Innovation, Raising capital

Exclusive: CO2-to-SAF tech firm in new capital raise

A technology company with a novel process to convert CO2 into fuels and chemicals is extending a capital raise that previously closed with inputs from several oil and airline majors.

April 16, 2024

OXCCU, the UK-based clean fuels production company, is extending a Series A raise it closed last year with an eye on growth in the US, CEO Andrew Symes told ReSource.

The raise, characterized as a Series A2 by Symes, is being conducted in-house, he said. It builds on the GBP 18m (USD 22.7m) Series A it finished last year, led by Clean Energy Ventures.

Aramco, ENI and United Airlines are also among the company’s backers.

OXCCU, a spin out of Oxford University, plans to raise additional money to scale its catalytic process converting hydrogen and carbon dioxide into sustainable aviation fuel (SAF) and other products. A patent grant, filed in 2020, is anticipated this year.

“We don’t want to be the project developer, we want to license to the project developer,” Symes said of the company’s business model.

Fuel made combining carbon dioxide (captured from industry or power plants) with green or clean hydrogen will be cheaper based on OXCCU’s iron-catalyst process, Symes said, which requires one step instead of the traditional two-step process.

OXCCU is looking for partners to engage with on sustainable aviation fuel (SAF) projects in the US, Symes said. This year the company will deliver a pilot plant in the US and plans to complete a 160 kilogram-per-day plant in Sheffield, UK in 2026.

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Innovation, Project news

ZeroAvia forms hydrogen aviation fuel partnership with Masdar

The UAE-owned renewable energy company will work with the aviation firm to build aircraft refueling infrastructure.

ZeroAvia has signed a partnership agreement with the UAE’s Masdar to explore hydrogen production and supply, initially in North America and Europe, in order to establish hydrogen-powered commercial flights, according to a news release.

The partnership will also try to establish clean flight operations in the UAE.

Masdar is targeting 1 million tons of green hydrogen production per year by 2030. The state-owned company’s Green Hydrogen division is already involved in aviation projects targeting the production of green hydrogen.

ZeroAvia, based in the UK and US, is backed by American Airlines and recently acquired California-based fuel cell stack innovator HyPoint.

August 24, 2023

M&A, Raising capital

US SAF producer targeting 1H24 monetization

Calumet Specialty Products subsidiary Montana Renewables – now the largest producer of sustainable aviation fuel in North America – has received interest for the business indicating valuations in excess of the entire company’s current enterprise value.

Calumet Specialty Products is expecting to close on a monetization of a minority equity stake by early 2024 in its Montana Renewables subsidiary, which is now the largest sustainable aviation fuel producer in North America.

The company has been exploring a monetization, including an IPO, of Montana Renewables with Lazard as an advisor since last year, and would use proceeds to deleverage the parent company. Executives said today they are speaking with bulge bracket banks regarding the timing of a potential IPO or minority stake sale.

“We continue to expect a potential monetization of Montana Renewables to complete the deleveraging of Calumet,” CEO Todd Borgman said in prepared remarks. “For some time we’ve discussed the possibility of a Montana Renewables IPO, private monetization, or even both. We continue to receive clear feedback: that Montana Renewables is a differentiated business, with transformational value potential to Calumet, well in excess of the entire company’s enterprise value.”

Calumet had engaged Lazard last year to conduct a process that culminated in a $250m investment in Montana Renewables from Warburg Pincus in August, 2022. The investment, in the form of a participating preferred equity security, valued Montana Renewables at a pre-commissioning enterprise value of $2.25bn.

The facility began making SAF shipments to Shell as an offtaker earlier this year.

In response to a question, Calumet executives pointed to the enterprise values of publicly traded energy transition companies, noting that Montana Renewables should align with that “at a minimum, if not get a premium for the competitive advantages that we’ve got, due to location, due to advanced pre-treater technology we’ve got, and due to the fact that we’re now North America’s largest SAF producer.”

Calumet’s equity trades at $15.80 per share and a $1.26bn market cap.

The company is evaluating an expansion of its SAF production at Montana Renewables and has purchased a second reactor and applied for a $600m loan from the DOE.

August 4, 2023

M&A, Project finance, Project news

New renewable diesel plant transacts at $499m

Camber Energy, a NYSE-traded energy company, has reached a deal to acquire 100% of the interests in New Rise Renewables, the owner of a newly developed renewable diesel plant in Reno, Nevada.

