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Gevo awarded USDA grant for carbon tracking

A grant of up to $30m will support tracking the carbon intensity of corn destined for SAF production.

Gevo, Inc. announced today it has finalized and executed a Notice of Grant and Agreement Award with the U.S. Department of Agriculture (USDA) for a Partnerships for Climate-Smart Commodities grant of up to $30m for Gevo’s Climate-Smart Farm-to-Flight Program, according to a news release.

This program is aimed at tracking and quantifying the carbon-intensity (CI) impact of climate-smart practices while creating market incentives for low CI corn to help accelerate production of sustainable aviation fuel (SAF) and low-CI ethanol.

With the leadership and support of the USDA, we believe this grant will play a pivotal role in expediting the adoption of climate-smart farming practices and immediate market expansion of field-tracked, low-CI corn destined for SAF production in the area surrounding Gevo’s previously announced Net-Zero 1 (NZ1) SAF plant, currently under development in Lake Preston, South Dakota. The project will also accelerate the market adoption for climate-smart corn in close collaboration with Southwest Iowa Renewable Energy (SIRE), a dry-mill corn-based ethanol facility located near Council Bluffs, Iowa. An important part of the project is our aim to enroll majority female-owned farms in southeast Iowa and southeast Nebraska and Native American tribal organizations in South Dakota, including the Standing Rock Sioux Tribe.

“Our Farm-to-Flight Program, under this USDA grant, aims to count all the carbon at the field level and reward farmers on a performance basis for delivering low-CI corn, as well as to accelerate the production of SAF to reduce dependency on fossil-based fuel,” says Dr. Paul Bloom, Chief Carbon Officer and Chief Innovation Officer for Gevo, and Head of Verity. “The program will also focus on deploying our Verity Tracking platform with farmers to help them measure, report and verify their CI reductions.”

Gevo believes that the Argonne National Laboratory GREET model is the best available standard of scientific-based measurement for life cycle inventory or LCI. Verity, a Gevo program, uses the high-quality field and process level data, and the versatility of GREET to calculate the commodity’s carbon performance with a high degree of confidence that is traceable, immutable, and fully auditable. “The Verity carbon accounting platform will give us the ability to assign carbon-intensity scores to feedstocks on a field-by-field basis – creating financial grade climate smart commodities that carry their performance through the supply chain to the final biofuel products,” Bloom says. “This grant will help us apply the best science and reward growers for making a real difference to lower GHGs of biofuels.”

“When Net-Zero 1 and other production facilities come online, the feedstocks in the program will be a key to the equation,” says Dr. Patrick Gruber, CEO of Gevo. “This Partnerships for Climate-Smart Commodities grant will help ensure we count all the carbon through the entire business system and reward farmers for the good work they are doing.”

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Inside PG&E and Energy Vault’s California green hydrogen + BESS microgrid

Energy Vault will complete construction this summer on a microgrid asset utilizing hydrogen fuel cells and battery energy storage for a city in Napa Valley, California that’s in the bullseye for wildfire risk.

The small Napa Valley city of Calistoga was facing dire straits with its power grid just a few years ago. 

The city, known for wineries, mud baths, and hot springs, is considered ground zero for public safety power shutoffs to protect residents during wildfire season.

A temporary solution from Pacific Gas & Electric, the California utility that filed for bankruptcy in 2017 due to wildfire obligations, involved shipping in diesel generators to act as a backup to the grid when power was turned off. The utility issued three requests for proposals for a carbon-free solution before it found what it wanted: a design for the first long-term, clean energy, substation microgrid in its service territory.

“We read the RFP and said, ‘Let’s try to put in front of PG&E something that is unusual – not crazy, unusual,” said Marco Terruzzin, chief commercial and product officer at Energy Vault, a Switzerland-based energy storage developer whose design was selected by PG&E.

The company is on track to complete construction this summer on the Calistoga Resiliency Center, a system designed to instantly provide 8.5 MW of power for up to 48 hours during public safety power outages.

Calistoga Resiliency Center render: Energy Vault

The California Public Utilities Commission authorized PG&E to spend up to $46m on the project via a 10.5-year tolling agreement, but Terruzin noted that the cost of the project would be less than what was approved. He declined to comment further on the project’s economics.

Energy Vault is financing the project upfront with its balance sheet, but will eventually seek to back-lever the deal with the investment tax credit for standalone storage as well as potential third-party debt and equity investors.

Waiting until the project is commissioned will attract a better interest rate from project finance banks that might be nervous about lending to a first-of-kind project, Terruzin said.

