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Green hydrogen developer gets $400m commitment from LS Power

LS Power has partnered with Monarch Energy to deploy a portfolio of green hydrogen projects throughout the United States.

Monarch Energy, a California-based green hydrogen project developer, and LS Power, a New York-headquartered North American Power and Energy Infrastructure manager, have formed a partnership to deploy a portfolio of green hydrogen projects throughout the United States, according to a news release.

LS Power plans to invest up to $400m into projects developed by Monarch as part of the newly established Clean Hydrogen Fuels, LLC platform.

LS Power provided $25m in preferred equity financing for Monarch Energy and will hold a seat on Monarch’s Board of Directors.  This investment will be used to advance Monarch’s pipeline of projects, expand to new regions within the US, and continue to add top talent to the Monarch team.

Monarch Energy is pursuing large-scale electrolyzer projects to deliver cost-competitive green hydrogen to customers in the refining, chemicals, fertilizer, long-haul transport, and other hard-to-decarbonize industries. Forming the Clean Hydrogen Fuels partnership will enable Monarch to leverage LS Power’s broad platform of expertise across project development, commodities, environmental attribute and credit risk management, power marketing, public policy and market development, and project finance.

“Executing one of the largest pipelines of green hydrogen projects in the US requires access to deep pools of capital, diverse skillsets, and a commitment to innovation. LS Power consistently operates at the vanguard of new technologies and exemplifies a brand known for building complex projects at industry-leading scale. Together, we unlock the potential to achieve great outcomes in hydrogen and eFuels for our customers,” said Monarch Energy CEO, Ben Alingh.

“Corporations and policymakers are seeking advancements in clean fuel solutions to accelerate the energy transition,” said David Nanus, President of LS Power Equity Advisors. “Green hydrogen can play a leading role in this effort. Given their team’s first-mover development efforts in the clean hydrogen space and deep skill set, we are excited to partner with Monarch Energy to advance its project pipeline and build on our successful efforts in other clean fuel categories such as renewable natural gas.”

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Maritime MoU to explore West Coast ammonia feasibility

The study aims to explore possibility to utilize existing ammonia storage terminal at port of Stockton for a pilot demonstration project of ammonia bunkering for car carriers.

American Bureau of Shipping, CALAMCO, Fleet Management Limited, Sumitomo Corporation and TOTE Services, LLC have executed a Memorandum of Understanding (MOU) to jointly conduct a feasibility study with the aim to be one of the pioneers in establishing a comprehensive and competitive supply chain for the provision of clean ammonia ship-to-ship bunkering in the US West Coast.

The study will be conducted at the Port of Oakland, Benicia and nearby major ports in U.S. West Coast, according to a news release.

Ammonia, which does not emit any CO2 when combusted, has long been considered one of the most promising alternative marine fuels to reduce greenhouse gas (GHG) direct emissions within the shipping industry which aligns with the revised International Maritime Organization (IMO) strategy to reach net-zero emissions from international shipping “close to” 2050 on a life-cycle basis.

CALAMCO is a California based cooperative composed of grower members, as well as the largest ammonia distributer in California. The study aims to explore possibility to utilize CALAMCO’s existing ammonia storage terminal at port of Stockton for a pilot demonstration project of ammonia bunkering for car carriers calling at port of Benicia and container vessels calling at port of Oakland as a first step toward wide adoption of ammonia as marine fuel in the US West Coast.

Port of Benicia is one of the key vehicle-handing ports in U.S. West Coast, while Port of Oakland also rank among top 10 of US largest container ports.

Safety assessments are critical to formulate standards for use of ammonia as a marine fuel due to the toxicity of the substance. Relevant government agencies and experts in the US will be engaged in working towards the standardization of safe operation and regulations, the news release states.

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HyTerra raising money for Kansas geologic hydrogen activities

Funds will finance drilling exploration for geologic hydrogen on the Nemaha Ridge in Kansas.

Australia-based HyTerra is raising AUD 6.1m for geologic hydrogen activities along the Nemaha Ridge in Kansas, according to an investor release.

Ther firm “is undertaking a capital raising of approximately AUD $6.1 million (before costs) through a placement to sophisticated
and professional investors and a subsequent fully underwritten non-renounceable rights issue to eligible shareholders,” with the funds allocated to execute a multi-well drilling program in Kansas.

HyTerra’s exploration acreage covers over 9,600 acres and is 100% owned and operated.

Hydrogen and helium occurrences have been recovered previously from wellbores within these leases. They are near agricultural and manufacturing facilities that are connected by rail, road and/or pipelines. Within these areas, the Company has identified multiple drilling targets covering a diverse range of geological plays.

HyTerra plans to continue leasing of high-priority acreage and drill two exploration wells. The timing of the drilling program is subject to regulatory and landowner approvals, as well as third-party contractor availability. However, it is HyTerra’s goal to commence drilling in 3Q24, according to the release.

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First Citizens finances acquisition of ammonia carrier

The financing supports Purus Clean Energy’s acquisition of the MV Green Power, a 40,000 cbm ammonia carrier.

