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Fusion Fuel enters 10-year green hydrogen purchase agreement

NASDAQ-traded Fusion Fuel will produce the hydrogen at its projects in Evora, Portugal.

Fusion Fuel has signed a ten year offtake contract with European developer Hydrogen Ventures Ltd for thirty tonnes of green hydrogen per annum. First orders are expected to be delivered in the fourth quarter of 2023, according to a news release.

The hydrogen will be produced at the company’s projects in Evora, Portugal, where Fusion Fuel is expanding its production capacity to roughly 50 tonnes per annum by year end.

Hydrogen Ventures, which is developing a pipeline of green hydrogen projects and entering into supply contracts with local industrial and municipal customers, expects to use the hydrogen for mobility applications in Portugal. This contract represents Fusion Fuel’s second hydrogen purchase agreement in Portugal to date, providing long-term stability and price security to the nascent hydrogen ecosystem: a critical step forward in the creation of a more robust and competitive market for green hydrogen.

Pedro Caçorino Dias, Fusion Fuel’s head of Portugal, said, “We are very excited to announce the execution of this hydrogen purchase agreement with Hydrogen Ventures, the second such contract we have entered into so far this year. With our decentralized, distributed approach to hydrogen production, and robust project pipeline in Portugal, Fusion Fuel is well positioned to make green hydrogen accessible to a wide range of stakeholders, particularly for some of the more emergent applications – like mobility – that ascribe the highest value for green hydrogen today. We look forward to partnering with Hydrogen Ventures on this project and others to come as this market continues to develop.”

Horacio Carvalho, CEO of Hydrogen Ventures, added, “We see green hydrogen as a game-changer in the battle to combat climate change. Together with Fusion Fuel, we are putting in place a series of measures to connect the green hydrogen producer and the consumer. Our goal is to establish a robust, national logistics infrastructure, that takes its place in the green energy mix that Portugal will need to meet its Net Zero commitments. It is a golden opportunity to be part of an international movement, taking direct action to provide sustainable alternatives to fossil fuels. Hydrogen Ventures is taking this challenge head-on and is working globally on similar projects with companies like Fusion Fuel to mitigate the impact of greenhouse gases on our planet.”

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Verde Clean Fuels to develop lower carbon gas refinery in West Texas

The project would consume natural gas in the pipeline-constrained Permian Basin as feedstock, potentially mitigating the flaring of up to 34 million cubic feet of natural gas per day.

Verde Clean Fuels, Inc. and Cottonmouth Ventures LLC, a subsidiary of Diamondback Energy, have executed a Joint Development Agreement for the proposed development, construction, and operation of a facility to produce commodity-grade gasoline utilizing associated natural gas feedstock supplied from Diamondback’s operations in the Permian Basin.

The JDA provides a pathway forward for the parties to reach final definitive documents and Final Investment Decision for the proposed project, according to a news release. The JDA frames the contracts contemplated to be entered into between the parties, including an operating agreement, ground lease agreement, construction agreement, license agreement and financing agreements as well as conditions precedent to close, such as FID.

The expectation for the project is to produce approximately 3,000 barrels per day of fully-refined gasoline utilizing Verde’s patented STG+® process. By consuming natural gas in the pipeline-constrained Permian Basin as feedstock, the proposed project could demonstrate the ability to mitigate the flaring of up to 34 million cubic feet of natural gas per day, while also producing a high-value, salable product.

“The Verde Clean Fuels team is incredibly excited to finalize this JDA with Diamondback Energy with the goal to produce gasoline from natural gas in the Permian Basin,” said Ernie Miller, CEO of Verde. “This arrangement brings compounding economic and environmental benefits to West Texas. We believe that the ability to de-bottleneck midstream constraints along with the potential to reduce flaring of natural gas, while creating less carbon intensive gasoline, is of paramount interest to natural gas producers.”

“This agreement, with the first planned project in Martin County, fits perfectly with Diamondback’s strategy to decarbonize the oil field while ensuring a return for our investors,” said Kaes Van’t Hof, President of Diamondback. “Additionally, the scalability of the project is incredibly exciting, with similar natural gas-to-gasoline facilities possible across Diamondback’s locations in West Texas. We are proud to partner with Verde to bring this technology to the market.”

