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Green hydrogen developer Monarch Energy signs MoU for clean power with Entergy

Entergy Texas will work to leverage existing transmission infrastructure and/or construct new generation resources for Monarch’s 500 MW green hydrogen electrolyzer project near Beaumont, Texas.

Entergy Texas and Monarch Energy, a company known for its green hydrogen and electro-fuels projects, have signed a memorandum of understanding to help advance the energy infrastructure in Southeast Texas, according to a news release.

As part of the agreement, Entergy Texas will work with Monarch Energy to leverage existing transmission infrastructure and/or construct new generation resources to supply long-term renewable power to Monarch’s 500 MW green hydrogen electrolyzer project near Beaumont, Texas.

“Southeast Texas is growing at a rapid pace, and it’s essential we make investments that help power that growth and support a resilient electric system,” said Eliecer Viamontes, president and CEO of Entergy Texas. “This partnership with Monarch Energy allows us to diversify our generation portfolio while also strengthening the region’s economic development.”

Monarch Energy’s hydrogen electrolyzer project represents a potential $500 million investment in the Beaumont region, creating over 500 temporary construction jobs and over 30 permanent operational jobs. Monarch Energy began development of the facility in 2021 and expects to commence commercial operations in 2026.

“Monarch is excited to be working with a best-in-class partner in Entergy Texas,” said Ben Alingh, co-founder and CEO of Monarch Energy. “Securing a reliable supply of clean power is critical to the success of our green hydrogen project in Beaumont.”

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Mitsubishi to participate in Louisiana DAC project

Mitsubishi will join a DAC project in Louisiana, where Shell is leading engineering and deployment.

Mitsubishi Corporation will participate in the Pelican Gulf Coast Carbon Removal Project, according to a news release.

The project, whose participants include Louisiana State University, Shell, and the University of Houston, aims to eliminate 1 million tons of CO2 annually through DAC and underground storage.

The US Department of Energy awarded a grant for the project feasibility study in 2023.

Through the project, MC collaborates with multiple third-party DAC technology companies in order to identify innovative technologies anticipated to substantially lower costs, advancing the technology maturation through detailed evaluation and engineering works with the goal of facilitating the early commercialization of DAC.
This project will be in collaboration with Shell US Gas & Power, who is leading the overall engineering and deployment as part of the project. The project scope centers on a feasibility study that includes evaluating the performance of multiple DAC technologies by demonstrations, supporting DAC technology companies as they design deployments, investing in prioritized distinct DAC technologies, and identifying opportunities to reduce the energy, water, and land resources required for carbon removal, as well as defining the technology needs for future deployment at scale.
MC is committed to contributing to the achievement of a carbon-neutral society. This includes plans to utilize captured CO2 as feedstock for producing synthetic fuels such as e-natural gas and Sustainable Aviation Fuel (SAF) on a long-term basis, while also aiming for the global expansion of the DAC business.
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$400bn investment needed in US SAF facilities by 2050: report

The report from SkyNRG identifies a $400bn investment opportunity, but notes SAF industry constraints in the form of policy instability and a lack of available feedstocks.

The US sustainable aviation fuel industry needs to invest $400bn in new production facilities if the country is to reach domestic SAF production of 27 billion gallons – equal to 2019 jet fuel demand – by 2050.

Federal tax incentives included in the Inflation Reduction Act will drive SAF production in the US, and could bring capacity to 3 billion gallons by 2030 and reach a 100% jet fuel replacement rate by 2050, according to a report from SkyNRG, a Dutch-based SAF producer.

The report highlights the available tax credits in the form of the Sustainable Aviation Fuel Blender’s Tax Credit of $1.75 per gallon; the Clean Fuel Production Tax Credit available from 2025 – 2027; and the Hydrogen Producer Tax Credit of up to $3 per kg for 10 years for facilities operation before 2033.

Constraints on industry growth include the lack of long-term policy stability and potential strains on availability of SAF feedstocks, according to the report.

