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HTEC to receive B.C. funding for hydrogen trucking pilot

HTEC will buy, test and demonstrate hydrogen-powered trucks for fleet operators throughout B.C.

HTEC is set to receive $16.5m in funding from British Columbia for a pilot program that uses hydrogen to power commercial trucking.

Under the pilot, B.C.-based hydrogen-energy company HTEC will procure six different heavy-duty fuel-cell trucks and complete upgrades to a hydrogen-fuelling station in Tsawwassen and a maintenance facility in Abbotsford.

The B.C. Pilot Hydrogen Truck Project aims to start the use of hydrogen in the commercial transportation sector, according to a news release.

Colin Armstrong, president and CEO of HTEC, said: “Through the Province’s significant investment in zero-emission trucks in B.C., and the simultaneous development of robust infrastructure to enhance their operations, this pilot project symbolizes a remarkable leap toward a sustainable future. It marks the first-ever deployment of heavy-duty hydrogen fuel-cell electric trucks for a diverse range of fleet operators in the province, a historic moment for the trucking industry. We applaud the provincial government for their vision and support, and we are delighted to be the wheels on the ground and driving force behind this groundbreaking project.”

HTEC designs, builds and operates hydrogen production facilities, infrastructure and supply.

HTEC will buy, test and demonstrate the hydrogen-powered trucks for fleet operators throughout B.C. The project also brings together Canada’s world-leading hydrogen and vehicle-technology companies. The Province’s funding for the pilot is being administered by the Innovative Clean Energy (ICE) Fund.

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DOE issues advanced funding notice: $2.5bn for carbon capture

The DOE intends to provide up to $2.52bn to fund two carbon capture programs needed to reduce carbon emissions from the electricity generation and industrial sectors

The U.S. Department of Energy’s (DOE) Office of Clean Energy Demonstrations (OCED), in collaboration with the Office of Fossil Energy and Carbon Management (FECM), intends to provide up to $2.52bn to fund two carbon capture programs needed to reduce carbon emissions from the electricity generation and industrial sectors, according to a news release.

Established by President Biden’s Infrastructure Investment and Jobs Act, both the pilot and demonstrations programs will help drive the demonstration and deployment of carbon management technologies critical to addressing the climate crisis and meeting the nation’s goal of net-zero emissions by 2050, while also protecting industrial jobs and boosting job creation in communities across America.

Carbon capture represents an addressable market of nearly $100 billion by 2030 and $600 billion by 2050 just in the United States,” said Office of Clean Energy Demonstrations Director David Crane. “The nearly $5 billion of carbon capture pilot and demonstration projects that will be directly enabled by these two programs, together with the carbon tax credits authorized in the Inflation Reduction Act, will catalyze the commercial wave essential to a clean energy transition, which ensures safe, affordable, and reliable energy to the American consumer and empowers workers in every pocket of the country.”

Since the electricity generation and industrial sectors account for a significant portion of our nation’s carbon emissions, carbon capture, utilization, and storage (CCUS) is a critical component of reducing emissions and meeting our climate and energy transition goals. For the United States to reach net-zero emissions by 2050, CCUS will need to scale to potentially as much as 100 times today’s levels. Growth of this magnitude represents an exciting technological challenge and an extraordinary economic opportunity.

OCED’s role is to de-risk these transformational technologies and catalyze private sector investment through public-private cost share agreements. The Carbon Capture Large-Scale Pilots program will include up to $820 million for up to 10 projects focused on scaling transformational carbon capture technologies. The Carbon Capture Demonstration Projects Program will include up to $1.7 billion for approximately six projects to demonstrate commercial-scale carbon capture technologies, pipeline transportation, and geologic storage infrastructure. The pilot program seeks to catalyze earlier stage technologies with great potential, while the demonstrations program will focus on technologies that will further commercialization.

