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Heliogen reaches offtake agreement with California city at $10/kg

Heliogen signed a definitive offtake contract with Lancaster, California, the city's first green hydrogen offtake agreement.

Heliogen, Inc., a provider of AI-enabled concentrating solar energy technology, has executed a definitive contract with The City of Lancaster, California to produce green hydrogen to be purchased by Lancaster for the city’s growing green hydrogen fuel needs.

The partnership represents Lancaster’s first hydrogen offtake agreement, according to a news release.

The green hydrogen will be produced at Heliogen’s Proxima hydrogen facility in Lancaster and will leverage Heliogen’s innovative technology using AI and advanced computer vision software to concentrate sunlight with mirrors, producing carbon-free hydrogen with significant economic development potential. As part of the agreement, Heliogen will provide green hydrogen to the City and will certify its carbon intensity, a measure of the CO2 emitted per kilogram of hydrogen produced. Proxima could ultimately help support other projects within the city and region, including sustainable aviation fuel, and sales and distribution of hydrogen fuel for industrial processes such as long-haul trucking, cement, and mining.

The agreement between Heliogen and Lancaster builds upon the previously announced MOU between the parties to establish a clean hydrogen generation facility, and is expected to contract hydrogen conforming to SAE J2719 hydrogen fuel cell vehicle specifications at a $10/kg offtake price. The wholesale-level price represents significant cost savings for the city amid rapidly increasing prices at hydrogen filling stations across California, with the average hydrogen pump price reaching an all-time high of $21.28/kg in November 2022, according to data provided to Hydrogen Insight by S&P Global Commodity Insights.

The collaboration furthers the City’s vision to become a model and leader for hydrogen as a clean, alternative energy source for municipalities. Lancaster, the nation’s first city to embrace hydrogen power, is an inaugural winner of the U.S. Department of Energy’s H2 Twin Cities Initiative.

“We are excited to advance our strategic relationship with The City of Lancaster and support its needs for green hydrogen fuel at scale,” said Christie Obiaya, Chief Executive Officer at Heliogen. “This agreement underscores the incredible potential to rapidly develop and commercialize green hydrogen as a key pathway for a decarbonized economy. I am proud of the Heliogen team for its work to demonstrate the value of our patented breakthrough technology to produce cost-effective green hydrogen, which will accelerate adoption of this critical, multi-use form of clean fuel all over the world.”

“As America’s first hydrogen city, Lancaster is proud to pioneer innovative solutions to drive change and decarbonize our economy,” said R. Rex Parris, Mayor, City of Lancaster. “Heliogen’s unique ability to create carbon-free hydrogen holds immense promise to fuel our municipal fleet at the lowest carbon intensity. Hydrogen is the future and we invite other cities to join us on the path to decarbonization as a way to tackle climate change.”

Heliogen has completed preliminary configuration designs and secured a site for Proxima.

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Air Products nearing project finance mega-deal for green ammonia facility

The Pennsylvania-based company is nearing completion of a $8.5bn project finance deal, which includes more than 20 global financial institutions and will fund its NEOM green ammonia facility in Saudi Arabia.

Air Products will now pursue a project finance mega-deal to build the NEOM Green Hydrogen Complex in Saudi Arabia.

The company and its partners will close a non-recourse debt deal for $6.2bn “very soon” to finance the project, CEO Seifi Ghasemi said today on an investor call.

The debt will sit alongside $2.3bn of combined equity from Air Products, NEOM, and ACWA Power, representing a 75%/25% debt to equity split.

Air Products, which is the sole offtaker for the facility, will now invest approximately $800m of cash into the project instead of the original $1.7bn.

Meanwhile, the cost of the project – which consists of 4 GW of renewables powering production of up to 600 tons per day of hydrogen – has climbed to $8.5bn compared to an original capital estimate of $5bn, according to the presentation.

But, Ghasemi added, the offtake price of the green ammonia to Air Products remains the same as what was negotiated in July 2020 when the project was announced.

“We are project financing this thing with some of the biggest banks in the world giving us money,” Ghasemi said. “They have looked at this project […] and they’re willing to finance it, so I guess they all think this is a good project and a good prospect and they’re going to get their money back.”

Ghasemi noted there could be some upside for additional hydrogen production at the facility when compared to the initial design.

The significant amount of wind, solar, and electrolyzer capacity installed at the site, Ghasemi said, “might end up giving us the capability of making a lot more than the 1.2 million tons per year.”

“I personally think they’re could be an upside, but we’ll have to wait and see,” he added.