“To meet aspirational goals in the US, more [project] announcements would be needed,” a summary of the report says, noting that most new projects will likely use feedstock from corn ethanol and waste materials like agricultural waste, waste biogas or household waste.

Even so, deployment of bio-intermediate pathways like RNG in early years is constrained by the pace of project development, permitting new facilities, and federal policy adaptation.

Meanwhile, the report says, fats, oils and grease markets are under pressure; for new projects in this segment – known as HEFA, or HVO – to materialize, feedstock needs to be freed up by diverting from renewable diesel and biodiesel plants or by producing more vegetable oils domestically.

“With ambitious goals at the federal level around electric vehicles and with several states implementing zero-emission truck sales requirements, it is possible that additional feedstock is freed up for SAF,” according to the report. “However, incentives currently favoring the production of biodiesel and renewable diesel over SAF would also need to shift for HEFA capacity announcements to be successful.”

The report additionally floats the following policy prescriptions to make more feedstock available:

• Curbing exports of whole soybeans to yet-to-be developed crushing facilities to increase soybean oil production. This would affect the US trade balance as well as impacting global soybean meal trade flows.

• Large-scale government support for novel non-edible oilseed crops suitable for conversion into fuel. Appropriate safeguards would have to be in place to avoid indirect land use change effects.

• Increasing soybean acreage by 40 million acres from 87 million acres today to meet soybean oil needs. This would impact corn and wheat markets as soy would have to largely expand on existing cropland. This could in turn have consequences for corn ethanol availability.

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Norway’s Nel to expand production capacity for US and EU green hydrogen

The norwegian electrolyzer manufacturer is to spend $36.2m to double the total annual alkaline production capacity in its Herøya factory, to 1GW, on the strength of rising demand for green hydrogen and production equipment.

Norwegian electrolyzer manufacturer, Nel, is to spend $36.2m to double the total annual alkaline production capacity in its Herøya factory, to 1GW, on the strength of rising demand for green hydrogen and production equipment that extends beyond Europe to the US.

The North American market will be important to Nel after US hydrogen tax credits were included in the Inflation Reduction Act, according to a company presentation.

In July, Nel Hydrogen Electrolyser AS, a subsidiary of Nel ASA, received its “largest ever purchase order” from an undisclosed US customer for 200 MW of alkaline electrolyser equipment for industrial application.

The contract for the electrolyser stacks is a firm order with a value in excess of $46m. Production and delivery of stacks is planned from February 2023 until mid-2024 at Nel’s large-scale electrolyser production facility at Herøya, according to a press release.

Following an ongoing engineering study, Nel could also get the opportunity to provide additional balance-of-plant (BoP) equipment for the project.

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Exclusive: Ammonia plant sale paused until commercial operations

The sale process for a Texas ammonia plant has been paused until the facility reaches commercial operations.

Gulf Coast Ammonia, the developer of a world-scale ammonia plant in Texas City, Texas, has paused a sale process until the plant reaches commercial operations, according to two sources familiar with the matter.

The process to sell the plant, which will produce 1.3 million tons of ammonia per year, was underway earlier this year, led by Jefferies as sellside advisor. The plant was expected to reach COD in 2023, according to documentation.

The project was initiated by Agrifos Partners LLC and advanced to FID in collaboration with joint venture development partners Mabanaft and Macquarie Capital. Following the FID taken in late 2019, GCA is wholly owned by a joint venture of Mabanaft and Lotus Infrastructure (formerly known as Starwood Energy).

GCA is investing $600m towards the construction, operation, and ownership of the ammonia plant, which is situated on land owned by Eastman Chemical Company within Texas City’s industrial park. It includes a portion of Eastman’s port access. 

In tandem with the ammonia plant construction, Air Products is building a $500m steam methane reformer to provide hydrogen to the plant via pipeline. Air Products noted in a recent investor presentation that the SMR project recently came onstream.

