction in global carbon emissions.

The report calls for widespread deployment of renewable energy in all regions, but notes that each region should “play to its strengths” by complementing renewables with the next best local solution:

  • For China and India, this means employing CCS for their high proportion of young coal- and gas-fired power plants. 
  • In the US, switching from coal- to gas-fired power plants with CCS makes sense due to the low natural gas prices. 
  • Europe should strive for the deployment of CCS and (re-) consider nuclear as a zero-emission technology that can replace baseload energy supply. 
  • Like China and India, countries in the RoW cluster should focus on widespread incorporation of CCS for carbon-intensive assets. 

According to the study, decarbonizing these key assets could result in a reduction of 8.2 gigatons of CO2 emissions, representing a third of the required reduction to maintain hopes of limiting global warming to 1.5°C. Financially, the decarbonization efforts are estimated to cost between USD 7.5 trillion for renewable energy initiatives and up to USD 10.5 trillion for nuclear and CCS solutions over a 26-year period from 2025 to 2050.

 

The report points to stark differences in the costs of decarbonization among emitter countries. “Taken as one-off expenses, decarbonizing the top 1,000 assets will cost China 23-32% of its GDP and will cost 18-31% of GDP in India,” according to the report. “For the RoW cluster, it comes to 9-10%, but for Europe and the United States, it works out at just 2-5% of their respective GDPs.”

‘Headroom’

The Global Carbon Restructuring Plan delves into the financial viability of decarbonization technologies, highlighting a concept known as ‘headroom’. Headroom represents the financial capacity of asset owners to invest in decarbonization without reaching unsustainable levels of debt. The plan’s analysis indicates that the 406 asset owners identified possess a collective headroom of approximately USD 2.2 trillion, underscoring the financial potential to support decarbonization efforts significantly​​.

This financial headroom is unevenly distributed across regions and sectors. Remarkably, almost half of this capacity is held by companies outside of the traditional economic powerhouses, in the rest of the world (RoW), particularly within the oil and gas sector. Chinese companies account for 21% of the total headroom, with US firms close behind at 20%. European companies contribute 9%, while Indian firms represent a mere 3% of the global capacity​​.

The plan raises a pivotal question: Is this USD 2.2 trillion in headroom sufficient to finance the transition to low-carbon technologies? The answer varies by the type of decarbonization solution. For carbon capture and storage (CCS) and gas, the required capital expenditures (CapEx) of USD 1.2 trillion and USD 1.3 trillion, respectively, fall within the available headroom, suggesting these technologies could be pursued immediately with existing financial resources. However, renewable energy sources (RES) and nuclear power present a more complex financial challenge, each requiring an estimated USD 4 trillion in CapEx—nearly double the available headroom. This indicates that an additional USD 2 trillion in financing, from either public or private sources, would be necessary to fully implement these solutions​​.

Moreover, the plan underscores that financeability is not solely a function of the technology chosen but also varies significantly by region. While companies in RoW could feasibly finance all four decarbonization solutions, China and India face substantial financial hurdles across the board. In contrast, for Europe and the US, only the shift to 100% nuclear power would encounter significant financial barriers​​.

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Exclusive: Hydrocarbon recycling firm raising pre-IPO equity

An early-stage company capturing and recycling CO2 from hydrocarbon engines in the northeastern US and Germany has hired an investment bank to help them with a public listing and is raising pre-IPO platform equity.

ESG Clean Energy, a Massachusetts-based carbon capture and recycling firm formed in 2016, plans to go public in 2025 but will first raise pre-IPO platform equity, CEO Nick Scuderi said in an interview.

ESG Clean Energy will change its name in a re-brand and has hired an investment bank to help with the IPO, which does not yet have a targeted quarter, Scuderi said. He declined to name the advisor.

After the name change but prior to the public listing, ESG is seeking to raise between $20m and $40m in platform equity, he said. The company is interested in a traditional IPO, not a SPAC or private debut opportunity.

Angel investors have backed the company to date, with some $40m total raised, Scuderi said. He owns a controlling stake in the company.

Power, water and CO2

ESG Clean Energy, billed as a thermal dynamics and fluid mechanics engineering company, has patented technology for use in fossil combustion engines – both piston-driven engines and bottoming cycles (secondary thermal dynamic waste-to-energy systems). Exhaust is treated to produce CO2 and water.

The technology is commercialized, producing power at a facility in Holyoke, Massachusetts under a 5 MW/20-year PPA with Holyoke Gas & Electric. The 5,000 square-foot plant in the city proper has two Caterpillar G3520 natural gas engines each producing 2 MW of power running on natural gas during peak hours.

The waste-heat from Holyoke One is used to create commodities, including distilled water.