“The interest rate instead of double digits, becomes single digits. And single digit means the project is financially more attractive also for potentially equity holders,” Terruzin said.

The project will receive the 30% ITC plus the 10% boost for domestic content, Garrofo said, and the firm will eventually monetize the credits in the transferability market.

“There is no urgency to sell the ITC this year, but if somebody pays 97 cents on the dollar, I would say that that is a no brainer,” he said. “Better to sell the ITC now.”

Target market

Terruzin acknowledges that the overall market for this sort of asset is not nearly as big as the battery energy storage market. But Energy Vault is still planning to sell the product to the wider public safety power shutoff market as well as to potential industrial end users and airports, Terruzin said.

“California, East Coast and also Colorado, there are some communities that are not willing to discuss the carbon intensity of the solution,” he said. “They want something that is not smelly, something that is not associated with fossil fuels, something that can stay there for 10, 20 years.”

At airports, due to issues connecting to the grid, car rental companies are looking for off-grid DC fast-charging solutions for electric vehicles, Terruzin said. And Energy Vault is preparing to launch a new product targeting this specific market.

“We’ll have liquid hydrogen providing 50 MWh of available electricity without any interconnection,” Terruzin said, a bridge solution for the next three to five years while utilities trench and install power to the airport.

Energy Vault met the domestic content requirements under the ITC for the Calistoga project in part because the fuel cells are from Plug Power. Eventually, Terruzin said, China will likely manufacture cheaper fuel cells following trends in the solar and wind industries.

Terruzin added that essential for these projects is the energy management software: Energy Vault worked with NREL to develop a system that amounts to “the secret sauce.”

“You have a bunch of equipment that’s designed to work together but if you don’t have the energy management software that orchestrates between these two or three different technologies to provide the power at the right time,” he said, “it would be worthless.”

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H2 Green Steel evaluating North American projects

Sweden’s H2 Green Steel is evaluating projects in North America in partnership with Vale.

Swedish green steel start-up H2 Green Steel is considering projects in North America through a joint feasibility study with Vale that would enable sustainable steel production.

The company said it would explore the potential to produce low-carbon steel value chain products like green hydrogen and hot briquetted iron in industrial centers in North America as well as Brazil.

H2 Green Steel yesterday closed on a €1.5bn equity private placement co-led by new investor Hy24, together with existing investors Altor, GIC and Just Climate. The transaction also includes new investors Andra AP - fonden and Temasek as well as a group of existing investors that continue to support H2 Green Steel with additional equity funding, including AMF, Cristina Stenbeck, Hitachi Energy, IMAS Foundation, Kinnevik, Schaeffler, Vargas and Wallenberg Investments holding company FAM.

The proceeds of that transaction will finance the construction and development of H2 Green Steel’s flagship large-scale green steel plant in Boden, Sweden. Groundworks have been ongoing on the site in Boden since summer 2022, and through this transaction H2 Green Steel takes another big leap towards start of operations end of 2025.

The plant will deliver steel with up to 95 percent less CO2 emissions compared to steel produced with traditional blast furnace technology. This is made possible by replacing coal in the production process with hydrogen, produced on-site with Europe’s largest electrolyzer, using electricity from renewable sources.

Since launch in 2021, H2 Green Steel has raised more than €1.8 billion of equity in three financing rounds. The company closed its series A equity round of €86 million in May 2021 and announced the close of its series B1 round of €260mn October 2022. On the debt side, H2 Green Steel announced in 2022 the structure for its debt financing of over €3.5 billion and renewed commitment letters in July 2023.

Morgan Stanley & Co. International plc acted as sole financial advisor to H2 Green Steel in the private placement.

In the green industrial hubs, Vale is expected to build and operate briquette plants, which will feed direct reduction reactors for the production of HBI and other metallics. The number of industrial hubs that will be built, their location and production capacity will be defined following feasibility studies to be developed jointly by the two companies.

In July, Vale and H2 Green Steel also signed an agreement to supply direct reduction pellets to the Boden plant. Vale expects to reach a production capacity of 100 million tons of agglomerates (briquettes and pellets) after 2030.

“We announced early on our journey that we want to explore other geographies where we can accelerate the decarbonization of the steel value chain. Both Brazil and parts of North America have great potential due to the access to both renewable energy sources, high quality iron ore, and political willingness to support decarbonization projects and it’s a great opportunity for us to explore our partnership with Vale beyond the pellet supply to our flagship plant in Boden,” said Kajsa Ryttberg-Wallgren, EVP growth and hydrogen business of H2 Green Steel, in a news release.

