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Electrolyzer startup EVOLOH raises $20m Series A

The raise for California-based EVOLOH was led by Engine Ventures with participation from NextEra Energy Resources and 3M Ventures.

EVOLOH, Inc., a cleantech company that manufactures electrolyzer stacks for hydrogen production, today announced it has raised an oversubscribed $20 million Series A round led by Engine Ventures. Additional participating investors include a subsidiary of NextEra Energy Resources and 3M Ventures.

The capital will be used to expand the company’s scalable, high-throughput manufacturing technology and introduce additional capabilities for its NautilusTM platform of advanced liquid alkaline electrolyzers, according to a news release.

EVOLOH is making low-carbon hydrogen globally accessible by revolutionizing the manufacturing of electrolyzers. While incumbent electrolyzers are notoriously expensive and difficult to produce, transport and install, and rely on politically and environmentally challenging supply chains, EVOLOH’s manufacturing facility will offer an 80% reduction in capital investment and footprint.

“This round of funding positions EVOLOH to lead the electrolyzer manufacturing market by transforming electrolyzer stacks into affordable, efficient hardware commodities made with 100% local supply chains,” said Dr. Jimmy Rojas, founder and CEO of EVOLOH.

Electrolyzer stacks, the core component of electrolyzers, are offered via EVOLOH’s NautilusTM platform and made from abundant materials like steel, plastic and aluminum and do not require precious metals or rare earth materials. To reduce the CAPEX and OPEX of hydrogen plants using EVOLOH’s Advanced Liquid Alkaline technology, the NautilusTM stacks use low-cost power electronics and do not require corrosive electrolytes. EVOLOH’s NautilusTM stacks are very compact, and can be built into modules of 24 megawatts, making them ideal for large industrial applications.

Katie Rae, CEO and Managing Partner at Engine Ventures and EVOLOH Board member, added, “EVOLOH has a timely and massive opportunity to not only commercialize better and more affordable electrolyzers, but also introduce a faster and more sustainable electrolyzer manufacturing platform. With an impressive founding team and early partnership activity, EVOLOH is a strong addition to Engine Ventures’ portfolio of cleantech and advanced manufacturing companies.”

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Gas separations provider raises $11m seed round

An industrial separations technology company that purifies gases has raised an oversubscribed VC round in addition to funding from the DOE.

Osmoses, an industrial separations technology company that purifies gases, has raised an oversubscribed $11m seed round led by Energy Capital Ventures, according to a news release.

Additional participating investors include Engine Ventures, Fine Structure Ventures, New Climate Ventures, Collaborative Fund, Little Green Bamboo, BlindSpot Ventures and several prominent angel investors, including Martin Madaus, the former CEO of Millipore Corporation.

In addition to its venture capital funding, Osmoses recently received a $1.5m grant from the US Department of Energy (DOE), as well as additional grant support from ARPA-E and NSF, among other organizations.

Osmoses will use the funding to develop commercial scale membrane modules for field deployment and establish pilot partnerships.

“In the coming months, Osmoses will double its full-time employee headcount, increase its pilot programs with chemical and petrochemical companies, utilities, and alternative energy companies, and develop partnerships with engineering and manufacturing firms,” the release states.

Gas molecules like hydrogen, biomethane, and oxygen are essential ingredients for alternative, low-carbon energy production, the release states. Because these gases don’t naturally occur in a form pure enough for direct use, they must first be separated, but their size and volatility makes doing so energy-intense, and expensive.

Today’s industrial separation processes, including cryogenic processes, distillation, and solvent absorption, account for 15% of the world’s energy consumption, the release states. CO2 emissions from energy combustion and industrial processes accounted for 89% of energy-related greenhouse gas emissions in 2022.

“Membrane technology, which operates as molecular filters to separate gas molecules from one another, has the potential to reduce energy consumption, but widespread implementation remains limited due to product loss and high operating costs,” the release states. Osmoses has developed a patented novel membrane technology that purifies gas molecules with unprecedented flux and selectivity, meaning lower capital requirements and operating costs for customers, with a significantly smaller physical footprint than today’s traditional separation processes – all while reducing industrial energy consumption by up to 90%.”

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Aemetis projects huge growth

Aemetis, a California-based RNG and renewable fuels producer, projects that it will generate $645m of adjusted EBITDA in 2028.

Aemetis, Inc., a renewable natural gas and renewable fuels company focused on negative carbon intensity products, has released an updated Aemetis five-year plan that projects the company will generate $1.95bn in revenues and $645m of adjusted EBITDA in year 2028.

The 2024 plan states revenues are expected to grow at a compound annual growth rate of 38%, and adjusted EBITDA is expected to grow at a projected compound annual growth rate of 83% for the years 2024 to 2028.