DOE understands, and intends to address, the concerns of frontline communities and environmental justice and climate organizations about how CCUS projects may negatively affect those communities, local environmental quality, and the overall climate mitigation efforts if not developed with appropriate safeguards. That is why applications to both funding announcements will require a tailored Community Benefits Plan discussing, among other areas, community and labor engagement; investing in the American workforce; diversity, equity, inclusion, and accessibility; and the Justice40 Initiative. This will enable and advise future activities with the intent of developing community-informed projects to support the cost-effective, efficient, equitable, and environmentally responsible at-scale expansion of CCUS operations to enable industry adoption.

DOE plans to release both funding announcements in late February 2023.

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Aemetis raising project finance for SAF facility

California renewable fuels company Aemetis is in an advanced process to raise approximately $500m in project financing for its Riverbank sustainable aviation fuel facility.

Cupertino, California-based Aemetis is far along in a process to raise roughly $500m for its Riverbank sustainable aviation fuel (SAF) facility – the largest of several capital raises the company is pursuing, CEO Eric McAfee said today.

The financing for the Riverbank facility, which just received final permitting authorizations, is expected to include preferred equity as well as senior secured debt financing, he added.

“We are well into a process of project financing,” McAfee said, a process delayed by the permit hindrances, in what will amount to a package in the “half a billion range.”

Shares for publicly-listed Aemetis traded today at $3.26 and a $129m market cap.

For the Riverbank project, Aemetis has already signed a deal for 20-year senior debt financing under the USDA Biorefinery Assistance Program, he said.

“But we have multiple opportunities in senior secured debt and we’ve got a very active customer base among airlines, many of whom have already funded into funds that are dedicated to the growth of SAF production,” he said.

He noted that airlines as well as manufacturers of widebody jets have all joined together to provide  mezzanine or equity financing to support SAF. “And we have active discussions with the largest of those investors,” he said.

The company has signed $3.8bn of final binding supply agreements with 10 airlines and a $3.2bn renewable diesel supply contract with the National Travel Stop Company, executives said on the call. In its five-year plan, Aemetis estimates the Riverbank facility will generate revenue of $672m with adjusted EBITDA of $195m in 2027 from the 90 million gallon plant.

Aemetis also expects to close on $75m of financing for biogas projects, and is also also raising a “little bit” of carbon sequestration financing, McAfee said.

The company generated LCFS credits from its biogas operations for the first time in Q124, 

“In addition to the sale of renewable natural gas as a fuel and the sale of federal D3 RINs, this new LCFS credit revenue stream will only increase as we build new digesters and as the California Resources Board approves the lower carbon intensity values that we have already demonstrated in actual operations ,” Andy Foster, president of North America said.

Though there have been delays in updating the California LCFS regulations for 2024, Foster noted that the California Air Resources Board’s model estimates the regulatory changes will raise the price of LCFS credits to more than $220 per credit in the next two years. The price of the credit has recovered from recent lows and is trading around $67 currently.

“There clearly was a realization that the LCFS credit overhang in the market was causing a serious deterioration in the ability for companies like us to make return on investment and further invest in programs, but also to encourage new investment in the entire renewable sector,” Foster said of the rule changes.

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Klean Industries partners with Australian outfit to recover carbon black and biofuel

Vancouver-based Klean plans to complete a detailed feasibility study by the end of December 2022 and finance the project before the end of 1Q23.

Klean Industries Inc, a Vancouver-based waste-to-value technology provider, has partnered with City Circle Group (CCG) to build a fully integrated, continuous tire pyrolysis plant to recover carbon black and biofuel in Melbourne Australia, according to a news release.

Klean and CCG have been working together in the planning of a project in Melbourne for the past twelve months and have been engaged in the final analysis of a Detailed Feasibility Study (DFS) to design and build a fully integrated tire pyrolysis plant. The result thus far has illustrated a significant opportunity and the parties are now in the final phases of contract negotiations with feedstock providers and offtake parties for all the project output products which are being pre-sold.

The parties plan to complete the DFS by the end of December 2022 and anticipate the project being financed before the end of the first quarter of 2023, with construction taking place in 2023 and operations starting in 2024.

Like Klean Industries, CCG is a well-established family-run business. CCG was founded in 1981 and has built a reputation as a leading provider in demolition, decommissioning, remediation, excavation, and recycling in Australia. In doing so, CCG converts all the waste into new building materials and commodities for reuse.

