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IRENA: Energy transition significantly off track

Despite record investments in renewable energy capacity, the International Renewable Energy Agency projects a giga-scale emissions gap in reaching net-zero targets by 2050.

The International Renewable Energy Agency’s (IRENA) 2023 World Energy Transitions Outlook report highlights the need for comprehensive action to meet the Paris Agreement’s goal of limiting global warming to 1.5°C. 

The report indicates that current energy transition technologies are significantly off track, with an emissions gap of 16 gigatonnes projected for 2050. Meanwhile, according to IRENA’s Planned Energy Scenario, the energy-related emissions gap is projected to reach 34 Gt by 2050.

Despite some progress, such as the addition of 300 GW of renewables in 2022, further acceleration is crucial to meet emission reduction targets, the report says​​.

The report emphasizes that annual renewable power deployment must significantly increase, targeting about 1,000 GW per year to align with the 1.5°C pathway. The global energy mix is expected to shift dramatically, with renewable energy’s share rising from 16% in 2020 to 77% by 2050. This transformation will require a substantial increase in renewable electricity capacity, especially in sectors like transport and buildings. 

Additionally, hydrogen is projected to play a pivotal role, with 94% of hydrogen production expected to be renewables-based by 2050​​ in the 1.5°C scenario. This significant shift towards green hydrogen aligns with the overarching goal of increasing renewable energy’s share of the energy mix.

In terms of investments, the report identifies a considerable gap. To achieve the 1.5°C target by 2050, an estimated cumulative investment of $150 trillion is needed, more than quadrupling the current annual investment levels. While there was a record high of $1.3 trillion in global investments in energy transition technologies in 2022, this is still insufficient compared to the necessary scale of investment. The report also notes that renewable energy investments are concentrated in a few countries and technologies, with significant investment disparities between the Global North and South​​.

Private sector investments, constituting 75% of global investments in renewables from 2013 to 2020, have predominantly focused on less risky technologies and countries. To address these imbalances, stronger public sector intervention and targeted, scaled-up public contributions are necessary to support a wider range of countries and technologies​​.

The report’s outlook stresses the importance of proactive energy transition strategies to promote a resilient, inclusive, and climate-safe system. It calls for a shift away from fossil fuel-dependent structures and systems, emphasizing that the energy transition can be a tool to shape a more equitable world. This transition requires overcoming existing barriers in infrastructure, policy, workforce, and institutions. Immediate action and implementation of available technology options are feasible and economically viable, but comprehensive policies across all sectors are essential to scale up deployment and achieve climate and development objectives​​.

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French H2 carmaker unveils Normandy industrial site

The site will house the first production lines for a high-end hydrogen car, with a capacity of 20,000 vehicles per year, as well as an R&D center.

Hopium, the French manufacturer of high-end hydrogen-powered vehicles founded by professional race care driver Olivier Bomard, has unveiled its industrial site near Vernon, in Normandy.

The choice is part of the company’s ambition to develop its hydrogen-powered sedan models in France. The 85-acre site, located in the area of Douains, will house the first production lines, which will have a capacity of 20,000 vehicles per year, as well as an R&D center.

The infrastructure will be commissioned at the end of 2024, with an inauguration scheduled for early 2025, according to a news release. The Vernon site will eventually employ more than 1,500 people in all its divisions, and thus intends to contribute to the economic dynamism of the region.

“This is a major project that will contribute to France’s industrial renewal. We chose Normandy, a region that we believe has all the assets needed to host the factory of the future, starting with its unique geographic location between Paris and the Channel, reinforced by the Seine Axis, its industrial basin and its rich innovation hub, in which we are now involved in. Hopium, by selecting this site for the location of its cutting-edge infrastructure, is completing another decisive step in its roadmap, which should lead to the launch of the first Hopium Māchina models on the market in late 2025. I would like to thank the local and regional stakeholders as well as all the Hopium teams, who are invested in the implementation of the project,” said Lombard, CEO of Hopium.

“This project is excellent news for Normandy and is further proof of the economic dynamism of our region. It will also contribute to the development of the hydrogen industry in Normandy. Normandy, a leading industrial region, is a pioneer in the development of this promising sector. In order to strengthen the place of hydrogen in the energy transition, Normandy was the first French region to adopt its Hydrogen Plan in 2018. Nearly one-third of the national consumption of hydrogen is in Normandy, particularly in the chemical and petrochemical sectors as well as in the aerospace sector with the presence of the Ariane Group test site. With a network of recharging stations and hydrogen vehicles established throughout the region and the world’s first hydrogen retrofitted coach being tested on an intercity line, the Region is already a leader in hydrogen mobility,” said Hervé Morin, president of the Normandy Region.