The proposed facility, which is to be located in Martin County, Texas in the heart of the Permian Basin, could serve as a template for additional natural gas-to-gasoline projects throughout the Permian Basin and other pipeline-constrained basins in the U.S., as well as address flared or stranded natural gas opportunities internationally.

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Nikola and BayoTech partner for clean hydrogen delivery

As part of the deal, Nikola expects to take delivery of low-carbon hydrogen produced by BayoTech commencing in Missouri this year and California in 2024.

Nikola Corporation and BayoTech, Inc. have agreed to advance reliable hydrogen supply for zero-emission commercial fuel cell electric vehicle fleets.

The strategic supply agreement includes Nikola Class 8 hydrogen fuel cell electric trucks, BayoTech HyFill™ bulk hydrogen transport trailers, and hydrogen produced at BayoTech’s distributed network of hubs, according to a news release.

As the anchor hydrogen offtake customer, Nikola expects to take delivery of low-carbon hydrogen produced by BayoTech commencing in Missouri this year and California in 2024. Nikola plans to acquire up to 10 BayoTech HyFill™ transport trailers, facilitating the distribution of high-pressure gaseous hydrogen from the production sites to refueling stations that serve fuel cell electric vehicle fleets.

“Nikola and BayoTech are united by a common goal of providing reliable access to hydrogen throughout the United States,” said Michael Lohscheller, President and CEO of Nikola Corporation. “BayoTech’s low-carbon hydrogen fuel and transport equipment will play an important part in supporting the adoption of Nikola’s Class 8 fuel cell electric zero-emission trucks.”

BayoTech will purchase up to 50 Nikola Class 8 fuel cell electric vehicles over the next five years, with the first twelve trucks being delivered in 2023 and 2024. The Nikola trucks will be paired with BayoTech’s HyFill™ bulk hydrogen transport trailers to deliver low-carbon hydrogen to offtake customers from BayoTech’s hydrogen production hubs.

“We’re immensely proud to be an industry leader in our commitment to deliver hydrogen to local customers via zero-emission fuel cell trucks,” said Mo Vargas, President and CEO, BayoTech. “Partnering with forward-looking companies like Nikola allows us to accelerate the deployment of our hydrogen hub network and stimulate the growth of the hydrogen ecosystem.”

The Nikola fuel cell electric vehicle offers a range of up to 500 miles, making it one of the longest-range zero-tailpipe-emission Class 8 trucks available and ideal for various applications, including drayage, intermodal, truckload, less than truckload, and specialized hauling.

Customers rely on BayoTech’s HyFill™ bulk hydrogen transport trailers to efficiently move hydrogen to distribution and dispensing sites, and to ultimately the end user, including retail refueling stations, backup power systems in remote areas, and industrial manufacturing sites.

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Copenhagen Infrastructure Partners invests in 220 GW green hydrogen pipeline

CIP, through its Energy Transition Fund I, has acquired a 26.67% stake in a development platform within CWP’s green hydrogen business.

CWP Global and Copenhagen Infrastructure Partners (CIP) today announced CIP’s strategic investment in CWP’s development portfolio of ultra-large-scale green hydrogen hubs, including projects across Africa, Australia and the Americas, according to a news release.

Under the deal announced today, CIP, through its Energy Transition Fund I, has acquired a 26.67% stake in a development platform within CWP’s green hydrogen business, thus seizing the opportunity to invest in the latter’s pipeline of green hydrogen hubs under development globally.

The investment brings together CWP’s leading green hydrogen team, built off the back of a two-decade track record in developing and operating utility-scale renewables projects, and CIP’s expertise in financing and developing large-scale green transition infrastructure. CIP’s backing represents a significant vote of confidence in the emerging green hydrogen sector from one of the world’s largest renewable energy infrastructure investors, according to the release.

As it currently stands, CWP’s green hydrogen hub portfolio has a planned combined renewable power generation capacity of nearly 220 GW.

Alex Hewitt, CEO of CWP Global, said, “We’re thrilled to welcome CIP to the CWP family, a new partnership that could not have come at a more important time. The race to net zero is on, and green hydrogen at scale will be a critical pillar for global decarbonisation, perhaps meeting one-fifth of global energy demand by 2050.”