Officials at Lotus, Mabanaft, and Jefferies did not reply to inquiries seeking comment.

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Exclusive: Liquid hydrogen at room temp: Tech firm raising money to scale

A provider of liquid organic hydrogen carrier technology is finishing a second seed round with designs on a Series A next year. The technology allows hydrogen to be transported as a liquid at room temperature.

Ayrton Energy, the Calgary-based provider of liquid organic hydrogen carrier storage technology, is preparing to launching a second seed round and plans a $30m Series A next year, CEO Natasha Kostenuk told ReSource.

Ayrton, with 10 employees, allows hydrogen to be transported as a liquid at room temperature, Kostenuk said. The liquid can also be transported in existing infrastructure while mitigating pipeline corrosion.

The company’s target customers are hydrogen producers, utilities and hub-and-spoke logistical servicers.

To date Ayrton has raised $5m from venture capital and a similar amount will come from the next seed round, Kostenuk said. A 30 kg per day pilot project with a gas utility in Canada is underway and Ayrton will look to 10x that next year, she said, with eyes on 3 metric tonnes per day commercialization.

“It scales like electrolyzers,” she said of the technology. “We can get very large, very easily.”

Ayrton is now engaging investors and potential advisors, Kostenuk said. “It would be good to engage with us now.”

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exclusive

US hydrogen developer auditioning bankers

A US-based clean fuels developer has large capital needs for unannounced green hydrogen projects in California and Illinois, as well as an ammonia facility in Texas.

A US-based clean fuels developer has large capital needs for unannounced green hydrogen projects in California and Illinois, as well as an ammonia facility in Texas.

Avina Clean Hydrogen has yet to formally engage an investment banker to raise the equity and debt needed for a trio of projects under development in the US, CEO Vishal Shah said in an interview.

The company, which recently announced the formation of a strategic advisory board composed of executives from companies like Cummins, bp and Rolls Royce, will need $600m or more of debt and between $200m and $300m of equity, as previously reported by ReSource. Capital raising talks are focused on the operating company and project level.

Capital raises for Avina’s 700,000 mtpa green ammonia project in the Texas Gulf Coast and a larger operating company raise will launch next month, Shah said.

“The amounts that we are going to need to raise have gone up,” Shah said. “We are working with a number of banks but we’ve not engaged anyone formally.”

Buildout of the Texas project has been accelerated. The company recently announced an agreement with KBR for that project, which is scheduled to come online next year.

Project level capital has been raised for Texas and a green hydrogen project in Southern California, Shah said. An additional green hydrogen project in Illinois is in development as well.

Finding the renewable power

Renewable power needs for these facilities are big, but Shah said the company doesn’t see a shortage of power. Instead, developers are facing interconnection issues and subsequent cost increases.

Hydrogen developers in California are in many cases offering higher prices for renewable energy than other buyers, Shah said. The issue is that credit-worthy investment counterparties are often seen as more attractive offtakers regardless of the higher price offers from aspiring hydrogen producers.

“I would say California is different,” Shah said. “The offtake market is a challenge.”

There are renewables developers with a genuine interest in hydrogen looking at the sector as a long-term play, Shah said. But for some without a strategic interest in hydrogen, a community choice aggregator offering a 15-year offtake is more certain than a hydrogen developer offering a 10-year offtake; higher price can be seen as a trade-off.

“That’s the nature of the beast, right now.”

Regulatory uncertainty

Investors looking into the space are hesitating to deploy capital in some cases because of uncertainty around IRA clarifications, particularly with regards to the PTC qualifications, Vishal said.

“A lot of the customers, lenders, everybody’s waiting to make decisions,” Vishal said. Offtakers also have hesitations. “Nobody wants to sign long-term contracts in an environment where pricing is not clear.”

Shah said investors should look for offtake when investing in projects. Avina has two of three contracts signed for each of its projects.

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