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Norwegian start-up tests direct ammonia fuel cell system

Alma Clean Power said the 6 kW direct ammonia fuel cell system was the highest power output ever demonstrated with this technology.

Alma Clean Power has successfully tested what it is calling the world’s first 6 kW direct ammonia fuel cell system.

The company is aiming to develop modularized Solid Oxide Fuel Cell (SOFC) systems for applications in the ocean space, and the 6-kW unit is the first building block of a complete 100-kW SOFC module. The test validates the company’s design of a direct ammonia fuel cell (DAFC) system, delivering an electrical efficiency of 61-67%, Alma said in a press release.

“I am very proud of the Alma team and their remarkable achievements in just over a year of system development. To our knowledge, this is the highest power output ever demonstrated with direct ammonia solid oxide fuel cells”, says Bernt Skeie, CEO in Alma Clean Power

Alma’s technology enables direct feeding of ammonia into the fuel cell system, bypassing the need for any energy intensive pre-treatment that converts the fuel into hydrogen prior to electricity production. With significantly higher efficiency levels compared to traditional combustion engines, this technology has the potential to make ammonia operated maritime energy systems economically viable for ship owners.

Green ammonia, produced by electrolysis powered by renewables, is a carbon-free fuel with great potential to decarbonize the maritime industries.

Alma’s SOFC system is currently operating seamlessly 24/7 and is monitored remotely with a sophisticated safety and control system. The SOFC modules are combustion-free with no rotating parts. They are designed to operate autonomously without any maintenance need for long intervals.

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Renewable hydrogen developer in exclusivity with strategic investor

A renewable hydrogen developer based in the western US is reaching the final stages of a capital raise with an investor in exclusivity.

NovoHydrogen, the Colorado-based renewable hydrogen developer, is in exclusivity with clean energy investment platform Modern Energy, according to two sources familiar with the matter.

ReSource reported in February that GreenFront Energy Partners was advising the company on a Series A.

NovoHydrogen CEO Matt McMonagle said previously that the company has about 30 projects in development in the US, ranging from a few megawatts to hundreds of megawatts. Its most active markets are the West coast, Northeast, Appalachia, Texas and the Rocky Mountains, though the company is not geographically constrained.

The company aims to begin construction on its first projects by the end of this year, the executive had said.

NovoHydrogen declined to comment. GreenFront and Modern Energy did not respond to requests for comment.

Modern Energy, a certified B-Corporation, recently put $90m into net metered solar developer Industrial Sun along with partner EIG. In 2020 EIG committed USD 100m to Modern Energy through a debt facility to fund the development of clean energy assets.

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Biomass-to-hydrogen developer in talks for development capital, series A

A California developer that uses woody biomass to make green hydrogen is in discussions to raise capital for project development and a series A funding round.

Yosemite Clean Energy, a California-based biomass-to-hydrogen start-up, is in discussions with potential investors to raise development capital for projects and a series A round.

The company is currently seeking around $20m of development capital that would help advance woody biomass-to-hydrogen projects to FID, CEO Tom Hobby said in an interview.

Hobby said he is also in discussions with strategic capital partners about a series A funding round. The company is not using an advisor for the capital raise, Hobby said, but is working with the law firm Kilpatrick Townsend & Stockton.

The company has so far raised less than $2m at the corporate level from friends and family and an additional $5m – including grants – for projects, Hobby added. The development capital as well as the series A raise would be conducted at the project level.

Yosemite has signed a letter of intent and term sheet for offtake from its first project in Oroville, California, which will produce approximately 24,000 kg per day (2,760 MMBtu) of green hydrogen from woody biomass, and is set for FID later this year. Hobby declined to name the offtaker but described it as a “global trading house.”

Hobby, whose family has lived in the Sierra Nevada for generations, emphasizes the company’s role as a partner with local communities to help manage forest waste, which has served as fuel for explosive wildfires in recent years.

“It’s de-risking their communities from catastrophic wildfires,” he said.

Design incentives

Under the original design for the Oroville facility, the company had planned to produce 31,000 kg per day of RNG and 12,200 kg per day of green hydrogen. But due to incentives for green hydrogen in the Inflation Reduction Act, the company has pivoted to a hydrogen-only design, Hobby said.

The $3/kg incentive for green hydrogen in the IRA created “additional value for no real capital cost differential,” he said.

Yosemite’s second project is in Toulumne County, California and will follow a design substantially similar to the Oroville facility.

The company employs dual-bed gasification technology licensed from Austrian firm Repotec, while Primoris is doing detailed design and engineering.