In the Aemetis 2024 Five Year Plan, the company’s revenue and adjusted EBITDA growth is expected from 75 dairies producing RNG by 2028; from a 90 million gallon per year sustainable aviation fuel and renewable diesel (SAF/RD) plant in Riverbank, California; from a CO2 Carbon Sequestration and Underground Storage (CCUS) well located near the Riverbank and Keyes biofuels plant sites in California; from the completion of solar, mechanical vapor recompression and other energy efficiency, carbon emission reduction, and electrification projects at our Keyes biofuels plant; and from the continued expansion of biodiesel and tallow refining production at the Aemetis plant in India. The presentation also describes the tax credits expected to be received by Aemetis from the Inflation Reduction Act (IRA) for its renewable fuel and sequestration projects.

“Through the expansion of our RNG, biodiesel, SAF/RD, CCUS, and ethanol businesses, Aemetis is poised to rapidly grow revenue to almost $2 billion by the end of 2028,” said Eric McAfee, Chairman and CEO of Aemetis.  “Additionally, Aemetis closed $50 million of new USDA funding and received $55 million from the sale of IRA tax credits in the past year.  With strong financing support from the USDA for renewable fuels projects, the passage of the $380 billion Inflation Reduction Act to provide funding to renewable energy projects, and EPA approval allowing 15% ethanol blends in 49 states which expands the ethanol market by almost 50%, the regulatory and financial climate for renewable energy projects continues to support our overall growth plan,” added McAfee.

Significant milestones were achieved in the past year under the previous 2023 Five Year Plan, including the transition to receiving revenue and positive operational cash flow from the biogas-to-RNG upgrading facility and dairy digesters; receiving the Use Permit and CEQA approval for the SAF/RD plant at the Riverbank site; receiving the first private carbon sequestration characterization well drilling permit issued by the State of California; completing construction and commissioning of the 1.9 megawatt solar microgrid with battery backup; installing an Allen Bradley distributed control system with AI capabilities to optimize energy use and other operational performance of the Keyes ethanol plant; completing design engineering and are now procuring equipment for the Mechanical Vapor Recompression (MVR) unit at the Keyes plant to utilize low carbon intensity electricity instead of fossil natural gas; completing deliveries of biodiesel to the Oil Marketing Companies in India under the first $40 million of contracts; and receiving awards for an additional $150 million of allocations from the three India government Oil Marketing Companies to be fulfilled using a Cost-Plus pricing formula.

Due to uncertainties regarding timing, the 2024 Plan does not include several other growth initiatives that are actively under development at Aemetis, including revenues and EBITDA from the planned operation of the 50 million gallon per year capacity, debt-free, India refined tallow plant.  The export of tallow from India to North America customers at approximately $4 to $5 per gallon for 50 million gallons per year, increasing revenues by up to $250 million per year, is excluded.  The 2024 Plan projections include using the refined tallow from India as a feedstock supply source for the operations of the SAF/RD plant under development in California to improve profit margins.

In addition to the $55 million received in Q4 2024 from the sale of transferable tax credits, the Inflation Reduction Act is expected to provide transferable investment and production tax credits to Aemetis related to our U.S. renewable fuels and CO2 sequestration projects, which are included in the 2024 Plan.

The Five Year Plan for Aemetis Dairy RNG operations projects revenues will grow from $18 million in 2024 to $190 million in 2028, while Dairy RNG project EBITDA is expected to expand from $7 million in 2024 to $123 million in 2028. The RNG plan accounts for the delays in receiving LCFS revenue that are caused by the current regulatory process to obtain LCFS pathway approvals for each dairy digester that may be shortened if pending regulatory changes are adopted by the California Air Resources Board.

The Five Year Plan projects that the Aemetis Sustainable Aviation Fuel and Renewable Diesel plant will provide revenue of $672 million with adjusted EBITDA of $195 million in year 2027 from the 90 million gallon plant that received the Use Permit and CEQA approval in September 2023 to be built at the 125-acre Riverbank Industrial Complex which has 100% renewable hydroelectricity; a rail line and storage for 120 railcars; 710,000 square feet of buildings; and 50 acres of developable industrial land.

In connection with the carbon reduction upgrades at the Keyes plant, expansions of the India biodiesel plant, and expanded market opportunities resulting from changes to governmental policies, the Five Year Plan projects that the Company will generate annual revenue from ethanol and biodiesel of approximately $826 million in 2028, up from $368 million of expected revenue in 2024.

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Visolis and Ginko Bioworks team up on synthetic rubber and SAF ingredient production

The two companies are leveraging each other to achieve commercial development of a monomer used in the production of synthetic rubber and SAF.

Visolis, a California-based sustainable materials company, has formed a partnership with cell programming and biosecurity firm Ginkgo Bioworks to reach commercial production of a key feedstock ingredient used to make bio-based isoprene and SAF, according to a news release.

Isoprene is a monomer used for commercial scale synthetic rubber production.

“Achieving the production of bio-based isoprene at scale represents a significant step toward decarbonizing tire manufacturing,” the release states. “Isoprene can also be used as an intermediate for high performance, lower carbon intensity sustainable aviation fuel (SAF) production.”

Achieving bio-based isoprene production at scale is difficult because the molecule is highly volatile and combustible.

“Visolis has developed a novel process by using a more stable intermediate, making isoprene through a two-step manufacturing process and enabling more efficient and reliable production,” the release states. “Through the partnership with Ginkgo, the two companies are working to further optimize the efficiency of this biomanufacturing process.”

