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Iowa RNG facility starts operations

The Marshall Ridge Dairy project in Marshall County, Iowa is expected to produce 1.7 million gallons of low carbon-intensity RNG annually.

Clean Energy Fuels Corp. has completed its latest renewable natural gas (RNG) facility in Marshall County, Iowa. The Marshall Ridge Dairy project is expected to produce 1.7 million gallons of low carbon-intensity RNG annually.

The three-digester facility located in State Center, Iowa, is now producing pipeline quality RNG and injecting it into the national grid, according to a news release. RNG is a sustainable fuel derived from organic waste that provides an immediate and significant carbon reduction in transportation.

Financed through one of Clean Energy’s production joint ventures and developed by Dynamic Renewables, the project totaled $42 million. Methane from the approximately 240,000 gallons of manure produced by the 8,000-cow herd each day will be converted into biogas and ready-to-use clean fuel for heavy-duty fleets across the country. Clean Energy is in process of filing the necessary applications to generate federal and state environmental credits.

“We value working with forward thinking farmers, helping them create a new revenue stream from what would have been considered waste. RNG is an immediate, smart way to address harmful fugitive emissions, and the RNG produced at Marshall Ridge will directly help to cleanly fuel and decarbonize commercial transport,” said Clay Corbus senior vice president for renewables at Clean Energy.

“We have been in the business of milking cows for over 60 years, and that’s what our core business will always be. Adding an RNG facility to our farm will enable us to manage our manure much better while generating an additional revenue stream for our bottom line,” Kevin Blood, Marshall Ridge Dairy.

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Evercore managing director moves to NextEra

A well-known Evercore managing director has made a career move into hydrogen, taking an executive director position at NextEra.

Sean Morgan, a former public equity market analyst at Evercore who made television appearances on CNBC, has taken a new position within the hydrogen business at NextEra Energy Resources.

Morgan, who as an analyst covered the LNG and clean energy markets, took a role as executive director of hydrogen market analytics at NextEra in August, according to his LinkedIn profile. He ended at Evercore as a managing director.

Prior to joining Evercore, Morgan worked as a portfolio manager at Blue Shores Capital, and also worked on the leveraged credit team at SocGen.

NextEra is evaluating a potential $20bn pipeline of hydrogen projects.

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Australian electrolyzer firm raises $111m

bp Ventures and Templewater each invested $10m to co-lead the $111.3m Series B round.

bp Ventures and Templewater led the recent $111.3 million investment round into Hysata, an Australian electrolyzer company, according to a news release.

The Series B capital raise had backing from existing strategic and financial investors IP Group Australia, Kiko Ventures (IP Group plc’s cleantech platform), Virescent Ventures on behalf of Clean Energy Finance Corporation, Hostplus, Vestas Ventures and BlueScopeX.

The company also welcomed new major strategic and financial investors POSCO Holdings, POSCO E&C, IMM Investment Hong Kong, Shinhan Financial Group, Twin Towers Ventures, Oman Investment Authority’s VC arm IDO and TelstraSuper.

Hysata will use the funding to expand production capacity at its iconic beachside manufacturing facility in Wollongong, New South Wales and further develop its technology as it focuses on reaching gigawatt scale manufacturing.

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Glenfarne’s Texas LNG moving to project finance execution phase

Glenfarne has appointed lawyers and is moving into the execution phase for financing its Texas LNG project.

Texas LNG, a four million tonnes per annum liquefied natural gas export terminal to be constructed in the Port of Brownsville, and a subsidiary of Glenfarne Energy Transition, LLC, a global energy transition leader providing critical solutions to lower the world’s carbon footprint, has received sufficient expressions of interest from leading project finance banks to move to the execution phase of project financing.

Glenfarne has also appointed Latham & Watkins as Borrower’s counsel and Milbank as Lenders’ counsel for the issuance.

These lenders have been key supporters of Glenfarne, having led over $4 billion of financing to Glenfarne’s businesses over the last 10 years, supporting the acquisition and/or construction of various energy transition focused assets, the company said in a news release. Furthermore, these banks are active in LNG, having participated in approximately $44 billion of project finance debt to the U.S. LNG sector alone over the last 24 months.

“Texas LNG’s financing consortium will be comprised of the world’s leading institutions that recognize the attributes of the project and Glenfarne’s excellent history of building energy transition infrastructure,” said Brendan Duval, CEO and Founder of Glenfarne Energy Transition.

ReSource recently interviewed Glenfarne Senior Vice President Adam Prestidge about Texas LNG as well as the company’s hydrogen plans.

Today’s news follows Texas LNG’s recent announcement that it signed a Heads of Agreement with EQT Corporation for natural gas liquefaction services for 0.5 MTPA of LNG. Texas LNG also recently announced partnerships with Baker Hughes and ABB to help develop the terminal, representing more than half a billion dollars’ worth of equipment selections for Texas LNG to date.

The first LNG exports from Texas LNG are expected to be shipped in 2028.

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Brookfield-owned renewables developer planning hydrogen co-location

An IPP and developer of wind, solar and storage projects is in early discussions with potential partners to co-locate electrolysis with its operating assets and projects in development.

Scout Clean Energy, the Boulder, Colorado-based IPP and renewables developer, is laying the groundwork to co-locate electrolysis for green hydrogen with its wind and solar assets, CEO Michael Rucker said in an interview.

The company’s Power2X team is charged with looking for alternative strategies, Rucker said.

