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Fortescue and Tree Energy to develop global H2 network

Fortescue will make an investment of EUR 30m in TES and EUR 100m in a German import terminal.

Fortescue Future Industries and Tree Energy Solutions have agreed to develop the world’s largest green hydrogen integrated project in Europe.

The first phase of this partnership is to jointly develop and invest in the supply of 300,000 tonnes of green hydrogen with final locations being currently agreed. The target for a Final Investment Decision (FID) is in 2023.

FFI and TES have agreed terms for FFI to make an equity investment of EUR 30m to become a strategic shareholder in TES and to invest EUR 100m for a significant stake in the construction of the TES import terminal in Wilhelmshaven, Germany.

First deliveries of green hydrogen into the TES terminal in Wilhelmshaven are expected to take place in 2026.

FFI joins a group of international strategic investors in TES, including E.ON, HSBC, UniCredit, and Zodiac Maritime.

The two companies plan to develop industrial scale green hydrogen production globally with an initial focus on Australia, Europe, Middle East and Africa. They also plan to develop large-scale renewable energy generation, using TES’s business model and access to the European green hydrogen market.

The German Federal Ministry of Economics and Climate Protection recently selected TES to jointly develop and implement Germany’s fifth Floating Storage Regasification Unit in Wilhelmshaven. In parallel, the TES terminal will serve as the primary entry point for energy in Europe. TES will import hydrogen in the form of renewable natural gas.

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Shell sells interest in SouthCoast Wind

Shell has sold its 50% interest in SouthCoast Wind, a proposed offshore wind farm off the coast of Massachusetts with 2.4 GW of capacity.

Shell New Energies US LLC (Shell), a subsidiary of Shell plc, has sold its 50% equity share in SouthCoast Wind Energy LLC (SouthCoast Wind) to joint venture partner Ocean Winds North America LLC (Ocean Winds), according to a news release.

Terms of the transaction were not disclosed.

SouthCoast Wind is a 50-50 joint venture between Shell and Ocean Winds, established to develop offshore wind projects off the coast of Massachusetts.

“In-line with our Powering Progress strategy, Shell continues to hone our portfolio of renewable generation projects in key markets where we have an advantaged position,” said Glenn Wright, Senior Vice President, Shell Energy Americas. “We are grateful to Ocean Winds for their years of partnership within this venture, and continue to seek opportunities to provide more energy, with fewer emissions.”

This deal was structured to simultaneously sign and close, with an immediate effective date.

SouthCoast Wind is developing a proposed offshore wind farm in US federal waters about 30 miles south of Martha’s Vineyard and 23 miles south of Nantucket, Massachusetts with an approximate capacity of 2,400 MW via Lease OCS-A 0521, which covers 127,388 acres. Formerly named Mayflower Wind Energy LLC, this joint venture was established in 2018.

Ocean Winds is a 50-50 offshore wind joint venture owned by EDP Renewables and ENGIE.

In the U.S., Shell is a 50-50 partner in an additional offshore wind joint venture, Atlantic Shores Offshore Wind LLC (Atlantic Shores), with EDF-RE Offshore Development, LLC. Atlantic Shores is developing a portfolio of wind farms off the coast of New Jersey and New York.

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Toyota powering California port facility with fuel cell technology

Toyota and FuelCell Energy have completed installation of a fuel cell system at the Long Beach vehicle processing center.

FuelCell Energy, Inc. and Toyota Motor North America, Inc. (Toyota) have announced the completion of the first-of-its-kind “Tri-gen system” at Toyota’s Port of Long Beach operations, according to a news release.

The Tri-gen system, owned and operated by FuelCell Energy, produces renewable electricity, renewable hydrogen, and water from directed biogas. FuelCell Energy has contracted with Toyota to supply the products of Tri-gen under a 20-year purchase agreement.

Tri-gen is an example of FuelCell Energy’s ability to scale hydrogen-powered fuel cell technology, an increasingly important energy solution in the global effort to reduce carbon emissions. Tri-gen will enable Toyota Logistic Services (TLS) Long Beach to be the company’s first port vehicle processing facility in the world powered by onsite-generated, 100 percent renewable energy and represents the types of innovative and bold investments the company is making as part of its environmental sustainability strategy.

“By utilizing only renewable hydrogen and electricity production, TLS Long Beach will blaze a trail for our company,” said Chris Reynolds, Chief Administrative Officer, Toyota. “Working with FuelCell Energy, together we now have a world-class facility that will help Toyota achieve its carbon reduction efforts, and the great news is this real-world example can be duplicated in many parts of the globe.”

FuelCell Energy CEO Jason Few said, “FuelCell Energy is committed to helping our customers surpass their clean energy objectives. By working with FuelCell Energy, Toyota is making a powerful statement that hydrogen-based energy is good for business, local communities, and the environment. We are extremely pleased to showcase the versatility and sophistication of our fuel cell technology and to play a role in supporting Toyota’s environmental commitments.”

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Biden admin grants $4bn tax credits for 100 energy projects

The administration allocated $2.7bn in tax credits to clean energy manufacturing and recycling; $800m to critical materials recycling, processing, and refining; and $500m to industrial decarbonization.