The Maritime Finance group of First Citizens Bank has provided financing to Purus Clean Energy to support the acquisition of the MV Green Power, a 40,000 cbm ammonia carrier, according to a news release.

Purus Marine, the parent of Purus Clean Energy, provide slow-carbon maritime energy transportation and infrastructure systems. The company has a fleet of more than 50 low-carbon vessels in the offshore wind, LNG, ammonia, logistics and ferry sectors.

Maritime Finance, part of First Citizens’ CIT division, offers customized solutions for secured loans to a global client base of vessel owners and operators.

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Analysis: States with hydrogen use and production incentives

Some states are mulling hydrogen-specific incentives and tax credits as they wait for final federal regulations for clean hydrogen production, Bianca Giacobone reports.

[Editor’s note: Paragraphs six through nine have been modified to clarify that Colorado legislation does in fact include ‘three pillars’ language.]

Final guidelines for the federal hydrogen production tax credits are still a work in progress, but in the meantime, legislatures across the country have been mulling their own incentives to spur production. 

So far, 14 U.S. states have or are considering legislation that includes tax credits or other incentives for the use or production of hydrogen, five of which specify the hydrogen has to be “green,” “clean” or “zero-carbon.” 

The industry is waiting for the final regulations relating to the 45V tax credit for production of clean hydrogen, a draft of which was released last December, and states are similarly waiting to make their own moves. 

“States have interest in developing hydrogen programs, but they will lag the federal initiatives,” said Frank Wolak, CEO of the Fuel Cell and Hydrogen Energy Association. “The new suite of things that the states will do is largely dependent upon the reaction from the federal government, which is brand new.” 

The ones that aren’t waiting opt for vagueness. 

Val Stori, senior program manager at the Great Plains Institute, a non-profit focused on the energy transition, notes that Washington state has a bill supporting renewable electrolytic hydrogen, but it doesn’t specify whether electricity has to be sourced directly from renewables or if it can come from the grid. It doesn’t touch upon the more granular “three pillars” requirements for clean hydrogen which could be included in federal regulations: new supply, temporal matching, and deliverability.
“The lack of specificity is the trend,” she said.

Meanwhile, Colorado’s Advance the Use of Clean Hydrogen Act is the exception to that rule with what’s considered the country’s first clean hydrogen standards, including “matching electrolyzer energy consumption with electricity production on an hourly basis” and requiring that “the electricity used to produce clean hydrogen comes from renewable energy that would otherwise have been curtailed or not delivered to load or from new zero carbon generation.”
The standard will be enforced starting in 2028 or when the deployment of hydrogen electrolyzers in the state exceeds 200 MW.

(Colorado also has a Clean Air Program and a recently launched Colorado Industrial Tax Credit Offering that can offer financial support for industrial emissions reduction projects, including hydrogen projects, but they don’t mention hydrogen use or production specifically.)

“You might see the beginnings of laws that are starting to appear now,  but it might take two or three years before states build the momentum to figure out what they should be doing,” said Wolak. 

Nine out of the 14 states that have hydrogen-specific legislation don’t target clean hydrogen, but hydrogen in general. Kentucky, for example, has a 2018 tax incentive for companies that engage in alternative fuel production and hydrogen transmission pipelines. 

More recently, Oklahoma introduced a bill that proposes a one-time $50m infrastructure assist to a company that invests a minimum of $800m in a hydrogen production facility. According to local news reports, the bill is aimed at Woodside Energy’s electrolytic hydrogen plant in Ardmore. 

“We are an oil and gas state and we will be a primarily oil and gas state for a long time,” Oklahoma Senator Jerry Alvord, the bill’s sponsor, said in an interview. “But we could be at the forefront in our area of hydrogen and the uses that hydrogen puts before us.” 

Depending on the state, general hydrogen incentives could potentially add to federal tax incentives for clean hydrogen projects. 

Meanwhile, other states have been implementing Low Carbon Fuel Standards to encourage the development and use of clean fuels, including hydrogen, in transportation.

Last month, for example, New Mexico enacted its Low Carbon Fuel Standard, a technology-neutral program based where producers and vendors of low-carbon fuels, including clean hydrogen, generate credits to sell in the clean fuels marketplace, where they can be bought by producers of high carbon fuels. 

Similar programs exist in Oregon, Washington, and California, which was early to the game and began implementing its program in 2011. 

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Denver green ammonia firm prepping series C capital raise

A green ammonia developer and technology provider is laying the groundwork for a series C capital raise later this year, and still deliberating on a site for its first project.

Starfire Energy, a Denver-based green ammonia producer, is wrapping up a series B capital raise and laying the groundwork for a series C later this year, CEO Joe Beach said in an interview.

The company completed a $6.5m series A in 2021 and finished a $24m series B last year. Investors include Samsung Ventures, AP Ventures, Çalık Enerji, Chevron Technology Ventures, Fund for Sustainability and Energy, IHI Corporation, Mitsubishi Heavy Industries, Osaka Gas USA, Pavilion Capital and the Rockies Venture Club.

Beach declined to state a target figure for the upcoming raise. The firm has not used a financial advisor to date.

