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Gevo: Net Zero 1 facility to reach late stages this year

Executives for the Colorado-based company said its first alcohol-to-jet fuel facility in South Dakota will be financed late this year or early next.

Gevo’s Lake Preston alcohol-to-jet fuel facility in Lake Preston, South Dakota will be financeable this year and reach financial close late this year or early next, executives for the Colorado-based company said on an earnings call Thursday.

The company is working on a DOE loan guarantee for the project, dubbed Net Zero 1.

“Our work on the Department of Energy loan guarantee is going well, but as anyone who has worked on one of these knows, there’s a lot of engineering and upfront risk mitigation required much more than a typical balance sheet finance project,” President and COO Chris Ryan said on the call. “Our EPC partners are busy working with us to mitigate execution risk and ensure our contracts fit the DOE’s loan guarantee requirements.”

Finalizing the DOE loan done, raising the equity, and reaching financial close is expected to be achieved by late 4Q24 or early 1Q25, CEO Patrick Gruber said on the call.

“We want to see the CO2 pipeline in South Dakota move forward to keep Lake Preston as our most attractive site for producing sustainable aviation fuel,” Ryan said. “But we’ve developed a slate of potential sites that we’ve prequalified for future Net-Zero projects.”

Offtake partners are working to ensure that the contracted demand fits with the requirements of a DOE loan guarantee to finance the construction phase, Ryan said. Lake Preston is more than twice the size of the plant’s footprint, leaving room for future bolt-on projects.

“It’s in a location where many of the surrounding farms in the region already use climate smart agricultural practices, which reduces carbon footprint of the corn feedstock we plan to use there,” Ryan said.

The location is also near the wholly-owned RNG business in Northwest Iowa.

The company has targeted several sites for Net-Zero 2, Gruber said.

“They could be brought on pretty quickly, and all of it is done with partners,” he said. “All of this financing would be done at a project finance level, not at a Gevo level.”

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Chevron and JERA eyeing US liquid H2 carriers

The two companies are collaborating on “multiple lower carbon opportunities,” including liquid organic hydrogen carriers in the US.

Chevron New Energies and JERA are collaborating on multiple lower carbon opportunities in the US and Asia Pacific, according to a press release.

As part of their focus across the hydrogen value chain – including production, export, and transportation – the two companies will study liquid organic hydrogen carriers (LOHC) in the US.

Other industries include production, new technology commercialization, and the capture, utilization and storage of carbon.

The companies have signed a Joint Study Agreement to explore the potential co-development of lower carbon fuel in Australia and will conduct a feasibility study expected to be completed in 2023. Lower carbon fuel supplies to be produced in the region would seek to leverage Chevron’s LNG and CCS knowledge and experience.

JERA recently announced a collaboration with Uniper to produce up to 8 MTPA of clean ammonia in the US for export.

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Cement plant being decarbonized by TotalEnergies and Holcim

TotalEnergies and Holcim in Belgium have signed an MOU to work on the decarbonization of a cement production facility in Obourg, Belgium.

TotalEnergies and Holcim in Belgium have signed an MOU to work on the decarbonization of a cement production facility in Obourg, Belgium, according to a news release.

Various energies and technologies will be assessed for the efficient capture, utilization, and sequestration (CCUS) of around 1.3 million metric tons of CO2 per year.

The partnership will implement a new air-oxyfuel switchable kiln to capture and CO2 in the flue gases and TotalEnergies will use that CO2 for an e-fuel producing scheme and/or deposit it in geological storage in the North Sea.

“TotalEnergies will assess the development of renewable projects to power a new electrolyzer, which would generate the green hydrogen needed to produce e-fuels,” the release states. “This new renewable energy production capacity would also power Holcim’s new oxyfuel kiln, thus contributing to the decarbonization of the cement plant. Finally, the oxygen emitted by the electrolyzer would be used to fuel the new kiln.”

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Technip and Casale to jointly offer blue hydrogen technology

The companies will offer a process design package, equipment, and entire plants using oxidative reforming, autothermal reforming, and partial oxidation technologies.

Technip Energies (PARIS: TE) and Casale announce a new partnership to jointly license oxidative reforming-based technologies; autothermal reforming (ATR) and partial oxidation (POx) technologies for the blue hydrogen market, according to a news release.

ATR is a process to produce syngas that contains hydrogen, CO and CO2. It becomes cost-effective for low-carbon hydrogen when combined with carbon capture technology and suitable for larger-scale facilities.

As part of this collaboration, Technip Energies and Casale will be co-licensors of the technology and will offer Process Design Package (PDP), proprietary equipment and entire plants. In order to decarbonize hydrogen facilities, the ATR-based solution could achieve up to 99% of carbon capture rate.

