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Iberdrola and Masdar partner for €15bn offshore wind and green hydrogen venture

Iberdrola and Masdar have joined forces in a €15bn deal to develop offshore wind and green hydrogen projects in Germany, the UK, and the US.

Iberdrola and Masdar announced a €15bn strategic partnership agreement to evaluate the joint development of offshore wind and green hydrogen projects in key markets including Germany, UK and the USA, according to a news release.

After the parties’ successful co-investment in Baltic Eagle, in Germany, the goal of the alliance will be to achieve a further co-investment in relation to the 1,400 MW UK East Anglia 3 offshore wind project. This deal has been under negotiation for the last few months and could be signed by the end of Q1 2024. Masdar’s stake in this wind farm could be 49%.

East Anglia 3 is currently in construction, with full commissioning scheduled for Q4 2026. The windfarm secured a 15-year CPI-linked Contract for Difference (CfD) from the UK Government in July 2022. The project will power over 1.3 million British homes and create 2,300 jobs.

Beyond the East Anglia 3 transaction, both companies will work together to jointly invest in future offshore wind and green hydrogen projects in Europe and other markets . Work to identify other opportunities is already underway, and it is anticipated that the total value of joint investments in offshore wind and green hydrogen as part of the alliance could reach €15bn. The plans, announced at the UN’s climate change conference COP28 in the UAE, demonstrate both companies’ firm commitment to accelerating the global energy transition, the release says.

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Toyota powering California port facility with fuel cell technology

Toyota and FuelCell Energy have completed installation of a fuel cell system at the Long Beach vehicle processing center.

FuelCell Energy, Inc. and Toyota Motor North America, Inc. (Toyota) have announced the completion of the first-of-its-kind “Tri-gen system” at Toyota’s Port of Long Beach operations, according to a news release.

The Tri-gen system, owned and operated by FuelCell Energy, produces renewable electricity, renewable hydrogen, and water from directed biogas. FuelCell Energy has contracted with Toyota to supply the products of Tri-gen under a 20-year purchase agreement.

Tri-gen is an example of FuelCell Energy’s ability to scale hydrogen-powered fuel cell technology, an increasingly important energy solution in the global effort to reduce carbon emissions. Tri-gen will enable Toyota Logistic Services (TLS) Long Beach to be the company’s first port vehicle processing facility in the world powered by onsite-generated, 100 percent renewable energy and represents the types of innovative and bold investments the company is making as part of its environmental sustainability strategy.

“By utilizing only renewable hydrogen and electricity production, TLS Long Beach will blaze a trail for our company,” said Chris Reynolds, Chief Administrative Officer, Toyota. “Working with FuelCell Energy, together we now have a world-class facility that will help Toyota achieve its carbon reduction efforts, and the great news is this real-world example can be duplicated in many parts of the globe.”

FuelCell Energy CEO Jason Few said, “FuelCell Energy is committed to helping our customers surpass their clean energy objectives. By working with FuelCell Energy, Toyota is making a powerful statement that hydrogen-based energy is good for business, local communities, and the environment. We are extremely pleased to showcase the versatility and sophistication of our fuel cell technology and to play a role in supporting Toyota’s environmental commitments.”

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Raven SR and H3 Dynamics sign MoU for waste-to-hydrogen supply at airports

The companies will jointly develop renewable hydrogen facilities to supply fuel for various ground operations at airports.

Raven SR Inc., a renewable fuels company, and H3 Dynamics, a developer of hydrogen aviation technologies, today announced their memorandum of understanding to globally collaborate on waste-to-hydrogen energy systems to support the decarbonization of airport operations and the adoption of hydrogen at airports.

H3 Dynamics will provide hydrogen power systems to replace conventional fuel and other energy sources at airports, especially in Asia, Europe and the US. Raven SR will provide renewable hydrogen production facilities to supply airports. The use of hydrogen to power various ground operations will help reduce emissions at airports.

“We see tremendous demand to decarbonize the aviation sector with renewable fuels, including on the ground,” said Matt Murdock, CEO of Raven SR. “By collaborating with H3 Dynamics, we can reach a broader network among airports and equipment, including a variety of aircraft operations, to install waste-to-energy hubs where there is an acute need to curb emissions.”

The Raven SR technology is a non-combustion thermal, chemical reductive process that converts organic waste and landfill gas to hydrogen and Fischer-Tropsch synthetic fuels. Unlike other hydrogen production technologies such as electrolysis, Raven SR’s Steam/CO2 reformation does not require fresh water as a feedstock. The process is more efficient than conventional hydrogen production and can deliver fuel with low to negative carbon intensity. Additionally, Raven SR’s goal is to generate as much of its own power onsite as possible to reduce reliance on the power grid and even be independent of the grid. Its modular design provides a scalable means to locally produce renewable hydrogen and synthetic liquid fuels from local waste.