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Aemetis approved for $200m USCIS financing

The financing will be made available through the U.S. Citizenship and Immigration Services’ EB-5 program.

Aemetis, Inc., a renewable natural gas and renewable fuels company focused on low and negative carbon intensity products, today announced approval by U.S. Citizenship and Immigration Services (USCIS) of $200 million of EB-5 program investment for the Riverbank sustainable aviation fuel (SAF) production plant, the dairy renewable natural gas (RNG) project, the carbon sequestration project, and energy efficiency upgrades to the Keyes ethanol plant.

The Riverbank plant was recently granted Authority to Construct (ATC) air permits and is designed to produce 78 million gallons per year of SAF for the aviation market. Aemetis has already secured more than $3 billion of contracts to supply airlines with SAF.

“This $200 million of funding provides attractive terms at a low interest rate to fund our projects, including the dairy renewable natural gas project and the sustainable aviation fuel plant to meet rapidly increasing global demand for SAF from airlines,” said Eric McAfee, Chairman and CEO of Aemetis. “This EB-5 funding, the 20-year USDA guaranteed loans, and other financings support the continued growth of the company as set forth in the Aemetis Five Year Plan,” McAfee added.

According to the determinations made by the USCIS, the Regional Center presented evidence asserting that 245 qualified investors will invest $200 million in EB-5 capital into Advanced Bioenergy II, the new commercial enterprise (NCE). The NCE will invest in Aemetis Advanced Products Keyes, the job creating entity (JCE).

The JCE intends to expand the existing 65 million gallon per year Aemetis ethanol plant in Keyes, California by the engineering, permitting, construction and operation of: 1) upgrades to the ethanol plant for improved energy efficiency and increased production, including the installation of solar panels,mechanical vapor recompression, and the use of sugars from waste forest and orchard wood to replace corn sugars for biofuels production; 2) the dairy Renewable Natural Gas (RNG) system that includes dairy digesters, a gas pipeline, a central facility to convert biogas to renewable natural gas, RNG fueling stations, and an interconnection facility to the utility gas pipeline; 3) a biofuels production facility that uses the distillers oil product of the ethanol plant and other renewable oils to produce SAF and RD; and 4) a well that sequesters carbon in the form of CO2 emitted by the production processes and other CO2 emissions collected in the area.

The Project’s two primary locations are the Aemetis Advanced Fuels Keyes 65 million gallon per year ethanol plant and the Riverbank Industrial Complex.  The USCIS found that the Aemetis projects are both located within high unemployment areas.

Eight investors have already invested $500,000 per investor (a total of $4.0 million) and 245 additional future investors have now been approved at $800,000 per investor (for an additional $196.0 million) for a total of $200 million under the EB-5 program.

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AIMCo takes majority control of Howard Energy Partners

AIMCo will now hold a total ownership stake of 87% in HEP, which is developing a blue hydrogen facility at the Port of Corpus Christi.

Alberta Investment Management Corporation has acquired a stake in Howard Energy Partners from Astatine Investment Partners, according to a press release.

AIMCo will now hold a total ownership stake of 87% in HEP, the release states. The company acquired an initial 28% stake in 2017

HEP management and other minority investors will continue to hold a 13% ownership interest in the company.

TPH&Co., the energy business of Perella Weinberg Partners, served as financial advisor and Kirkland & Ellis served as legal advisor to AIMCo on the transaction.

Last year the Port of Corpus Christi Authority and HEP) executed an MOU to convert Howard’s Javelina refinery services facility at the port into a blue hydrogen production facility.

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Gas-fired peaker sale touts hydrogen blend potential

An equity process for 25% ownership of a California peaker plant includes plans to blend up to 30% hydrogen as part of the sales pitch, according to a teaser.

An opportunity to acquire 25% of the Sentinel Energy Center in California includes decarbonization initiatives like blending 30% hydrogen and installation of on-site battery storage, according to two sources familiar with the matter.

Project Oasis is being run by CIBC, the sources said. Voltage Finance, an entity managed by Guggenheim Partners Investment Management, is exploring the sale of its 25% indirect equity interest in the 850 MW generating facility in Riverside County.

The facility has more than 75% of its capacity contracted through 2027, according to a teaser seen by ReSource. The potential to execute a long-term green hydrogen offtake contract on several of Sentinel’s turbines is being evaluated.

“Sentinel is pursuing the implementation of hydrogen blending capabilities and has advanced the engineering and design through an agreement with a global OEM with beta testing expected in Q1 2025,” the document states.

Sentinel is also co-located with 15 MW of battery storage.

Guggenheim and CIBC did not respond to requests for comment.