Starfire is currently deliberating on locations for its first production facility to come online in 2026, Beach said. Colorado is a primary contender due to ammonia demand, while the Great Plains offer abundant wind energy.

The firm’s strategy is to use renewable energy and surplus nuclear power from utilities to create ammonia from hydrogen with no storage component, eliminating the problems associated with hydrogen storage and transportation.

Targeted offtake industries include agriculture, maritime shipping and peaking power fuel consumption.

“The demand is global,” Beach said, stating that he expects about 150 leads to convert to MOUs. “We get inbound interest every week.”

For future capital raising, Beach said the company could take on purely financial investors, as it already has a long list of strategic investors.

“The expectation is we will wind up with manufacturing plants around the world,” Beach said.

The “new petroleum”

Many hydrogen production projects have been announced worldwide in the last year.

Beach said he expects many of those to transition into ammonia production projects, as ammonia is much easier to export.

Now, Starfire is working on developing its ammonia cracking technology, which converts ammonia into an ammonia/hydrogen blend at the point of use for chemical processes. The final product form in that process is 70% ammonia, 22.5% hydrogen and 7.5% nitrogen – all free of emissions.

The company is using proceeds of its series B capital raise to develop its Rapid Ramp and Prometheus Fire systems. Rapid Ramp uses a modular system design for the production of green ammonia using air, water, and renewable energy as the sole inputs. Prometheus Fire is an advanced cracking system that converts ammonia into hydrogen, operating at lower temperatures than other crackers and creating cost-effective ammonia-hydrogen blends that can replace natural gas.

The advantage to using this technology is that it makes the export of a hydrogen product financially feasible, Beach said.

“You should see ammonia becoming the new petroleum,” he said of the global industry. Ammonia can be deployed internationally like oil and provide the dependability of coal.

Eventually Starfire will undergo a financial exit, Beach said. Likely that will mean an acquisition, but an IPO is also on the table.

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NOx mitigation firm looking to scale

A publicly listed company with a hydrogen burner project backed by one of the largest US utilities could accelerate growth with a capital infusion in pursuit of first-adopter clients. It offers technology that aims to mitigate an underappreciated aspect of the embryonic clean hydrogen ecosystem: blending hydrogen with natural gas can greatly increase NOx emissions when combusted.

ClearSign Technologies, the publicly listed burner solutions provider, is at an inflection point in the development of its products to serve players in the emerging hydrogen landscape, CEO Jim Deller said in an interview.

“We’re new,” Deller said of the company’s emergence on the hydrogen scene. The company is aggressively seeking a place in the hydrogen mainstream as it pursues first-adopter clients. “We need to get our install base up.”

ClearSign recently received a collaboration commitment and pledged funding for its 100% Hydrogen Ultra Low NOx burner project from Southern California Gas Co. This comes on top of the SBIR program Phase 2 Award for $1.6m from the DOE. The company has one year’s cash on hand, according to Deller.

Hydrogen blending increases the output of NOx emissions, which are heavily regulated, Deller explained. A 20% hydrogen blend with fuel gas, for example, causes a 40% increase in NOx emissions.

The goal of the project with SoCalGas is to develop NOx hydrogen burner technology, which the company believes will enable the adoption of hydrogen fuel for industrial heating.

“Your NOx permit is not going to change,” he said. “In order to use even a small amount of hydrogen in your fuel gas, you need a technology that’s going to allow you to maintain NOx emissions for an efficient price.”

Deller said he sees ClearSign as an enabler of the hydrogen transition, pointing to SoCalGas’ need to keep their clients compliant with their operating permits.

“They’re going to have to modify their technology to enable the combustion of hydrogen without exceeding their NOx permits, and that’s where we come in.”

A ‘pivotal point’

ClearSign is open to discussing partnerships and financial options to scale deployment of its technology, Deller said, pointing to potential markets in Texas and the Pacific Northwest.

“We’re certainly open to any company that has a compatible technology,” Deller said.

ClearSign is not engaged for M&A now, but it does have discussions with prospective financial advisors, company spokesperson Matthew Selinger said. “Like any small company, if we had more money we could potentially accelerate faster.”

The company is not considering a spin off now, Deller said, focusing instead on getting traction commercially. ClearSign has not historically taken on debt. Those types of business opportunities are not off the table, but technical synergy and strategic partnerships are first pursued for value creation.

“We’re at a pivotal point, I believe, in the development of our technology,” Deller said. “I’m open to talk about any ideas.”

A technology in development

The burner technology is also applicable to systems that use only hydrogen, Deller said. The Phase 2 DOE grant funding is meant to develop a full range of commercial burners that will operate through a range of fuel gasses up to and including 100% hydrogen.

ClearSign does not have additional partnerships pending announcement, Deller said. But what’s applicable in Southern California is relevant to discussions happening in proposed hydrogen hubs around the country.

The company is headquartered in Tulsa, Oklahoma, along with process burner manufacturing partner Zeeco. It uses third-party manufacturing and will continue to do so, Deller said.

ClearSign also has offices in Seattle and Beijing. The company’s US and Chinese businesses to not have a materials shipping relationship, Deller said. The model followed has manufacturing separated between countries.

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