“Raven SR provides a way to convert a variety of waste feedstocks into clean hydrogen, with a process that uses less energy than other renewable hydrogen production. Raven SR’s advanced waste-to-hydrogen technology offers a less intensive, more sustainable means of locally producing fuel,” said Taras Wankewycz, CEO of H3 Dynamics.

H3 Dynamics will work with its technology and manufacturing partners to configure hydrogen power systems componentry to meet certification requirements within the airport and aircraft environment.

“H3 Dynamics will deploy decarbonization use cases that have a more immediate impact, so that the infrastructure built today can also welcome hydrogen aircraft in the future,” said Wankewycz.

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LSB Industries pushing blue over green

LSB executives said they have paused a green ammonia project due to expected capital costs and a lack of clarity on tax credit incentives. But they detailed plans for a blue ammonia facility, including spending some $150m of cash over three years to fund their equity portion of the project, which was recently proposed for the Houston Ship Channel.

US ammonia producer LSB Industries sees market forces working in favor of blue ammonia projects versus green ammonia, and is prioritizing its blue projects while pausing a green ammonia facility planned for Pryor, Oklahoma.

Executives yesterday pointed to lower natural gas prices and an uptick in power prices along with missing guidance from the US Treasury for green molecules as the reason for pausing the green ammonia project.

Oklahoma-based LSB will use a project financing structure to fund its proposed blue ammonia plant in the Houston Ship Channel and likely find initial offtakers among Japanese and Korean power companies, CEO Mark Behrman said.

The facility, which would produce approximately 1.1 million metric tons of ammonia and capture and sequester 1.6 million metric tons of CO2 annually, is currently in the pre-FEED phase and planned for construction on the Vopak Moda Houston Ship Shuttle Ammonia Terminal.

“We selected the supplier of the technology license basic, engineering design, proprietary equipment, and catalyst, and we are in negotiations to finalize the related agreements,” Behrman said in prepared remarks. “In addition to engineering and design activities, we are working to secure offtake customers for the anticipated ammonia production. We expect initial offtakers to be Japanese and South Korean power companies.”

LSB is developing the facility in partnership with INPEX, Japan’s largest E&P company, and plans to build and operate an ammonia synthesis loop using low-carbon hydrogen produced by Air Liquide, who will also handle the carbon capture and sequestration as well as the nitrogen supply.

Based on LSB’s feasibility study, the cost of the project would come in between $500m and $750m, Behrman said, which could conservatively be financed with 60% debt, and, when taking the $750m figure, would amount to $450m of debt and $300m of equity to fund the facility.

“And for simplicity purposes, we haven’t worked out the ownership structure quite yet,” Behrman said, “but assuming that LSB and INPEX [have] 50/50 ownership of the loop that would be $150m of cash from LSB over a three-year period.”

The pre-FEED phase will last until 2Q24 followed by a one-year FEED period that would finish in 2Q25, he said.

“Within the time of us executing on a FEED study, we would expect that we would have negotiated take-or-pay contracts with the federal government, Japanese and Korean and potentially European and U.S. off-takers for the ammonia that we would produce,” Behrman said. “At the end of FEED, we would have to make a decision on whether we’re moving forward, so FID, and we would not move forward without take-or-pay contracts.”

Green ammonia pause

Meanwhile LSB has paused its green ammonia project, “given the uncertainty around the 45 tax credits, combined with the project’s current capital costs,” Behrman said.

He added: “We remain excited about this project and our opportunity to be an early entrant into the production of green ammonia and we continue to have discussions with potential offtakers for green ammonia supply, but we need clarity and finalization of the 45V tax credits before we can make a decision to move forward.”

Natural gas prices have decreased in the US while electricity prices have increased, working in favor of natural gas products.

“That then is a considerable headwind for the build-out of industry based on sourcing power from the grid, which includes green ammonia production,” he said.

“This development is also why we believe the path to blue ammonia is much easier than the path of green ammonia today, especially considering the lack of a green premium favoring production economics,” the executive said. “Therefore, our current focus is on making sure we execute effectively on our El Dorado blue ammonia project and our Houston Ship Channel blue ammonia project as they both set us up well for the future.”

At El Dorado, LSB is in discussions with the EPA for a Class V carbon capture and sequestration permit, and expects to commence production at the plant in 2H25.

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Solar-powered hydrogen producer raising capital for EU and US growth

A European JV developing off-grid hydrogen production units using concentrated solar power – “white hydrogen” – plans to raise capital for growth in Europe and the US.

hysun, a Spanish JV between European firms Nanogap and Tewer Engineering, will raise $15m over three years for its first industrial plant and commercialization by 2026, CEO and Co-founder Tatiana Lopez said in an interview.

hysun has not engaged a financial advisor to date, but is open to meetings, Lopez said.

The new venture, formed in November, has raised $2m and is actively seeking another $3m (pre-money valuation of $10m) equity for a100 g H2/h prototype to close by the end of the year.