Both CCG and Klean see the prospects of this project playing a significant role in creating a circular economy within the region as it addresses several key issues designated under the United Nations Sustainable Development Goals and will create economic opportunities and environmental benefits for the local economy in Melbourne.

Klean recently agreed to partnerships with several German companies to distribute and build green hydrogen projects around the world.

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Denbury to transport CO2 for Louisiana blue methanol project

A subsidiary of Denbury Inc. will transport and store CO2 for a planned blue methanol plant in Lake Charles, Louisiana.

Denbury Carbon Solutions has executed a 20-year definitive agreement to provide CO2 transportation and storage services to Lake Charles Methanol in association with that company’s planned 3.6 MMPTA blue methanol project, according to a press release.

LCM’s facility will be located along the Calcasieu River near Lake Charles, Louisiana, approximately 10 miles from Denbury’s Green Pipeline.

The facility is designed to utilize Topsoe’s SynCORTM technology to convert natural gas into hydrogen which will be synthesized into methanol while incorporating carbon capture and sequestration.

The process is anticipated to deliver more than 500 million kilograms of hydrogen per year as a feedstock to produce the 3.6 MMTPA of blue methanol.

LCM is finalizing its major permits to begin construction. The project is expected to reach a Final Investment Decision in 2023 with first production anticipated in 2027.

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Exclusive: California IPP considering hydrogen options for gas generation portfolio

A California-based IPP is considering burning hydrogen in the thermal plants it acquires, as well as in a portfolio of gas peaking assets it is developing in Texas and the western US.

Nightpeak Energy, the Oakland-based IPP backed by Energy Spectrum Capital, is planning to have wide optionality to burn hydrogen in the gas plants it acquires, as well as in quick-start peaking natural gas assets it is developing in Texas and the western US, CEO Paris Hays said in an interview.

“There’s just not a lot of places in this country where you can procure enough hydrogen at a reasonable price to actually serve wholesale electricity customers,” Hays said of the existing hydrogen landscape.

Still, OEMs are figuring out in real time which of their deployed fleet can burn hydrogen, he said. Studies on blending seem to be yielding positive results.

“That’s great news for a business like ours, because we can have optionality,” Hays said. When interacting with equipment providers, conversion to hydrogen is an important, if expensive, discussion point.

“We want to be in a position to be able to do that for our customers,” Hays said. “We can offer a premium product, which is kind of rare in our business.”

Nightpeak recently purchased Saguaro Power Co., which owns a 90 MW combined cycle power plant in Nevada. That facility is a candidate for hydrogen repowering, Hays said, though that’s just one option for an asset that is currently cash-flowing well.

The Nevada facility is close to California, which notably is a market with a demonstrated appetite for paying green premiums, Hays said.

“We wouldn’t manufacture hydrogen ourselves, we would be a buyer,” he said. “This is one path that any plants we own or develop could take in the future.”

Nightpeak has yet to announce any greenfield projects. But Hays said the company is developing a portfolio of “quick-start” natural gas generation projects in ERCOT and WECC. Those assets, 100 MW or more, are to be developed with the concept of hydrogen conversion or blending in mind.

Proposition 7, which recently passed in Texas, could present an opportunity for Nightpeak as the legislation’s significant provisions for natural gas development has pundits and some lawmakers calling for the assets to be hydrogen-ready.

Investor interest in being able to convert gas assets to burn hydrogen reflect an important decision-making process for Nightpeak, Hays said.

“Does it makes sense to just buy a turbine that only burns natural gas and may be a stranded asset at some point, or would we rather pay and select a turbine that already has the optionality?” Hays said. “Putting price aside, you’re always going to go for optionality.”

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Exclusive: Australian fuels producer looking for US development partners

An Australian fuels producer and concentrated solar power developer partnered with German and US fossil interests is developing its first US clean fuels project in Texas, and is looking for development partners with eyes on the greater southwest.

