Green hydrogen developer Monarch Energy aims to take its first final investment decision as soon as next year, CEO Ben Alingh said in an interview.
Monarch is moving forward with several green hydrogen projects in the Gulf Coast region, most notably a 500 MW project near Beaumont, Texas and a 300 MW project near Geismar, Louisiana.
Alingh said the company is seeking to advance the projects to FID by late 2024 and early 2025. Monarch has not engaged a project finance banker yet, he said.
The company recently announced a $25m preferred equity investment and $400m project equity commitment from LS Power.
The proceeds of the preferred equity raise will fund pre-FID aspects of Monarch’s 4.5 GW green hydrogen development platform: overhead, project development, interconnection, land, permitting, and engineering.
The $400m commitment, meanwhile, is earmarked for project equity investments in Monarch’s pipeline of projects. Under the arrangement, the projects will be dropped into a new entity, Clean Hydrogen Fuels, LLC, where LS Power provides the capital and Monarch provides the project, Alingh said.
“On a project-by-project basis the projects will be transferred to Clean Hydrogen Fuels if they are selected,” he said. The Clean Hydrogen Fuels entity is jointly owned by Monarch and LS Power.
Monarch did not use a financial advisor for the capital raise. Clean Energy Counsel served as Monarch’s law firm.
For both the Beaumont and Geismar facilities, Monarch has signed MoUs with Entergy to supply long-term renewable power. Monarch is engaged with industrial users of hydrogen in each location as potential offtakers. It plans to deliver hydrogen via local Monarch-developed hydrogen pipelines that it is developing with EPC partners, he said.
“We endeavor to be as close to our end user as possible with our electrolyzer project, to limit development and execution risk on delivery,” he said. For the volumes of Monarch’s projects, trucking solutions are not on the table, he said, as it would simply require too many trucks.
The company has additional production facilities under development in Freeport, Texas, as well as four other locations in Texas, according to the ReSource project database.
Monarch is also interested in end markets for hydrogen derivatives like methanol and ammonia, but Alingh notes that every project “starts with one core focus, and that is making the cheapest green hydrogen possible.”
