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Electrolyzer maker plans Baytown, Texas gigafactory

John Cockerill Hydrogen said production from the facility is expected to begin as early as Q3 2024 and will be among the first operational alkaline manufacturing facilities of this size in the US.

Electrolyzer manufacturer John Cockerill Hydrogen has acquired manufacturing space in Baytown for a new gigafactory.

The facility is expected to create 200 new jobs and produce 1 GW per year of electrolyzers.

The company plans to serve the North American market from Houston and provide a domestic supply chain, local customer support, and green hydrogen production equipment.

Using existing buildings retrofitted with new equipment and leveraging John Cockerill Hydrogen’s extensive experience through its other plants around the world (Europe and China), production is expected to begin as early as Q3 2024 and will be among the first operational alkaline manufacturing facilities of this size in the US, the company said in a news release.

“We are excited for the US launch, the first step in our partnership journey with North American businesses and stakeholders who seek to decarbonize and advance the energy transition,” said François Michel, CEO of John Cockerill Group.

US executives chose Houston and specifically the Baytown – Chambers County site for its proximity to transport routes including a rail spur on site, major highways, nearby barge access which are key to facilitating inbound and outbound logistics, and for its significant base of hydrogen use including refining and petrochemicals and existing infrastructure such as export terminals, gas storage capacities and hydrogen pipelines. Additionally, Houston recently secured its place as one of seven regional hydrogen hubs in the US as designated by the Department of Energy, providing a network of energy transition partners and a favorable environment for innovation.

“With an existing energy ecosystem comprised of competitive natural resources, a highly skilled talent base, and existing infrastructure, Houston was the natural choice for our entry to North America,” said Nicolas de Coignac, President of the Americas for John Cockerill. “We look forward to partnering with local and state officials, business organizations, academic institutions and other Houston-area stakeholders playing a part in meeting the ambitious goals to reduce greenhouse gases emissions and ensuring energy security and resilience.”

In addition to the Baytown facility, John Cockerill Hydrogen also has a local head office with support functions and operations located in Houston.

John Cockerill Hydrogen has been involved in building and advancing the hydrogen ecosystem in Houston through its leadership position as a steering committee member of the Greater Houston Partnership’s Houston Energy Transition Initiative (HETI). Among other initiatives, HETI aims to develop an electrolyzer manufacturing cluster. John Cockerill executives also had a leadership role in the recent Hydrogen Hubs Conference in August which convened energy industry leaders, lawyers, financial services companies, elected officials and others to move hydrogen hubs forward.

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Tidewater Midstream and Tidewater Renewables appoint interim CEO

The Canadian company is facing higher estimated costs to build a renewable diesel and hydrogen plant in British Columbia.

The Boards of Directors of Tidewater Midstream and Infrastructure Ltd. and Tidewater Renewables Ltd. have appointed Robert Colcleugh as interim CEO of both companies, effective November 28, 2022, according to a news release.

Colcleugh, who currently serves as a director of Tidewater Midstream, succeeds Joel MacLeod, who is stepping down from his management and board roles to pursue other opportunities.

Tidewater executives including MacLeod said on a recent earnings call that costs would climb an estimated 10% for a renewable diesel and hydrogen plant that’s under construction in British Columbia.

Colcleugh brings significant oil and gas management expertise as well as broad business and capital markets experience to the leadership roles. Thomas Dea will serve as chairman at Tidewater Midstream and Colcleugh will serve as chairman of Tidewater Renewables with Brett Gellner continuing to serve as lead independent director of Tidewater Renewables following Macleod’s departure.

“The business outlook remains strong and both companies are well positioned for continued success,” said Mr. Dea, chairman at Tidewater Midstream. “Under Colcleugh’s leadership, the companies will continue to execute their respective business plans while ensuring they maintain a strong culture of safety, further strengthen their balance sheets, and create value for all constituents. With his significant industry experience and knowledge of the Tidewater business, we have the utmost confidence in his ability to lead the teams and generate shareholder value.”

“We will continue to focus on building a profitable, diversified midstream and infrastructure company at Tidewater Midstream,” said Colcleugh. “At Tidewater Renewables, we will continue to deliver on our commitment to supply North America with low carbon intensity fuel solutions at scale. I look forward to delivering for our valued customers, partners, and shareholders.”