Vast Energy, the Australia-based and NASDAQ-listed concentrated solar power (CSP) developer and fuels producer, is in the early stages of developing a project near El Paso, Texas – the company’s first in the US – and is seeking US development partners to generate a pipeline of projects throughout the country, CEO Craig Wood said in an interview.

Vast is in process with two projects in Port Augusta, South Australia: VS1, a 30 MW solar/8 MWh storage plant, and SM1, a demonstration solar-to-methanol plant co-located with VS1, producing up to 7,500 mtpa of green methanol from VS1 electricity and heat with extra power available on the grid.

VS1 is scheduled for FID in 3Q24 with FID on SM1 coming the following quarter, Wood said.

Vast recently announced funding agreements with German partner Mabanaft for up to AUD $40m for SM1, after the SM1 project was selected last year as a part of the German-Australian Hydrogen Innovation and Technology Incubator (HyGATE).

Methanol from the $80m SM1 will in part be exported to Germany. Vast is also working with EDF to provide additional financing, Wood said.

“Essentially it’s going to be debt free and on balance sheet,” Wood said.

German container shipping company Hapag-Lloyd recently signed an MOU with Mabanaft to explore options for the supply of ammonia as bunker fuel to Hapag-Lloyd in the Port of Houston.

US opportunity

In the US, where Vast listed to be primed for opportunistic growth, the company has a shortlist of locations around El Paso, has engaged with regional economic development leaders, and held early talks with EPC providers, Wood said.

The El Paso project is being developed in conjunction with Houston-based oil and gas drilling business Nabors Industries, Wood said. Nabors backed the SPAC that took Vast public at a valuation of up to $586m in early 2023. Its current market cap is $64m.

There are ongoing discussions on whether to produce eSAF or methanol in El Paso, Wood said.

To produce eSAF, Vast would use a solid-oxide electrolyzer coupled with the Fischer-Tropsch process, Wood said. Meanwhile, the methanol distillation process lends itself well to Vast’s ability to produce low-cost heat.

CSP has a lower level of embedded carbon than any renewables technology other than wind, Wood said.

“The work that we have done to date indicated that you would most likely power an eFuels project with a CSP plant that was configured to operate in the day and night,” Wood said.

As for project costs, envisioning a project producing some 200 million liters per annum, roughly $3bn would be needed for the power station, and then half that for the infrastructure to make the fuels.

Preliminary offtake for the El Paso project is going to be critical for attracting investment, Wood said. Offtake will depend on the type of fuel produced, though conversations are ongoing with shipping companies (methanol) and airlines (eSAF).

“We’re not expecting to have any problem placing the product,” Wood said. Offtake would likely be targeted for the Port of Los Angeles, LAX airport, the ports of the Gulf Coast, or Dallas Fort Worth International Airport.

Development of CSP makes sense anywhere climate is sunny and hot, Wood said. The company could logically expand into more of West Texas, New Mexico, Arizona and southern California.

The region around Farmington, New Mexico is particularly attractive for CSP development, Wood said. As a huge amount of coal-fired capacity in that area is retired, those interconnections, workforces and resources are ripe for repowering.

The turbines that one of those coal fired power stations would have is the same turbine at the core of Vast’s technology, Wood said. One difference is that Vast’s can be turned on and off quickly.

Development partnerships 

There is an opportunity for Vast to find a development partner, or partners, to stand up a pipeline of projects in two to three years’ time, Wood said.

“Almost everyone wants to wait until our project in Port Augusta reaches COD,” Wood said. “But we don’t want to wait that long to be developing projects in the US.”

Vast is capable of building CSP plants, which can be configured to operate in the day and night, co-located with existing larger-scale solar pv to provide additional generation and, critically, storage, Wood said. By directing sunlight to receivers and heating molten salt, CSP can store energy for 12-to-20 hours overnight to alleviate solar pv’s intermittency issues.

“Coming along and essentially retrofitting complementary CSP next to those [pv plants], we think is a very sensible way to go, both in terms of shared cost but also in terms of managing incremental transmission build,” Wood said. “We’re looking for people we can have conversations with.”

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