Felix Pahl, Partner at Copenhagen Infrastructure Partners, said, “Achieving decarbonisation targets requires green hydrogen and green ammonia to be produced at scale. Through this investment, CIP’s Energy Transition Fund now further expands its participation in the development of gigawatt scale PtX developments. CWP has a proven track record in delivering onshore renewables and has already built a strong pipeline of PtX development projects.

With a strong management team and established regional footprints in Australia, Africa and Latin America, we expect CWP to become a global leader in developing ultra gigawatt-scale PtX projects and contribute significantly to decarbonisation of hard-to-abate sectors.”

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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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Mitsubishi laying groundwork for additional equity raise

Mitsubishi Power Americas and its JV partners are preparing to raise additional equity for the ACES Delta project in Utah, as well as for other hydrogen developments in the Americas.

Mitsubishi Power Americas is conferring with its financial partners to raise equity from existing investors in the Advanced Clean Energy Storage (ACES) Delta green hydrogen project in Utah, Senior Vice President, Investment and Business Development Ricky Sakai said in an interview.

Haddington Ventures formed Haddington ESP I and raised $650m in June 2022 from institutional investors to fund projects developed by ACES Delta, which is a joint venture between Mitsubishi Power Americas and Haddington portfolio company Magnum Development.

The investors — AIMCo, GIC, Manulife Financial Corporation, and Ontario Teachers’ Pension Plan Board — have additional rights to increase their collective investment to $1.5bn, according to a press release announcing the deal.

The first phase of the project in Utah will be to produce 100 tons of hydrogen per day. Once that is complete, existing investors can scale up their investment, Sakai said.

ACES Delta rendering

Mitsubishi is involved in several regional hydrogen hubs applying for funding from the US Department of Energy.

Hydrogen capable

Depending on how that $7bn is ultimately allocated, Mitsubishi is interested in replicating the Utah project in other regions, a source familiar with the company said.

MPA and Magnum recently closed on a $504.4m loan guarantee from the DOE for ACES Delta, electrolyzers for which will be supplied by Norway-based HydrogenPro.

ACES Delta will support the Intermountain Power Agency’s IPP Renewed Project — upgrading to an 840 MW hydrogen-capable gas turbine combined cycle power plant using Mitsubishi’s M501JAC gas turbines. The plant will initially run on a blend of 30% green hydrogen and 70% natural gas starting in 2025 and incrementally expand to 100% green hydrogen by 2045.

Mitsubishi is also supplying the hydrogen-capable gas turbines to Entergy’s Orange County Advanced Power Station; to an Alberta coal plant owned by Capital Power; and to J-Power’s Jackson Generation Project in Illinois, which reached commercial operations last year.

Mitsubishi Power

Investing in startups

Mitsubishi is doubling down on a strategy of investing in startup producers and technology in renewable fuels, Sakai said.

Recent investments in the space include: C-Zero, a drop-in decarbonization tech startup in California; Cemvita Factory, a Houston-based synthetic biology firm focused on the decarbonization of heavy industries; Infinium, an electrofuels company innovator in California forming decarbonization solutions for industries in Japan; and Starfire Energy, a modular green ammonia solution provider in Denver.

Series A and Series B valuations for US companies are much higher now than they were a few years ago, Sakai said. Still, the US is the leading climate tech startup ecosystem in the world and provides rich opportunity for capital deployment, Sakai said. Biofuels, SAF and waste-to-energy are leading sectors for MHI investment moving forward.

“We have several hundred of these in the pipeline that we are looking at right now,” he said. “In the next few years, we will increase the number of these portfolio companies.”

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Exclusive: TransGas CEO talks mega ammonia project

The owners of a proposed colossal ammonia production facility in Appalachian coal country are in the beginning stages of seeking liquidity, EPC contracting, and advisory services for a project they say will ultimately be financed akin to an LNG export terminal.

It’s an appeal often made in modern US politics – doing right by those left behind.

Perhaps no place is more emblematic of that appeal than West Virginia, and perhaps no region in that state more so than the southern coal fields. It’s there a fossil developer is proposing the architecture of the ruling coal industry be used to build a $10bn decarbonized ammonia facility and is gathering the resources to do so.

“It’s world class, and it makes southern West Virginia, Mingo County, the catalyst for the 21st century’s energy revival,” said Adam Victor, the CEO of TransGas Development Systems, the developer of the project. “The people [here] are the heirs and descendants of the people that mined the coal that built the steel that built the Panama Canal.”