Colcleugh has been a director of Tidewater Midstream since 2017. Over the last 25 years he has held a variety of operational, advisory and board roles at a broad array of domestic Canadian and international energy companies and investment banks.

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Mote receives $1.2m for second biomass-to-H2 plant

Construction on a project in Bakersfield, California is expected to begin in 2025 and target full operational capacity by 2027.

Mote Inc. has received $1.2m in grant funding to establish its second biomass to hydrogen and carbon sequestration plant in partnership with the Sacramento Municipal Utility District, according to a news release.

As Mote’s hydrogen offtake partner for the second facility in Sacramento, SMUD and Mote have been collaborating on the project development. Upon completion, the facility would produce approximately 21,000 metric tons per year (MTPY) of carbon-negative hydrogen for use in thermal power generation and transportation.

The money comes from the US Forest Service, the California Department of Conservation, and the California Department of Forestry.

“Similar to its first project near Bakersfield, this second plant will integrate with carbon capture and geological sequestration methods to produce carbon-negative hydrogen,” the release states. “Mote can process woody waste from farms, forestry, and urban sources. The remaining carbon dioxide from the process is captured and permanently placed underground in saline aquifers for ecologically safe storage.”

Mote has received a formal invitation to submit a Part II application to the Department of Energy Loan Programs Office Title 17 Clean Energy Financing program, which can offer loan guarantees up to 80 percent of eligible project costs.

Bakersfield construction is expected to begin in 2025 and target full operational capacity by 2027.

Mote is a member of the ARCHES community and their application for the DOE’s Regional Clean Hydrogen Hub grant.

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AIMCo takes majority control of Howard Energy Partners

AIMCo will now hold a total ownership stake of 87% in HEP, which is developing a blue hydrogen facility at the Port of Corpus Christi.

Alberta Investment Management Corporation has acquired a stake in Howard Energy Partners from Astatine Investment Partners, according to a press release.

AIMCo will now hold a total ownership stake of 87% in HEP, the release states. The company acquired an initial 28% stake in 2017

HEP management and other minority investors will continue to hold a 13% ownership interest in the company.

TPH&Co., the energy business of Perella Weinberg Partners, served as financial advisor and Kirkland & Ellis served as legal advisor to AIMCo on the transaction.

Last year the Port of Corpus Christi Authority and HEP) executed an MOU to convert Howard’s Javelina refinery services facility at the port into a blue hydrogen production facility.

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Exclusive: Inside Strata’s P2X strategy

Strata Clean Energy is seeking to engage with global chemical, energy, and shipping companies as a potential partner for a pipeline of green hydrogen projects that will have FIDs in 2025 and CODs later this decade.

Strata Clean Energy is developing a pipeline of green hydrogen projects that will produce large amounts of green ammonia and other hydrogen derivatives later this decade.

Mike Grunow, executive vice president and general manager of Strata’s Power-to-X platform, said in an interview that the company is investing in the development of proprietary modeling and optimization software that forms part of its strategy to de-risk Power-to-X projects for compliance with strict 45V tax credit standards.

“We’re anticipating having the ability to produce substantial amounts of low-carbon ammonia in the back half of this decade from a maturing pipeline of projects that we’ve been developing, and we’re looking to collaborate with global chemical, energy, and shipping companies on the next steps for these projects,” he said.

Strata’s approach to potential strategic offtakers could also include the partner taking an equity stake in projects, “with the right partner,” Grunow said. The projects are expected to reach FID in 2025.

Grunow declined to comment on the specific size or regional focus of the projects.

“We aspire for the projects to be as large as possible,” he said. “All of the projects are in deep discussions with the regional transmission providers to determine the schedule at which more and more transmission capacity can be made available.”

Strata will apply its expertise in renewable energy to the green hydrogen industry, he said, which involves the deployment of unique combinations of renewable energy, energy storage, and energy trading to deliver structured products to large industrial clients, municipal utilities and regulated utilities.

The company “commits to providing 100% hourly matched renewable energy over a guaranteed set of hours over the course of an entire year for 10 – 20 years,” Grunow said.

“It’s our expectation that the European regulations and more of the global regulations, and the guidance from the US Treasury will require that the clean energy supply projects are additional, deliverable within the same ISO/RTO, and that, eventually, the load of the electrolyzer will need to follow the production of the generation,” he said.

Strata’s strategy for de-risking compliance with the Inflation Reduction Act’s 45V revenue stream for green hydrogen will give asset-level lenders certainty on the delivery of a project’s IRA incentives.