The executive said the company evaluates projects individually as to whether it will pursue project financing. Among other projects, Air Products is also building the Net-Zero Hydrogen Energy Complex in Alberta, Canada which will not use project financing, Ghasemi said. The company will “look at” using project financing for its mega-scale Texas green hydrogen project with AES, he added.

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Air Liquide Finance announces cash tender offers for two series of USD Notes

The tender offers to purchase for cash up to $350m of its outstanding 2.500% notes due 2026 and $100m of its outstanding 3.500% notes will enable the company to optimize its funding structure.

Air Liquide Finance has announced offers to purchase for cash up to $350m of its outstanding 2.500% notes due 2026 and $100m of its outstanding 3.500% notes due 2046, according to a press release.

“The Offeror intends, but is not obligated, to increase either or both of the applicable Maximum Tender Amounts to the extent necessary to allow for a combined acceptance of Notes validly tendered and not validly withdrawn at or prior to the Early Tender Time up to an aggregate maximum principal amount for both series of up to [$500m],” the release states.

Air Liquide has retained BofA Securities Europe SA, Citigroup Global Markets Limited and Natixis Securities Americas to act as the dealer managers for the tender offers, and Global Bondholder Services Corporation to act as the information and tender agent.

The Tender Offers will expire at 11:59 p.m., New York City time, on April 11, 2023.

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FuelCell Energy reaches COD on Connecticut fuel cell plant

The 7.4 MW project on the U.S. Navy Submarine Base is financed in part through a previously announced tax equity financing transaction with East West Bank.

FuelCell Energy, Inc. completed site construction and commencement of commercial operations (COD) for its project on the U.S. Navy Submarine Base in Groton, Connecticut on December 16, 2022, according to a news release.

Achieving commercial operations of this project adds 7.4 MW to the company’s generation operating portfolio, bringing the total to 43.7 MW, although the project will operate at approximately 6 MW during the first year of operation.

“We are excited to announce COD of our grid resiliency and micro-grid ready clean energy project at the U.S. Navy Submarine Base, bringing cleantech innovation to our country’s most critical infrastructure,” said Jason Few, president and chief executive officer, FuelCell Energy. “FuelCell Energy is proud to deliver a solution that supports the Navy’s decarbonization goals while encouraging clean energy partnerships and policies that enable the deployment of crucial grid modernization technology needed for the electrical grid in Connecticut and around the world.”

The project is financed in part through a previously announced tax equity financing transaction with East West Bank for $15m contributed to the project over three years.

This milestone partnership is East West Bank’s first fuel cell project, a testament to the value proposition of FuelCell Energy’s differentiated clean energy platforms.

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Avangrid touting green hydrogen opportunity in onshore renewables sale

Advisors selling up to 50% of the company’s US onshore renewables platform are pitching the value-enhancing potential of green hydrogen development in the process.

Avangrid is touting the opportunity to develop a major pipeline of green hydrogen projects as it prepares to collect initial bids for a stake in its US onshore renewables platform, according to two sources familiar with the matter.

The Portland, Oregon-based clean energy firm, which is owned by Spain-based Iberdrola, is running a process to sell up to a 50% stake in roughly 9.6 GW of operational projects and an 18 GW development pipeline, the sources said. The process launched in March with Lazard and Rothschild on the sellside.

As part of the platform’s opportunities for value enhancement, the company is promoting the potential for green hydrogen, with a sale teaser noting that parent Iberdrola is a global leader in green hydrogen development with two operational projects and 60 in development.

“[Avangrid] Onshore Renewables intends to leverage this experience to become an early leader in hydrogen project development in the US,” the teaser reads, stating a goal of building out some 900 MW of green hydrogen projects by 2035.

The company is also involved in seven “hydrogen hub” regions in the US: regions participating in the Department of Energy’s grant process for funding under the Bipartisan Infrastructure Act.

Avangrid last year signed an MoU with Sempra Infrastructure to develop large-scale green hydrogen and ammonia projects powered by renewable sources. The teaser notes that the company is advancing a flagship joint development project and initiating conversations with offtakers.

The operating renewables portfolio for sale includes 8.7 GW of wind power and some 300 MW of solar in Pennsylvania, Colorado, California, New York, Iowa, and North Carolina, along with the 536 MW Klamath cogeneration plant in Oregon. The development pipeline has roughly 14.2 GW of solar and solar-plus-storage capacity and 3.8 GW of wind.

Avangrid declined to comment. Rothschild and Lazard did not respond to requests for comment.

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US hydrogen and LNG developer raising capital

A Texas-based project developer is conducting a development capital raise for a flagship LNG and green hydrogen project in the Northeast.

New Energy Development Company, a Katy, Texas-based developer with offices in Boston, Texas, is raising between $5m and $8m for an LNG liquefaction, storage and re-gasification facility with additional green hydrogen production and storage, Partner Scott Shields said in an interview.