The U.S. Department of Energy (DOE), the U.S. Department of Treasury, and the Internal Revenue Service (IRS) today announced $4 billion in tax credits for over 100 projects across 35 states to accelerate domestic clean energy manufacturing and reduce greenhouse gas emissions at industrial facilities.

Projects selected for tax credits under the Qualifying Advanced Energy Project Tax Credit (48C), funded by President Biden’s Inflation Reduction Act, span across large, medium, and small businesses and state and local governments, all of which must meet prevailing wage and apprenticeship requirements to receive a 30% investment tax credit. Of the $4 billion tax credits, $1.5 billion supports projects in historic energy communities.

The agencies did not release a full list of the projects awarded tax credits, citing prohibitions in the law. But a news release gave this overview:

Clean energy manufacturing and recycling: $2.7 billion in tax credits (67% of round 1 tax credits)

  • Selected from applications requesting support for the buildout of U.S. manufacturing capabilities critical for clean energy deployment and span clean hydrogen (e.g., electrolyzers, fuel cells, and subcomponents), grid (e.g., cables, conductors, transformers, and energy storage), electric vehicles (e.g., battery components, power electronics), nuclear power, solar PV, and wind energy (including offshore wind components), among other industries and components critical to supporting secure and resilient domestic clean energy supply chains.

Critical materials recycling, processing, and refining: $800 million in tax credits (20% of round 1 tax credits)

  • Selected projects are investing in multiple electrical steel applications, lithium-ion battery recycling, and rare earth projects, all critical areas for maintaining a secure, reliable energy system and advancing the clean energy transition.

Industrial decarbonization: $500 million in tax credits (13% of round 1 tax credits)

  • Selected projects would implement decarbonization measures across diverse sectors, including chemicals, food and beverage, pulp and paper, biofuels, glass, ceramics, iron and steel, automotive manufacturing, and building materials. Low-carbon fuels, feedstocks, and energy sources are well-represented as a solution for decarbonization across these projects.
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Exclusive: Residential microgrid developer to seek electrolysis partner, raise capital

A developer of planned microgrid communities will look for an electrolysis partner to provide green hydrogen for use in agricultural applications and is planning to go to market for platform equity and project debt.

Embark Fund and NOVA Constructors, a group of real estate development interests focused on developing three planned residential communities, will look for an electrolysis partner for its community microgrid development efforts, managing partner Craig McBurney said in an interview.

McBurney, who is also solar development manager for the South Carolina-based renewables developer Alder Energy, said the partners are in the process of acquiring land – between 1,500 and 2,000 acres per parcel – in Virginia, Maryland and Illinois. The latter project is the most advanced.

Each is for a planned residential community including microgrid development, he said. The communities will include renewables, which could be used to power electrolysis during times of low demand. He gave the example of a 30 MW solar ground array.  

“We are preparing to announce a [$60m to $80m] equity raise,” McBurney said, adding that between $240m and $300m of debt will also be required. The money will be used for site acquisition, development and EPC. “The whole capital stack is an opportunity.”  

The group has not formally engaged with an investment bank or financial advisor, he said. They will be targeting private equity, sovereign wealth funds, and family offices.

McBurney pointed to communities like Whisper Valley in Texas and Babcock Ranch in Florida as examples of his group’s efforts to develop sustainable off-grid communities.

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Exclusive: American Clean Power to advocate for ‘grandfathering’ in 45V rules

The clean energy trade group plans to continue promoting the concept of “grandfathering” for early-mover green hydrogen projects in response to IRS guidance for 45V rules, according to industry sources familiar with the plans.

Clean energy industry trade group American Clean Power (ACP) plans to continue championing the concept of “grandfathering” in the green hydrogen sector, arguing that it is critical for the economic viability of early green hydrogen projects under the Inflation Reduction Act’s clean hydrogen tax credits, according to sources familiar with the group’s plans.

Grandfathering would allow these projects to adhere to less stringent annual time-matching requirements before transitioning to an hourly regime.

ACP, through its previously released Green Hydrogen Framework, has proposed to grandfather in the early-mover projects under annual time-matching as long as they start construction before January 1, 2029. That’s in contrast to guidance for the 45V clean hydrogen tax credit that would require renewable energy generation associated with green hydrogen projects to be matched hourly beginning in 2028.

The trade group, which consists of 800 clean energy companies, previously argued against too-soon hourly matching in a November white paper. Representatives of ACP did not immediately respond to requests for comment.

In response to the IRS guidance, ACP is seeking to underscore that, without grandfathering, early projects will have to be designed from the start to meet hourly matching requirements, significantly increasing costs and negating the benefits of annual time matching, sources said.

The notice of public rulemaking on 45V was issued on December 26, and is open for public comment for 60 days. The tax credit rules, which would require strict adherence to the so-called three pillars approach for incrementality, temporal matching, and deliverability, are viewed by some in the industry as overly burdensome.