Diamond Generating holds a 50% stake in Sentinel. The remaining 25% interest is owned by California-based fund manager Climate Adaptive Infrastructure (CAI), which bought its stake from Partners Group last year.

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Cutting the electricity out of electrolysis

Milwaukee-based start-up Advanced Ionics is seeking to commercialize an electrolyzer that cuts electricity needs for hydrogen production to as low as 30 kWh per kilogram.

Advanced Ionics is seeking to ramp manufacturing capacity and raise capital as it begins to commercialize an electrolyzer promising to reduce electricity needs, CEO Chad Mason said in an interview.

The Milwaukee-based company is working to demonstrate its low-cost electrolyzer technology through a partnership with the Repsol Foundation.

The technology will be tested locally, but could grow to include additional tests and, eventually, a commercial relationship with the Spain-based energy and petrochemical company.

Advanced Ionics is looking to move into a larger facility in Milwaukee to advance early-stage production of the electrolyzer, which uses steam from process and waste heat to reduce the amount of electricity required in electrolysis.

The company last year raised $4.2m in a seed round led by Clean Energy Ventures, with participation from SWAN Impact Network. It has also received financial support from Repsol and $500,000 from the DOE.

As it scales, Mason said, the company will also need to raise additional capital, but he declined further comment.

Going to market

The Repsol arrangement is part of the company’s early access program allowing potential end users to take a first look at the technology.

“Repsol is just the tip of the iceberg here,” Mason said. “We’re talking to some really amazing partners at some of the largest energy companies in the world. People who use hydrogen today and want to make it green immediately understand what we’re doing.”

Given the concentration of hydrogen use in petrochemicals and ammonia, Advanced Ionics is targeting these sectors for deployment of its electrolyzers to produce clean hydrogen, Mason added.

Mason noted that, as the traditional petrochemical industry dies off over time, it will be replaced by green materials and green fuels like sustainable aviation fuel and biofuels that require hydrogenation to be useable.

“You’ll see a bit of a replacement happening on the petrochemical side, towards a green chemical,” he said, adding that a third potential key market is green steel production using hydrogen.

Thermodynamically favored

The company’s Symbiotic electrolyzers use steam by tapping into excess heat from industrial settings, thereby lowering electricity needs for water splitting to 35 kWh per kg, with 30 kWh per kg possible. That compares to industry averages over 50 kWh per kg.

Advanced Ionics’ water vapor electrolyzer

“We set out to build an electrolyzer specifically that would operate at intermediate temperatures,” he said. “And that allows you to have the synergy with those processes, and the downstream effect is the most cost-effective hydrogen you can get.”

The resulting hydrogen could be available for less than $1 per kg – but, Mason notes, the underlying power price math assumes an abundance of cheap, clean power. The models are usually pricing in two cents per kWh, the availability of which, Mason added, is “extremely geographically dependent.”

“If you’re in Texas, you have a system with wind, solar, and some amount of clean energy grid back-up, it’s pretty attractive,” he said. “Or if you hook up to a hydroelectric facility in the Northwest or in the Quebec area.”

Mason added, “Electrolysis rides on the coattails of cheap, clean electricity. What we have under our control is to make sure we’re using as little electricity as possible.”

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Canadian renewables major eyeing hydrogen production at pumped hydro facility

Canadian power generation giant TransAlta could co-locate hydrogen production with select wind and hydroelectric facilities.

TransAlta, the Canadian power generator and wholesale marketing company, is contemplating a buildout of hydrogen production capabilities at its 320 MW Tent Mountain pumped hydro storage project in Alberta, Executive Vice President of Alberta Business Blain van Melle said in an interview.

“Our view on hydrogen is that it’s a technology that’s an option, somewhat further out in the future, particularly when it comes to power generation,” van Melle said. “If we can offer our customers maybe a power and hydrogen solution, and they’re using the hydrogen in another process, that would be something we would look at.”

In early 2022 TransAlta made a CAD 2m equity investment in Ekona Power, a methane pyrolysis company based in Vancouver. The company also committed USD $25m over four years to EIP’s Deep Decarbonization Frontier Fund 1.

That latter investment is a way to continue to learn about hydrogen and have exposure to emerging technologies, van Melle said.

The recent 50% stake acquisition in the Tent Mountain project includes the intellectual property associated with a 100 MW offsite green hydrogen electrolyzer and a 100 MW offsite wind development project.

Having hydrogen production co-located with wind and pumped hydro storage could make sense for the company in a few years, van Melle said. FID on Tent Mountain could be reached sometime in 2025 and will require the company to secure a PPA offtake and determine capital cost. Development work will take three to four years and earliest construction could begin in 2026.

The company has not had discussions with potential offtakers, van Melle said, adding that development on the pumped hydro facility needs to mature before a hydrogen component advances.

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