Technip Energies’ two centers of excellence for hydrogen, Claremont CA, US and Zoetermeer, NL, will jointly execute with Casale PDP for ATR-based blue hydrogen projects.

Loic Chapuis, SVP gas & low carbon energies of Technip Energies, commented: “We are excited to announce this partnership with Casale, which will allow us to offer cutting-edge ATR-based solutions for the blue hydrogen market. By leveraging our global leadership in hydrogen, having delivered more than 30% of the installed capacity worldwide, with our combined proprietary technologies, we are confident that we can provide advanced and cost-effective solutions that will meet the needs of our customers. ATR-based solutions will be complementary to T.EN’s proprietary SMR-based solutions, allowing us to offer a complete range of solutions in the low-carbon hydrogen market. We look forward to working with Casale to drive innovation and decarbonize hydrogen production at scale.”

Federico Zardi, CEO of Casale SA, said: “We are delighted to enter this partnership with Technip Energies, a global leader in hydrogen plants. This partnership can provide the market with advanced solutions for the decarbonization of the world, leveraging our long history of developing and applying advanced ATR and POx technologies with several ATR-based mega production units already delivered, in combination with Technip Energies’ technological expertise in the hydrogen field.”

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Air Products CEO discusses mega-scale green hydrogen project with AES

Air Products CEO Seifi Ghasemi further discussed its JV with AES Corporation to develop a $4bn green hydrogen project in Texas, noting that roughly half the price tag would come from developing 1.4 GW of renewables to feed the electrolyzers.

Air Products and AES Corporation will form a JV to develop a $4bn integrated green hydrogen facility in Texas, with roughly half of the cost coming from development of 900 MW of wind and 500 MW of solar generation, and the other half for the hydrogen build-out, Air Products CEO Seifi Ghasemi said on an investor call today.

Similar to his company’s JV in Saudi Arabia, the 50/50 JV will develop, build, own and operate a facility in Wilbarger County, at the site of a decommissioned coal-fired plant, Ghasemi said on the call.

Air Products has an exclusive global agreement with thyssenkrupp for electrolyzers, and could include battery storage at the Texas site to help power the electrolyzers, he added.

A separate entity owned 100% by Air Products will be the sole offtaker from the facility, Ghasemi said, which will produce more than 100 mtpd for use in transportation and industrial markets.

The relationship between AES and Air Products is not exclusive, he said.

Air Products expects a minimum internal rate of return of 10%, Ghasemi said. The company is hoping the tax benefits of the project will result in a lower hydrogen price from the JV.

The amount of capital invested by Air Products will be determined by downstream uses, Ghasemi said. The company has yet to decide if it will build a liquefaction plant, transport gaseous hydrogen by pipeline, or convert the hydrogen to ammonia and ship it by rail.

When it was noted that there is not an existing pipeline connecting Wilbarger County to Air Product’s Gulf Coast pipeline, Ghasemi said he was being pressured to get more deeply in the topic than he wanted, but that the company was confident emerging industry in the area would provide the necessary offtake.

“We don’t have to send it all the way down 250 miles to our existing pipeline,” Ghasemi said. “There’s a lot of different options.”

Air Products will not issue new stock to dilute shareholders or jeopardize its A-rating, Ghasemi said.

The labor cost is “very low on these projects,” Ghasemi said. And customers are attracted to getting 30-year contracts not associated with the price of oil, natural gas or geopolitics.

Air Products is investing approximately $500m for a 35 metric ton per day facility to produce green liquid hydrogen at a greenfield site in Massena, New York, as well as liquid hydrogen distribution and dispensing operations.

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Siemens Energy NA executive priming for scale in hydrogen

The North American wing of the global technology company is in the earliest stages of engaging EPC providers and economic development officials for its next US electrolyzer manufacturing site, Richard Voorberg, president of Siemens Energy North America, said in an interview.

To say the demand for electrolyzer capacity has grown exponentially in 2022 comes across as an understatement, as customers in industry and energy have increased their orders multiple times over.

Siemens Energy North America’s electrolyzer – which is 18 MW and among the largest in the market – was too large for many customers just a year ago, Richard Voorberg, president of Siemens Energy North America, said in an interview. But following passage of the IRA, the question became how many the customer could get – and how fast.

“How quickly can I get 100 of your electrolyzers?” Voorberg said he hears now, whereas before that same customer might have asked for half an electrolyzer.

The decision to make an electrolyzer as large as 18 MW was part of the company’s strategy to have bigger capacity as the market for hydrogen expanded, Voorberg said.

HIF Global recently said it has tapped Siemens Energy to engineer and design their proprietary “Silyzer 300” electrolyzers to produce approximately 300,000 tons per year of green hydrogen at an eFuels facility in Texas.

Siemens Energy NA is now in the earliest stages of developing a new electrolyzer manufacturing plant in the United States, as previously reported by ReSource.