The plant, which will produce 43,000,000 gallons per year (5,971,585 MMBTUs) of renewable diesel from triglyceride oils such as corn, was purchased for $499m, representing a purchase price of $750m less $251m of existing company liabilities, according to a securities filing. The seller is RESC Renewables Holdings, a predecessor company to Ryze Renewables, which developed the project.

The renewable diesel produced by New Rise Renewables Reno is completely interchangeable with diesel derived from petroleum and can efficiently power diesel engines, such as semi-trucks and large-scale emergency generators. Phillips 66 is under contract to supply all of the feedstock for New Rise Renewables Reno and will purchase 100% of the renewable diesel product for use and sale nearby in California.

The parties had reached a framework for the deal in late 2021, subject to purchase price adjustments and other closing conditions.

Reno-based Greater Commercial Lending (GCL) facilitated $112.6m in government-guaranteed credit for the development of New Rise Renewables Reno. Eighty percent of the GCL-arranged financing for New Rise Renewables Reno is guaranteed by the United States Department of Agriculture (USDA) via its 9003 Biorefinery, Renewable Chemical and Biodiesel Production Manufacturing Assistance Program. The financing structure includes participation by GCL parent Greater Nevada Credit Union, other credit unions, insurance companies and secondary market groups.

Renewable diesel is made by causing chemical reactions through the addition of hydrogen to the natural fats and oils. New Rise has deployed proven state-of-the-art efficient and cost-effective technology methods, which involves hydrogenating the triglycerides, according to an August news release. The process uses hydrogen, pressure, catalyst and heat in an efficient manner, allowing reactions to be uniform and controlled – increasing yield, lowering operating costs and allowing for feedstock flexibility.

The fuel plant is located in the Tahoe-Reno Industrial Center, the largest industrial park in the world. Other occupants include Tesla, Walmart, Google, FedEx, Switch and Panasonic.

January 24, 2023

Innovation, Personnel moves, Raising capital

Exclusive: Former green hydrogen executive raising capital for fusion startup

A former executive that developed large hydrogen and ammonia projects in Texas is raising money in a new role with a fusion energy firm with ambitions to co-locate generation with heavy industry and fuels production.

Tokamak Energy, the UK-based fusion energy startup, is seeking to raise about $80m in a self-conducted Series C capital raise, President Michael Ginsberg told ReSource.

The company previously hired Bank of America to run a $1bn raise but pulled back on the process in favor of more incremental growth, Ginsberg said. The company has already raised $40m of the $120m Series C and is aiming for a close by mid-summer.

With US operations in West Virginia (where co-founder Mark Koepke is a professor of physics at WVU) and headquarters in Oxford, England, Tokamak was recently included in the US Department of Energy’s multimillion-dollar Fusion Development Program and partnered with General Atomics on advanced magnet technology.

Ginsberg previously worked as vice president of technology and project execution at Avina Clean Hydrogen, where he was instrumental in developing the Nueces Clean Ammonia project in Texas. He said Tokamak is planning to build fusion generation in the United States, but has a magnets business with a near-term return profile.

Magnets business

Tokamak is a developer of high-temperature superconducting (HTS) magnets.

They are developed for fusion to contain plasma energy, but like the semi-conductor business, they’ve had applications in other industries, such as defense, offshore wind turbines, and mineral separation.

First revenue from those magnets, from another fusion company, came in last year, he said. There are ongoing contract negotiations with the US Department of Defense and an imaging device maker that uses magnets.

Rail companies interested in maglev (from magnetic levitation) technology are also in discussions with Tokamak, he said.

Turnaround for that business for investors is expected to be three to five years, Ginsberg said.

Fusion-to-X

Tokamak is planning to develop its first commercial scale plant (COD after 2030) in the US.

Requirements for site selection are dependent on nearby capabilities; if deuterium and tritium are to be used as fuels, there needs to be a nearby facility that can handle those hydrogen-isotope fuels. For example, Oak Ride National Labs in Tennessee can handle tritium.

The other siting concern is use case.

“It could be, certainly, pumping electrons onto the grid, in which case your limited by transmission lines,” Ginsberg said. “But also, we could create industrial thermal energy, thermal heat, and co-locate with decarbonized heavy industry.”