“What we have is a design, a system, where we utilize our technology to separate the water from the exhaust,” Scuderi said. “We can utilize this technology in any power plant in the US that’s running on natural gas.”

In arid regions, the distilled water aspect has obvious potential. The Holyoke One facility makes up to 14,000 gallons of distilled water per day, Scuderi said.

The system is also applicable in ICE engines, Suderi said. The company has been in discussions with auto manufacturers to license ESG’s IP; he declined to name which auto companies.

The CO2 is sold to offtakers who do not re-emit it into the atmosphere, such as cannabis growers and CO2 beverage makers. ESG is also able to sell carbon credits.

Bankable opportunities in the US and Germany

Holyoke One, at a cost of $20m, can be replicated throughout the US and, post-IPO, ESG has eyes on power projects in New England, California and Florida, Scuderi said.

Power plants that produce from 100 MWh to 200 MWh will cost between $400m and $450m, and each of those projects will be set up as a separate LLC, Scuderi said. The demand is particularly large in powering data storage.

“We have different [investment] funds that are very large that are willing to put up the money” to fund the projects, Scuderi said. “It’s bankable because the power sales agreement is tied to a data storage company that’s triple-A rated.”

Data-heavy geographies like Virginia are targets for this kind of development, and ESG plans to sharpen its focus on these projects, as well as project finance efforts, following the IPO.

Now, the company has six large scale projects in development in Germany, including one advanced project serving a cloud computing offtaker in the Berlin area, needing 150 MW to 200 MW of power per hour, Scuderi said.

“In Germany, we’re very far along with getting power sales agreements,” he said. “Once we deploy this technology in one location, the world’s going to want it.”

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Exclusive: Residential microgrid developer to seek electrolysis partner, raise capital

A developer of planned microgrid communities will look for an electrolysis partner to provide green hydrogen for use in agricultural applications and is planning to go to market for platform equity and project debt.

Embark Fund and NOVA Constructors, a group of real estate development interests focused on developing three planned residential communities, will look for an electrolysis partner for its community microgrid development efforts, managing partner Craig McBurney said in an interview.

McBurney, who is also solar development manager for the South Carolina-based renewables developer Alder Energy, said the partners are in the process of acquiring land – between 1,500 and 2,000 acres per parcel – in Virginia, Maryland and Illinois. The latter project is the most advanced.

Each is for a planned residential community including microgrid development, he said. The communities will include renewables, which could be used to power electrolysis during times of low demand. He gave the example of a 30 MW solar ground array.  

“We are preparing to announce a [$60m to $80m] equity raise,” McBurney said, adding that between $240m and $300m of debt will also be required. The money will be used for site acquisition, development and EPC. “The whole capital stack is an opportunity.”  

The group has not formally engaged with an investment bank or financial advisor, he said. They will be targeting private equity, sovereign wealth funds, and family offices.

McBurney pointed to communities like Whisper Valley in Texas and Babcock Ranch in Florida as examples of his group’s efforts to develop sustainable off-grid communities.

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exclusive

AIMCo-backed midstream infrastructure firm in refi

The company, whose asset footprint includes Gulf Coast hydrogen production, today priced a debt refinancing transaction with an 8.875% coupon.

Howard Energy Partners today priced $550m of senior unsecured notes to refinance amounts outstanding on its revolving credit facility.

The company, which is majority owned by the Alberta Investment Management Corporation (AIMCo), will pay 8.875% on the notes, inside of price talk of between 8.75% – 9%, according to sources familiar with the matter.

RBC Capital Markets and TD Securities are joint active bookrunners on the deal, the sources said.

Howard in 2021 closed on the acquisition of the Javelina Facility in Corpus Christi, Texas — a treating and fractionation plant that extracts olefins, hydrogen, and natural gas liquids from the gas streams produced by local refineries.

Starting in Jan of 2023, a strategic technology partner began producing a low-carbon diesel substitute using Javelina’s hydrogen and CO2 as feedstocks, making it one of the first merchant “clean” hydrogen facilities on the US Gulf Coast, according to the company. HEP is also pursuing carbon capture and sequestration opportunities with its Javelina assets through a joint venture with TALOS Energy and the Port of Corpus Christi.

AIMCo acquired an initial 28% stake in HEP in 2017, and brought its ownership stake to 87% last year following the purchase of Astatine Investment Partners’ stake in the company.

Howard operates in two key segments in the US and Mexico: natural gas and liquids. The natural gas segment includes 1,175 miles of pipelines and approximately 4.3 Bcf/d of throughput capacity and 600 MMCf/d of cryogenic processing capacity.

The liquids segment includes terminalling and logistics services for refined products as well as refinery-focused off-gas handling, treating, processing, fractionation and hydrogen supply services.

Spokespersons for the company, RBC, and TD did not respond to emails seeking comment.

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