The company is not using a financial advisor, Shields said, noting that a larger second round capital raise will likely start near the beginning of 2024.

New Energy has secured a brownfield site for a peak-shaving LNG facility in New England with 2 billion cubic feet of storage capacity and 50 MW of solar pv, Shields said. Also planned is an expandable 40 MW PEM electrolyzer line.

He declined to name the state in which the project is located, adding that the company is trying to put a strong support system and marketing plan in place before the location is made public.

The proceeds of the capital raise will go in part to hiring local lawyers and engineering and design work (pre-FEED and FEED), through to FID, Shields said. The project will be built in two phases, Phase 1 being the LNG component and Phase 2 focusing on green hydrogen.

The LNG facility will be the offtaker for the hydrogen, which will run the plant when the solar is insufficient. Through an open season process New Energy has identified five investment grade offtakers for the LNG.

Ramping capex

“We’ve been self-funding up until now,” Shields said of New Energy, which has also put capital and development resources into half-a-dozen other projects around the country.

It’s time for a ramp up in capital expenditures and New Energy is in discussions with strategic and private equity providers, Shields said, noting that the company would prefer the former. Discussions include options to fund just the flagship project, as well as platform equity.

Shields noted that he has investment banking experience and that New Energy Managing Partner Alexander “Hap” Ellis serves as chairman of Old Westbury Funds and the George and Barbara Bush Foundation.

New Energy has partnered with McDermott International to develop patented GreenER hydrogen facilities, a modular, expandable hydrogen facility that can produce 24,000 kg per day (2,760 MMBtu) of renewable hydrogen. The companies in 2021 completed engineering deliverables for multiple designs which are marketed as ideal for grid-scale blending with natural gas pipelines, blending for existing or new power generating facilities and storage injection into salt caverns and above ground storage tanks.

The company has also combined GreenER LNG and hydrogen production and storage plants into an integrated energy hub, capable of producing an additional 200,000 MMBtu of LNG.

New Energy recently hired Chico DaFonte, formerly a vice president at Liberty Utilities, a subsidiary of Algonquin Power, as executive vice president working on LNG and hydrogen projects.

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New clean fuels firm takes first external financing

A clean fuels startup aiming to provide turnkey decarbonization solutions will be in the market for additional capital shortly.

Elemental Clean Fuels has closed on its first round of external financing from investors Piney Point Capital and Fusion Fuel Green plc, according to a company spokesperson.

The money will be used to build out the company’s pipeline and add new projects, which it plans to develop, own and operate. Clean fuels would be produced from renewables via electrolysis, followed by storage and transportation solutions, according to the company’s website.

Capital investment provided by Piney Point will be utilized by ECF to further develop its existing decarbonization portfolio in North America, as well as to expand its internal capabilities and add additional project assets (including the projects contributed by Fusion Fuel), according to a news release.

ECF is a business venture of CEO Zach Steele and CFO Jason Baran, former executives of Fusion Fuel who have executed and managed over $3bn in development projects in North America. They are joined by CDO Jeff Crone, a former vice president of engineering and construction services at Buckeye Partners.

In parallel, Fusion Fuel has also entered into a strategic technology partnership with Elemental, granting Fusion Fuel the right to bid on all PEM-based green hydrogen projects in Elemental’s North American pipeline for a period of three years, according to a release from Fusion Fuel.

Elemental has approximately 40 MW in pre-feasibility projects within its pipeline and is currently collaborating with Fusion Fuel on a feasibility study for a 2 MW green hydrogen project for a state utility to be delivered in 2024. This partnership will provide Fusion Fuel with exposure to the emerging North American green hydrogen market, whilst enabling the company to focus its near-term commercial efforts on the Iberian Peninsula and Northern Europe.

“We are extremely excited to have Piney Point as a partner as we progress our mission to drive growth in the emerging clean fuels market,” said Steele. “With investments in a broad range of companies across the energy transition, they are uniquely positioned to provide strategic partnerships and additional access across the value chain to drive scale.  Piney Point’s investment and expertise will accelerate the growth of our Company in the mobility and heavy industry sectors throughout North America.  We are also excited and optimistic about continued collaboration with Fusion Fuel going forward.”

“As investors, Piney Point Capital recognizes the immense potential of ECF in revolutionizing the clean fuel landscape. We believe in the vision and capabilities of the ECF team, and we are committed to supporting their mission to accelerate decarbonization through innovative projects and strategic partnerships across North America,” said Mike Keough, managing partner Piney Point Capital, a subsidiary of Racon Capital.

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