The US plant will be similar to the plant Siemens Energy is building in Berlin, and won’t be built until after Berlin is completed, Voorberg said.

The company is actively engaging with state economic development committees to scout locations, incentives and labor supplies. It is also in the early stages of engaging engineers, EPC providers and other development partners, Voorberg said.

“We also need to decide in the next few months what we want to do in-house, with our own shops, versus what we want to outsource,” Voorberg said.

North Carolina, Houston, Alabama and upstate New York are all in Siemens Energy’s existing footprint and are as such strong contenders for the new facility, Voorberg said, though nothing is set in stone as far as location. The company would finance the facility within its normal capex expenses within a year.

In electrolyzer manufacturing there is some “test hydrogen” that is produced, so there will be a need to find some small offtaker for that, Voorberg said. The company could also use it to supply its own fork-trucks in the future.

Open to acquisitions

Diving into an acquisition of another electrolyzer manufacturer probably would not make sense for Siemens Energy, Voorberg said. But the company is open to M&A.

He cited the acquisition of Airfoil Components in Florida as the type of deal that the company could move on again. In that case, the target company had expertise in casting that was easier to acquire than build from scratch.

“Does that make more sense that we buy it, that we outsource it, or should we be doing something like that ourselves?” Voorberg said are questions he often asks.

“When it comes to less complicated things, like a commodity market, that’s not something we play well in or need to play well in,” Voorberg said. “When it comes to a specialty design-type product, that’s where we at Siemens Energy shine.”

Right now, the Siemens Energy parent company has a bid out to acquire the third of Siemens Gamesa, the Spanish-listed wind engineering company, that it does not own, Voorberg noted.

Start-up opportunity

Siemens Energy, through its in-house venture capital group and partnerships with US universities, is interested in helping technology startups scale, Voorberg said.

“We can play in between them and the customers and do the introductions and potentially even partner in with some of our technology,” he said.

The company keeps close relationships with incubators at Georgia Tech and the University of Central Florida, among others, Voorberg said.

Equity investments will be made through the VC group, Voorberg said, noting that effort as one that is strategic in growing the energy transition, rather than financial.

Additional non-equity partnerships, similar to the fellowship with the Bill Gates-founded Breakthrough Energy, are on the table as well.

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Exclusive: Zero-emission locomotive start-up in Series B capital raise

A locomotive start-up focused on the US market for zero-emission freight trains is undergoing a Series B capital raise, with sights on a much larger Series C raise next year.

OptiFuel Systems, a provider of zero-emission line haul locomotives and generation solutions, is conducting a $30m Series B capital raise.

The South Carolina-based firm is seeking to finalize the Series B by the end of this year, and plans to use proceeds to advance production of its zero-emission technologies for the rail industry, which represents a massive decarbonization opportunity, CEO Scott Myers said in an interview.

Meanwhile, the firm will seek to tap the market for around $150m for a Series C next year, Myers added. The company is not working with a financial adviser. 

While the Series B will focus on bringing to production some of OptiFuel’s smaller rail offerings, such as the switcher locomotives, the Series C will be mostly dedicated to progressing testing, manufacturing, and commercialization of its larger line haul locomotive.

The company is also considering making its own investments into digesters for RNG facilities, from which it would source the gas to run its RNG-fueled locomotives. As part of its offering, OptiFuel also provides refueling infrastructure, and envisions this aspect of its business to be just as profitable as selling trains.

“We anticipate that we would be the offtaker” of RNG, “and quite potentially, the producer,” Cynthia Heinz, an OptiFuel board member, said in the interview.

A systems integrator, OptiFuel offers modular locomotives for the freight industry that can run on zero-emission technology such as renewable natural gas, batteries, and hydrogen. The company recently announced that it will begin testing of its RNG line haul locomotive, which is a 1-million-mile test program that will take two years and require 10 RNG line haul locomotives.

Image: OptiFuel

The company’s target market is the 38,000 operating freight trains in the U.S., 25,000 of which are line haul locomotives run by operators like BASF, Union Pacific, and CSX. Fleet owners will be required to phase out diesel-powered trains starting next decade following passage of in-use locomotive requirements in California, which includes financial penalties for pollution and eventual restrictions on polluting locomotives. Other states are evaluating similar measures.

“The question is not will the railroads change over: they have to,” Myers said. “The question is, how fast?”

Following completion of testing, OptiFuel aims to begin full production of the line haul locomotive – which has a price tag of $5.5m per unit – in 2028, and is aiming to produce 2,000 per year as a starting point. The smaller switcher units are priced between $1.5m and $2.5m depending on horsepower.

OptiFuel has held discussions with Cummins, one of its equipment providers, to source at least 2,000 engines per year from Cummins to support its production goal. 

“That’s a $10bn-a-year market for us,” Myers added.

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