The company will then need $4m for an industrial plant, locations for which are being scouted now in the US and Europe. After that, the founders intend to enter a commercialization phase.

hysun’s intellectual property allows it to produce off-grid “white hydrogen” via steam generated with concentrated solar technology, Lopez said. The lack of electrolyzers means about eight times less land is needed to generate projects as large as 200 MW assuming 2,500 hours of sunlight per year.

“You don’t need to be next to a wind farm or solar plant,” Lopez said, adding that the hydrogen is produced at $1 per kilo.

Average project sizes range between 50 and 100 tonnes per year, assuming the same amount of sunlight, though the technology is applicable on a micro scale. The company sees the end uses being for ammonia production, replacement of grey hydrogen in industry and remote location deployment.

Lopez said the company is interested in growing in the US and Europe but believes the US will develop its industry faster.

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Exclusive: Hydrocarbon recycling firm raising pre-IPO equity

An early-stage company capturing and recycling CO2 from hydrocarbon engines in the northeastern US and Germany has hired an investment bank to help them with a public listing and is raising pre-IPO platform equity.

ESG Clean Energy, a Massachusetts-based carbon capture and recycling firm formed in 2016, plans to go public in 2025 but will first raise pre-IPO platform equity, CEO Nick Scuderi said in an interview.

ESG Clean Energy will change its name in a re-brand and has hired an investment bank to help with the IPO, which does not yet have a targeted quarter, Scuderi said. He declined to name the advisor.

After the name change but prior to the public listing, ESG is seeking to raise between $20m and $40m in platform equity, he said. The company is interested in a traditional IPO, not a SPAC or private debut opportunity.

Angel investors have backed the company to date, with some $40m total raised, Scuderi said. He owns a controlling stake in the company.

Power, water and CO2

ESG Clean Energy, billed as a thermal dynamics and fluid mechanics engineering company, has patented technology for use in fossil combustion engines – both piston-driven engines and bottoming cycles (secondary thermal dynamic waste-to-energy systems). Exhaust is treated to produce CO2 and water.

The technology is commercialized, producing power at a facility in Holyoke, Massachusetts under a 5 MW/20-year PPA with Holyoke Gas & Electric. The 5,000 square-foot plant in the city proper has two Caterpillar G3520 natural gas engines each producing 2 MW of power running on natural gas during peak hours.

The waste-heat from Holyoke One is used to create commodities, including distilled water.

“What we have is a design, a system, where we utilize our technology to separate the water from the exhaust,” Scuderi said. “We can utilize this technology in any power plant in the US that’s running on natural gas.”

In arid regions, the distilled water aspect has obvious potential. The Holyoke One facility makes up to 14,000 gallons of distilled water per day, Scuderi said.

The system is also applicable in ICE engines, Suderi said. The company has been in discussions with auto manufacturers to license ESG’s IP; he declined to name which auto companies.

The CO2 is sold to offtakers who do not re-emit it into the atmosphere, such as cannabis growers and CO2 beverage makers. ESG is also able to sell carbon credits.

Bankable opportunities in the US and Germany

Holyoke One, at a cost of $20m, can be replicated throughout the US and, post-IPO, ESG has eyes on power projects in New England, California and Florida, Scuderi said.

Power plants that produce from 100 MWh to 200 MWh will cost between $400m and $450m, and each of those projects will be set up as a separate LLC, Scuderi said. The demand is particularly large in powering data storage.

“We have different [investment] funds that are very large that are willing to put up the money” to fund the projects, Scuderi said. “It’s bankable because the power sales agreement is tied to a data storage company that’s triple-A rated.”

Data-heavy geographies like Virginia are targets for this kind of development, and ESG plans to sharpen its focus on these projects, as well as project finance efforts, following the IPO.

Now, the company has six large scale projects in development in Germany, including one advanced project serving a cloud computing offtaker in the Berlin area, needing 150 MW to 200 MW of power per hour, Scuderi said.

“In Germany, we’re very far along with getting power sales agreements,” he said. “Once we deploy this technology in one location, the world’s going to want it.”

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US salt cavern developer selling hydrogen storage project

A US-based developer of salt cavern projects for hydrogen storage has retained a financial advisor to sell its first project and is informally seeking an equity investor.

Phoenix Hydrogen, a salt cavern storage developer based in Berkeley, California, has hired a financial advisor to run a sale of its primary project in Arizona, according to two sources familiar with the matter.

Scotiabank is leading the process, which will launch next week, the sources said. The sale is for 100% of the company’s first project near Kingman, Arizona. The project is expected to reach FID in the next 18 months.

Phoenix CEO Shawn Drost said in an interview that the company is informally seeking a platform equity investment as well but is only willing to take on a minority partner. An equity sale would need to raise an amount in the “low-tens” of millions, he said. It’s a difficult proposition, as equity providers in the space tend to demand majority positions.

The company wants to bankroll projects from beginning to end as an owner operator, he said, but requires capital to do so.

Phoenix, a six-person team, has a relationship with GHD Group for EPC, he said. The company is seeking relationships with production-side developers to sign site and storage leases.

Scotiabank did not respond to requests for comment.

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