Zero6, the Minneapolis-based renewables developer, owner and operator, recently launched a process to raise $340m in project capital for its portion of the Lake Preston Biofuels Project in South Dakota, senior managing director Howard Stern said in an interview.
The company, previously known as Juhl Energy, is partnered with Colorado-based Gevo, which plans to produce SAF on 240 acres at Lake Preston in a project dubbed Net-Zero 1.
Zero6 will develop 20 MW of green hydrogen production adjacent to Net-Zero 1 powered by a 99 MW wind farm located 10 miles from the SAF site, Stern said.
Plans call for FID late this year, he said.
Zero6 met with several financial advisors for the raise, but decided to try and conduct it in-house, Stern said. The company has not ruled out help from an advisor for this raise and could need those services in the future.
The goal is to have an anchor investor in place by May, Stern said. The company is open to strategic or financial investors.
Zero6’s strategy is akin to a traditional private equity play, holding a project for five to ten years of operation, Stern said. That could change depending on new investors’ outlook.
According to the ReSource database, Gevo has additional projects in Illinois, Iowa and Nebraska.
Stern said Zero6 sees opportunities to replicate the Lake Preston strategy in other parts of the country.
The Lake Preston project has been tied to the development of carbon capture pipelines through South Dakota, namely the Summit Carbon Solutions CO2 pipeline. Gevo officials have made public comments noting that if the Summit pipeline does not get built, it would disadvantage the Lake Preston project on the basis of its carbon intensity score, and the company may seek options elsewhere.
Washington state passes SAF incentives
The incentive increases for each one percent reduction in lifecycle greenhouse gas beyond 50 percent, up to a potential incentive of $2 per gallon.
May 4, 2023