“Right now, if I’m looking at a project with an hourly matched 45V revenue stream, I have substantial doubt about that project’s ability to actually staple the hourly matched RECs to the amount of hydrogen produced in an hour, to the ton of hydrogen derivative,” he said.

During the design phase, developers evaluate multiple electrolyzer technologies, hourly matching of variable generation, price uncertainty and carbon intensity of the grid, plant availability and maintenance costs along with evolving 45V compliance requirements.

Meanwhile, during the operational phase, complex revenue streams need to be optimized. In certain markets with massive electrical loads, an operator has the opportunity to earn demand response and ancillary service revenues, Grunow said.

Optimal operations

“The key to maximizing the value of these assets is optimal operations,” he said, noting project optionality between buying and selling energy, making and storing hydrogen, and using hydrogen to make a derivative such as ammonia or methanol.

Using its software, Strata can make a complete digital twin of a proposed plant in the design phase, which accounts for the specifications of the commercially available electrolyzer families.

Strata analyzes an hourly energy supply schedule for every project it evaluates, across 8,760 hours a year and 20 years of expected operating life. It can then cue up that digital project twin – with everything known about the technology options, their ability to ramp and turn down, and the drivers of degradation – and analyze optimization for different electrolyzer operating formats. 

“It’s fascinating right now because the technology development cycle is happening in less than 12 months, so every year you need to check back in with all the vendors,” he said. “This software tool allows us to do that in a hyper-efficient way.”

A major hurdle the green hydrogen industry still needs to overcome, according to Grunow, is aligning the commercial aspects of electrolysis with its advances in technological innovation.

“The lender at the project level needs the technology vendor to take technology and operational risk for 10 years,” he said. “So you need a long-term service agreement, an availability guarantee, key performance metric guarantees on conversion efficiency,” he said, “and those guarantees must have liquidated damages for underperformance, and those liquidated damages must be backstopped by a limitation of liability and a domestic entity with substantial credit. Otherwise these projects won’t get financed.”

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US salt cavern developer selling hydrogen storage project

A US-based developer of salt cavern projects for hydrogen storage has retained a financial advisor to sell its first project and is informally seeking an equity investor.

Phoenix Hydrogen, a salt cavern storage developer based in Berkeley, California, has hired a financial advisor to run a sale of its primary project in Arizona, according to two sources familiar with the matter.

Scotiabank is leading the process, which will launch next week, the sources said. The sale is for 100% of the company’s first project near Kingman, Arizona. The project is expected to reach FID in the next 18 months.

Phoenix CEO Shawn Drost said in an interview that the company is informally seeking a platform equity investment as well but is only willing to take on a minority partner. An equity sale would need to raise an amount in the “low-tens” of millions, he said. It’s a difficult proposition, as equity providers in the space tend to demand majority positions.

The company wants to bankroll projects from beginning to end as an owner operator, he said, but requires capital to do so.

Phoenix, a six-person team, has a relationship with GHD Group for EPC, he said. The company is seeking relationships with production-side developers to sign site and storage leases.

Scotiabank did not respond to requests for comment.

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IPP retains banker for California plant sale

An independent power producer has retained a banker for a sale of a decades-old gas plant in California. Aging gas plants have been in the sights of clean fuels developers looking to retrofit or use facilities for clean fuel production and combustion.

GenOn, an independent power producer, has hired Solomon Partners to sell a 54 MW gas plant in California, according to sources familiar with the matter.

The plant, Ellwood, is located in Goleta, in Santa Barbara County, and was shuttered and retired by GenOn as of 2019. It reached COD in 1973 and ran two Pratt & Whitney FT4C-1 gas turbine engines.

Ellwood previously interconnected via Southern California Edison, a utility that is pursuing multiple natural gas decarbonization projects, including a hydrogen-blending initiative with Bloom Energy.

A teaser for the sale of Ellwood, which was issued last week, notes there is an opportunity to install a battery energy storage system at the site, one of the sources added.

Elsewhere in California, investment firm Climate Adaptive Infrastructure and developer Meridian Clean Energy are seeking to demonstrate decarbonization in peaker plants at the much newer gas-fired Sentinel Energy Center. Their plans include hydrogen blending.

GenOn declined to comment. Solomon Partners did not respond to requests for comment.

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