“We are actively trying to match project opportunities with the future hydrogen economy,” he said, noting that the company’s operating wind portfolio provides a crucial piece of that. “Wind is an especially good fit for hydrogen production just in terms of pricing.”

Scout, which is owned by Brookfield Renewable, sees itself as producing green electrons and doesn’t want to get into marketing and distribution of hydrogen, Rucker said.

Brookfield acquired Scout in 2022 for $1bn, with the potential to invest an additional $350m to support development activities.

Scout has its first solar project in development in ERCOT, a market where shipping of hydrogen would make for a promising project, Rucker said. The company has also looked at the Midwest, where a robust SAF production ecosystem is forming, as well as the Pacific Northwest.

The company is already working with one hydrogen developer to match production to one of its wind farms, Rucker said. An exact location has not been selected.

Pricing diligence has been promising, Rucker said. But the offtake market in the US remains slow to develop despite regulatory encouragement.

“The IRA has given us maybe the most subsidized hydrogen production market in the world but it’s really being production-driven not demand-driven, so we really need to see more of the economy using hydrogen,” Rucker said. “I trust that will come, it’s just going to take longer than we think.”

Scout is not ready to take anything to market related to hydrogen, but ultimately there will be a need for financial advisory, Rucker said.
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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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Carbon capture OEM eyeing US for manufacturing plant

A Vancouver-based maker of carbon capture equipment is considering building a manufacturing plant in the US. Its number one target market: gray hydrogen producers.

Svante, a carbon capture original equipment manufacturer based in Vancouver, is eyeing the US as it seeks to expand its market presence across North America.

The company has raised sufficient capital to construct its first plant in Vancouver, where it will make specialized filters and contactor machines used in the carbon capture and removal processes, Svante CEO Claude Letourneau said in an interview.

Within several years, Svante is planning to build a second manufacturing facility in the United States, closer to where its customers are located and where CO2 can be monetized, Letourneau said.

Svante raised $318m last year in a series E fundraising round led by Chevron New Energies. It will spend approximately $100m to build the Vancouver facility.

Letourneau says the company’s principal target market in North America is existing gray hydrogen facilities that use steam methane reforming, of which there are around 1,000. The cost of adding carbon capture to existing SMR plants brings the cost of blue hydrogen from $1.50 per kilogram to around $2 per kilogram, according to Letourneau, compared to green hydrogen that will cost between $3 – $6 per kilogram with a similar carbon footprint.

“It’s a good solution,” he said.

Optimizing costs

As an original equipment manufacturer, Svante has partnerships with some of the largest EPC companies in the world for carbon capture projects: Kiewit in North America, Technip in Europe, and Samsung in Asia.

“When you have a technology that you want to take to market, you need to get the benefit of a close relationship with these EPC contractors if you want to deploy quickly and reduce costs,” he said.

He noted that the filters and contactors typically make up between 10% – 15% of the cost of a carbon capture plant, while the rest is in the balance of plant. Filters typically have a lifespan of three to five years, he said, allowing for additional recurring revenues for Svante after the initial installation.

Svante is working on five to six projects with Kiewit in North America that are in the pre-FEED and FEED stages, with FIDs expected by the end of next year. It is also working with Linde on a Department of Energy-sponsored pre-FEED carbon capture project for Linde’s Port Arthur gray hydrogen facility.

Additionally, Svante has a partnership with Swiss-based Climeworks for direct air carbon capture technologies.

“We want to be for carbon capture what GE Aerospace is for the jet engine industry,” he said, using an analogy to a market in which there are only several OEMs in a large, consolidated industry.

Target market

There are around 10,000 emitting plants globally that need carbon capture in order to decarbonize; meanwhile there are only 40 carbon capture facilities in operation, according to Letourneau. Svante’s Vancouver plant will be able to make equipment for around 10 plants per year, but eventually the company would like to scale up to between 50 – 100 plants per year with additional manufacturing capacity.

“This is a big problem we’re trying to solve here,” he said.

To build the second plant in the US, the company will explore using project finance debt and seek to take advantage of US government incentives for clean energy manufacturing. The recently enhanced carbon capture tax incentives – of $85 per ton of CO2 captured versus $50 previously – will also benefit Svante’s carbon-emitting customers.

In addition to gray hydrogen, the company is targeting carbon emissions from oil and gas refining as well as pulp and paper mills.

Use cases

Svante’s modular solid sorbent technology can be inserted to capture flue gas at the end of the refining process instead of inside the plant, offering fewer disruptions to existing systems. Svante then concentrates the CO2 into a pipeline grade for storage or industrial use.

“Nobody makes these filters in the world,” Letourneau continued, “so if I want to convince somebody to give Kiewit and ourselves a purchase order for $300m to build a 1 million-ton-per-year plant, they need to see that we have a manufacturing plant to make the filters, they need to see that we have the size of the contactor done at commercial size, and they need to see that we’ve done all the engineering studies to justify that this project can be monetized, economical, and the like.”

The company is sufficiently capitalized to advance the projects in its pipeline, and is focused on completing the Vancouver plant and garnering purchase orders in order to become profitable. A potential future exit could come in the form of an IPO or sale to a larger player, Letourneau said.

“We understand the market is quite buoyant and probably a few large companies are going to try to dominate, and they may decide they want to acquire a company like us, so an M&A is a possible exit in the next five years, depending on the conditions,” he said.

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