Co-location with data centers is another option, he said. Tokamak is also exploring hydrogen production.

“Obviously you could do the traditional electrolysis process, and we’re talking to some companies that just need electrons to convert the H2O into hydrogen and oxygen, and they want baseload power to do that as opposed to intermittent power,” he said. “Also, there’s thermal energy and thermal processes to produce hydrogen that we could use from the fusion reaction.”

Ginsberg, who oversees US operations at Tokamak, was hired following the DOE award.

April 16, 2024

exclusive

M&A, Project finance, Raising capital

US hydrogen and LNG developer raising capital

A Texas-based project developer is conducting a development capital raise for a flagship LNG and green hydrogen project in the Northeast.

New Energy Development Company, a Katy, Texas-based developer with offices in Boston, Texas, is raising between $5m and $8m for an LNG liquefaction, storage and re-gasification facility with additional green hydrogen production and storage, Partner Scott Shields said in an interview.

The company is not using a financial advisor, Shields said, noting that a larger second round capital raise will likely start near the beginning of 2024.

New Energy has secured a brownfield site for a peak-shaving LNG facility in New England with 2 billion cubic feet of storage capacity and 50 MW of solar pv, Shields said. Also planned is an expandable 40 MW PEM electrolyzer line.

He declined to name the state in which the project is located, adding that the company is trying to put a strong support system and marketing plan in place before the location is made public.

The proceeds of the capital raise will go in part to hiring local lawyers and engineering and design work (pre-FEED and FEED), through to FID, Shields said. The project will be built in two phases, Phase 1 being the LNG component and Phase 2 focusing on green hydrogen.

The LNG facility will be the offtaker for the hydrogen, which will run the plant when the solar is insufficient. Through an open season process New Energy has identified five investment grade offtakers for the LNG.

Ramping capex

“We’ve been self-funding up until now,” Shields said of New Energy, which has also put capital and development resources into half-a-dozen other projects around the country.

It’s time for a ramp up in capital expenditures and New Energy is in discussions with strategic and private equity providers, Shields said, noting that the company would prefer the former. Discussions include options to fund just the flagship project, as well as platform equity.

Shields noted that he has investment banking experience and that New Energy Managing Partner Alexander “Hap” Ellis serves as chairman of Old Westbury Funds and the George and Barbara Bush Foundation.

New Energy has partnered with McDermott International to develop patented GreenER hydrogen facilities, a modular, expandable hydrogen facility that can produce 24,000 kg per day (2,760 MMBtu) of renewable hydrogen. The companies in 2021 completed engineering deliverables for multiple designs which are marketed as ideal for grid-scale blending with natural gas pipelines, blending for existing or new power generating facilities and storage injection into salt caverns and above ground storage tanks.

The company has also combined GreenER LNG and hydrogen production and storage plants into an integrated energy hub, capable of producing an additional 200,000 MMBtu of LNG.

New Energy recently hired Chico DaFonte, formerly a vice president at Liberty Utilities, a subsidiary of Algonquin Power, as executive vice president working on LNG and hydrogen projects.

February 1, 2023

exclusive

Raising capital

Hydrogen liquefaction provider looking for growth equity

An emerging liquid hydrogen and liquefaction management company is seeking equity to support manufacturing expansion in Europe and the US.

Absolut Hydrogen, a French liquid hydrogen and liquefaction company based in Grenoble, is looking for equity to scale up production following operations of their demonstration project in France, CEO Jerome Lacapere said in an interview.

Absolut has a partnership with SAF firm ZeroAvia to develop refueling infrastructure for aircraft, and is primarily focused on serving the mobility sector.

A subsidiary of Groupe Absolut, the company offers a full LH2 product range with an entry small-scale hydrogen liquefaction system (< 50 kg/day), a 100 kg/day Turbo-Brayton based H2 liquefier and a 1T/day liquefier based on the same technology.The company's liquefaction demonstration plant in France should produce 100 kg per day, Lacapere said. After that Absolut will need new investment to scale production.Longer term the company has its sites on the US transport market, Lacapere said.“We need to grow in the United States,” Lacapere said. The company will need US-based advisory services and offices in the country to do that, he said.

May 16, 2023