The technology takes wood and creates a medium-strength BTU gas that can be used to make different products, Hobby said. “Once it’s in a gaseous form, we can use it for a lot of purposes: we can take it to make power, we can produce hydrogen, we can use the Fischer-Tropsch process to make second-generation biofuels like aviation fuel, and we have a patent that can do hydrogen and RNG.”

Project ownership

Meanwhile, Yosemite has hired a Texas-based firm to help raise capital for projects, which are estimated to cost $250m at the outset, but could decline once efficiencies are achieved, Hobby said.

The company’s project ownership model is unique in that it seeks to bring in local wood businesses – in logging, land clearing, and orchard removal – as providers of biomass and also equity investors in the projects.

“To have their investment and their wood at the same time is huge,” Hobby said.

In raising capital for the projects, in addition to equity and debt investors, Yosemite is evaluating a mix of sources in the tax-exempt bond market as well as lower-interest loans from within California and export finance solutions. The company recently received two $500,000 Forest Biomass to Carbon-Negative Biofuels grants from the California Department of Conservation.

Hobby would like to build 50 woody biomass plants in California, which would utilize approximately 5 million tons of the 35 million tons of waste woody biomass available annually in the state.

“Our goal is not to have to truck and ship wood more than 50 miles,” he said. “If you put circles around every place in California that’s a decent wood basket […] I think we could sign about 50 facilities across the state.”

The company is also planning to expand beyond California to other states with a low-carbon fuel standard, Hobby said.

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AGDC seeks $150m in development capital for Alaska LNG project

The Alaska corporation is raising capital to reach FID on a $44bn LNG project that includes the construction of a natural gas pipeline and carbon capture infrastructure.

The Alaska Gasline Development Corporation (AGDC) is actively working to raise $150m in development capital for the Alaska LNG project, with Goldman Sachs providing advisory services.

This capital will cover third-party Front End Engineering Design (FEED) costs, project management, legal and commercial expenses, and overhead for 8 Star Alaska, the entity overseeing the project. Investors will receive a majority interest in both 8 Star Alaska and Alaska LNG as part of the fundraising efforts, according to a presentation​​.

AGDC, a public corporation of the state of Alaska, is hoping to finalize a deal for development capital in the next 12 months, but has not set a definitive timeline for the fundraise, AGDC’s Tim Fitzpatrick said.

The total cost of the project is estimated at $44bn, according to Fitzpatrick, and consists of three principal infrastructural components:

  1. Arctic Carbon Capture (ACC) Plant: Located in Prudhoe Bay on Alaska’s North Slope, this plant is designed to remove carbon dioxide and hydrogen sulfide before natural gas enters the pipeline.
  2. Natural Gas Pipeline: This 807-mile pipeline, with a 42-inch diameter, connects the ACC plant to the LNG facility and is capable of transporting 3.7 billion ft³/d of natural gas. It includes multiple offtake points for in-state residential, commercial, and industrial use.
  3. Alaska LNG Facility: Situated at tidewater in Nikiski, Alaska, this facility features three liquefaction trains, two loading berths, two 240,000 m³ LNG tanks, and a jetty. It is designed to produce 20 million tons per year of LNG​​.

Strategies to raise the necessary funds include collaborating with established LNG developers, strategic and financial investors, and possibly forming a consortium, according to the presentation. All project equity will flow through 8 Star Alaska, keeping the legal and commercial structure of the project consistent​​.

As of last year, the corporation was negotiating sales agreements for a significant portion of the Alaska LNG project’s capacity. Discussions include contracts covering 8 million tonnes per annum (MTPA) at fixed prices and market-linked charges, and equity offtake talks for up to 12 MTPA. Additionally, three traditional Asian utility customers have shown interest in a minimum of 3 MTPA, potentially increasing to 5 MTPA.

These negotiations involve traditional Asian utility buyers, LNG traders, and oil and gas companies, all credit-worthy and large-scale market participants, the company said. Some buyers are contemplating equity offtake, investing at the Final Investment Decision (FID) in exchange for LNG supplied at cost​​.

A key component of the project’s advancement is securing gas supply agreement terms, identified as a prerequisite by multiple investors. AGDC has held meetings with executives from two major producers to emphasize the need for Gas Supply Precedent Agreements to attract further investment. These discussions, highlighting the project’s importance to Alaska, were joined by key figures including the DOR Commissioner Crum, the DNR Commissioner Boyle, and representatives from Goldman Sachs​​.

The Japan Energy Summit, sponsored by AGDC, focused on the need for new LNG capacity in Asia. Japan’s Ministry of Economy Trade & Industry (METI) expressed strong support for new LNG investments and offtake, emphasizing the replacement of coal with gas in developing Asian markets​​.

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