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Hydrogen firm launches equity raise

A US hydrogen infrastructure and project development outfit has mandated a banker to conduct a raise for equity and project capital.

Lifte H2, the Boston-based hydrogen infrastructure and project developer, has mandated a banker to conduct a Series A capital raise, according to two sources familiar with the matter.

Energy & Industrial Advisory Partners is running the process, which launched recently, the sources said. Lifte H2 is seeking equity in the topco and development capital for its first project.

Talks with strategic and financial investors are being conducted now.

Lifte H2, which also has offices in Berlin, is led by Co-founder and CEO Matthew Blieske, who served as global hydrogen product manager for Shell before starting Lifte H2 in 2021. The founding team also includes Jeremy Manaus, Angela Akroyd, Richard Zhang, Paul Karzel, and Richard Wiens, all of whom previously worked at Shell.

In January, the company launched two hydrogen transport and dispensing products, the MACH₂ Mobile Refueler, which is a combination dispenser and high-capacity trailer; and the MACH2 High-Capacity Hydrogen Trailer, which has a capacity of 1,330 kg at approximately 550 bar and, according to the company, enables the lowest cost per kilogram for over-the-road transport.

The company signed an MOU last year with Swiss compressor manufacturer Burckhardt Compression to develop a joint offering of hydrogen solutions.

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Green hydrogen developer raising capital for projects

Fusion Fuel, a green hydrogen developer based in Portugal, has engaged an advisor and is in talks with investors to raise capital for projects in North America.

Fusion Fuel, a green hydrogen developer based in Portugal, has engaged an advisor and is in talks with investors to raise capital for projects in North America.

The company is working with RBC Capital Markets as financial advisor, Fusion Fuel Co-Head Zachary Steele said in an interview, and expects to produce infrastructure-type returns on its projects.

For its first project in the U.S., Fusion Fuel has agreed to a JV with Electus Energy to build a 75 MW solar-to-hydrogen facility in Bakersfield, California.

The project will produce up to 9,300 tons of green hydrogen per annum including nighttime operation and require an estimated $180m in capital investment, with a final investment decision expected in early 2024 and commissioning in the first half of 2025.

The combination of green hydrogen and solar production incentives along with California’s low carbon fuel standard make the economics of the project attractive, Steele said.

“Hydrogen is selling for up to $15-$18 per kilogram in California in the mobility market, and we can produce it at around the low $3 per kilogram area, so that leaves a lot of room for us to make a return and reduce costs for customers,” he said.

The company sells electrolyzer technology for projects but also serves as a turnkey developer. The technology consists of Hevo-Solar, which utilizes concentrated solar power to create hydrogen; and Hevo-Chain, a centralized PEM electrolyzer powered by external electricity.

Fusion Fuel’s proposition is that its smaller-scale technology – of 25 kW per unit –  is ready to use now, and can be dropped into places like a gas station in New York City, Steele said.

“This allows customers to scale into hydrogen and makes it available on site, compared with the massive projects going up in Eastern Canada or the Gulf Coast that require customers to commit significant capital to underwrite large scale projects,” he added.

Along with Electus, Fusion Fuel has already entered into a land-lease agreement for 320 acres in Kern County, California for the Bakersfield development. Black & Veatch will perform a concept study while Cornerstone Engineering and Headwaters Solutions are also engaged.

Iberian pipeline

The company targets to have EUR 40m of revenues in 2023, with a third of that coming from tech sales and the balance coming from Fusion Fuel-owned development projects.

Its revenue pipeline for next year is focused on the Iberian peninsula, and has been largely de-risked with the company having secured grants, with land and permitting underway.

In addition to the electrolyzer sales, the company, together with its partners, can provide turnkey projects that include engineering, procurement of the balance of plant equipment, construction of the facility, and operations, Steele said on an investor call this week.

“This allows us to not only make returns on the tech sale but also on the overall project and potentially recurring revenue from operations,” he said.

The company plans to use projects it is building in Portugal to expand into other core markets, beginning with a focus on mobility opportunities and targeted industrial decarbonization projects. Starting in 2024 the company plans to extend its reach further into North America and also Italy.

U.S. focus

Similar to other international hydrogen players, the passage of the Inflation Reduction Act caused a strategic shift of focus to the U.S. and accelerated Fusion Fuel’s plans to grow its business there, company executives said.

Notably, since Fusion Fuel will use its own technology in the projects it is seeking to develop, a required amount of that technology will need to be manufactured in the U.S. in order to qualify for the full benefits provided in the IRA.

As such, Fusion Fuel is scouting for a location to build one, or possibly two, manufacturing facilities in the U.S.

“The size of the Bakersfield project alone justifies building a new manufacturing facility,” Steele said on the investor call.

Steele was previously CEO of Cedar LNG, a floating LNG development in British Columbia, prior to exiting to Pembina. He works alongside Fusion Fuels Co-Head & CFO, Frederico Figueira de Chaves, who is based in Portugal.

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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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