The Adams Fork Energy project in Mingo County, jointly developed by TransGas and the Flandreau Santee Sioux Tribe, is slated to reach commercial operations in 2027. Six identical 6,000 mtpd ammonia manufacturing plants are being planned on the site of a previously permitted (but not constructed) coal-to-gasoline facility.

ReSource exclusively reported this week that the state has issued a permit to construct the facility. TransGas owns 100% of the project now, though if the Tribe comes through with federal funding then it will become the majority owner.

TransGas itself could take on a liquidity partner to raise up to $20m in development capital for the project, Victor said. The company is not using a financial advisor now but will hire one in the future.

White & Case is TransGas’ legal advisor. The company is in discussions with Ansaldo Energia, of Italy, about construction.

“The project is not averse to talking to private equity or investment bankers, because nothing has been decided right now,” Victor said, noting that the company is just beginning talks with infra funds and is eager to do so. “The project will be looking for an EPC.”

The first of the six plants will cost about $2bn, but each one will get successively less expensive, Victor said. Total capex is about $10bn, though there is discussion of acquiring adjacent land to double the size of the project – or 12 plants in all producing 6,000 mtpd each.

TransGas has the support of West Virginia politicians like Sen. Joe Manchin and Gov. Jim Justice, Victor said. Financing the project will be a function of the offtake.

Electricity for data centers, or ammonia for export?

The company is conducting a market analysis to determine avenues for offtake, Victor said. They could do partial electricity generation onsite to power a data center, with the remainder of the hydrogen being used to make ammonia for shipment overseas.

Depending on the needs of offtakers, the facility could also do one or the other entirely, he said.

The project, if configured at current size, could support about 6,000 MW of non-interruptible power generation, 2,000 MW of that for cooling.

“This could basically become a 6,000 MW campus to become the center of data centers in the United States,” Victor said, noting that the region is much less prone to natural disasters than some others and is high enough in elevation to escape any flooding. “I think we could rival Loudoun County [Virginia] as where data centers should be located.”

Adams Fork sits on the largest mine pool reservoir in the eastern US, Victor noted. Data centers need constant cooling, particularly new chip technology that requires liquid cooling.

TransGas will know in a matter of weeks if it’s going to go the electrical route, Victor said. There are only five companies in the world with data centers large enough to efficiently offtake from it: Amazon, Microsoft, Google, Meta and Apple.

If not, the facility will continue down the path of selling the decarbonized ammonia, likely to an oil company or international ammonia buyer like JERA in Japan.

Partnering with a tech company will make it easier to finance the project because of high credit ratings, Victor said. International pressure on oil companies could affect those credit ratings.

“We think the investor world could be split,” he said, noting tech and fuels investors could both be interested in the project. “You’re doubling the universe of investors and offtakers.”

He added: “Once we have the offtake, we think we could have a groundbreaking this year.”

Two ways of shipping

For ammonia production the facility could use the same shipping channels the coal industry uses – either to the Big Sandy River to be sent by barge on the Ohio to New Orleans, or rail to ports in Baltimore; Norfolk, Virginia; and Savanna, Georgia.

By rail, two 40-car trains per day would take ammonia to port. Norfolk Southern and CSX both operate in the region.

Another option is to have a fleet of 50 EV or hydrogen-powered trucks to transport ammonia to the Big Sandy where electric-powered barges can take it to the Gulf, Victor said. That latter option could mean a lower CI score because it will eliminate rail’s diesel power.

Mercedes-Benz and Volvo both make the kind of trucks used for this work in Europe and Asia, he said. Coal mines in the region use diesel trucks in fleets as numerous as 500, and the original TransGas coal plant was permitted for 250 trucks per day.

“This is something that our offtake partner is going to determine,” he said. Japan would likely want the ammonia in the Gulf of Mexico, whereas European shipping companies would want it on an Atlantic port.

The LNG financial model

The offtakers themselves could fund the facility, Victor said.

“The financial model for this is the financial model for funding LNG terminals,” he said. “The same teams that put those large facilities together, financial teams, would be the same teams that we’re talking to now.”

The offtakers may also dictate who they want to be the financial advisor, he said.

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