ACP’s position is that the project finance market can handle some changes midstream in long-term agreements, but not fundamental shifts like transitioning from annual to hourly time matching. 

This switch could lead to a dramatic decrease in green hydrogen production and a concurrent exponential increase in production costs. Investors, anticipating these risks, might finance green hydrogen production agreements as if they were under an hourly regime from the beginning, thereby eliminating the initial benefits of annual time matching, according to the sources familiar.

A Wood Mackenzie study estimates that hourly time matching requirements could result in a price increase of 68% in Texas and 175% in Arizona, for example.

ACP, according to sources, stresses that the absence of grandfathering would create an economic cliff for agreements straddling both accounting systems. This would add to project costs, potentially discourage customer interest in green hydrogen, and hinder the industry’s maturation, the sources explained. In contrast, grandfathering first-mover projects under an annual time matching regime would ensure competitive production costs, driving demand for green hydrogen, the trade group believes.

Moreover, sources explained that ACP’s position is that the transition from annual to hourly matching without grandfathering would likely necessitate assuming hourly matching from the onset in power purchase agreements, leading to higher hydrogen costs from the start. This could delay green hydrogen industry development and give an advantage to blue hydrogen with early adopters, potentially excluding green hydrogen from the market.

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Biomass technology company launching US projects

Comstock Inc, a biomass technology company, is gearing up to build a fleet of plants that will use yield-enhancing technology to convert woody biomass into clean fuels.

Comstock Inc, a biomass technology company, is gearing up to build a fleet of plants that will use yield-enhancing new technology to process woody biomass into an intermediate product that can be further refined into clean fuels.

The company, traditionally a miner focused on gold and silver mining in Nevada, has been transformed into a technology innovator seeking to build, own, and operate a portfolio of carbon neutral extraction and refining facilities in the US, CEO Corrado De Gasperis said in an interview.

“We’re finalizing all of our documentation on readiness and engineering, and then we’ll be working to select an EPC, and then we’ll be ready to bond and finance,” he said.

Comstock, which trades on the NYSE, is currently engaged in the process of securing access to feedstock, and has mapped out nine regions in the U.S. which, combined, produce between 85 – 100 million tons of woody biomass residuals per year.

In parallel, the company is seeking to incentivize growth of trees like hybrid poplar that can be used as feedstock in the future, De Gasperis said. “We’re going to be building the backend of the supply chain with a feedstock strategy, accessing existing residuals, and then building these facilities,” he added.

In Minnesota, for example, there are around 300 sawmills with no place to send their sawdust and excess woodchips following the closure of several wood-to-energy plants, said David Winsness, a president at Comstock.

“Those are the materials that shouldn’t be sitting there – we should be converting them into fuel,” Winsness said.

Building plants

The company has set an objective to generate “billions” in revenue by 2030 – something it would achieve largely through building and operating the woody biomass plants near where the feedstock is located. Comstock also sells related services and licenses selected technologies to strategic partners.

Using simple math, Comstock could achieve its revenue goal by building and operating 10 facilities that produce approximately 1 million tons of clean fuels per year.

A plant producing 1 million tons per year would require capex of between $600m – $750m to build, and would likely be constructed using a project finance funding model, De Gasperis said. The company has not yet selected a financial advisor.

De Gasperis believes large refiners will want to co-build the facilities along with Comstock – which could also entail a strategic equity investment from the selected refiner and lead to a faster construction process.

“Speed and throughput is the goal,” he said, noting that the company has been engaged with roughly 12 of the large clean fuels refiners on a potential partnership. “The faster we’re producing these carbon-neutral gallons, the faster we’re decarbonizing, and the faster we’re making money.”

The company has private equity funds and infrastructure funds on their radar as potential investors but has not engaged with them yet.

The other half

Comstock’s technological breakthrough comes in its ability to produce a biointermediary – called bioleum – from a part of the woody biomass that is not cellulose, and which can be used to produce drop-in fuels. (Importantly, under new EPA rules implemented in June 2022, biointermediaries such as bioleum can be sold on to refiners, whereas previous rules required co-location with the refineries.)

“Cellulose only counts for 50% of a tree,” said Winsness. “For every gallon of fuel generated from cellulose, we’re getting another gallon from the byproduct. It’s a huge change for the industry to be able to get that much more throughput from the same amount of biomass.”

The Department of Energy recently issued a funding opportunity for projects that can produce more than 60 gallons of ethanol from 1 ton of wood feedstock, De Gasperis said.

“We saw that and we said, ‘We’re already there. We can do much more,’” he added.

Comstock can currently produce about 70 gallons of ethanol from 1 ton of wood, using cellulose. Meanwhile, with the non-cellulose half of the wood in 1 ton of feedstock, the technology can produce an additional 30 – 40 gallons of renewable diesel or aviation fuel.

The company has partnered on a process to convert ethanol to drop-in fuel, with the ultimate goal of producing 100 gallons of drop-in fuels from 1 ton of wood feedstock, according to De Gasperis. “All of our development is to stabilize the breakthrough we had on the bioleum – the heavy cellulose components of the wood is where our technology breaks through and shatters this.”

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