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JERA launches in-house venture capital effort

JERA will make strategic start-up investments in the energy transformation, including in hydrogen and ammonia value chains.

JERA Co., Inc. has initiated corporate venture capital activities with the aim of accelerating innovation in the energy domain and generating new business opportunities, according to a news release.

Led by JERA Ventures, a newly established in-house organization, this initiative will make strategic investments totaling $300m in start-up companies that have leading-edge technologies or business concepts and in venture capital funds that have close connections to such companies.

JERA Ventures, as “a sandbox for people who are serious about changing the world,” aims to be a good partner for start-up companies that are taking on the challenge of changing the world in the energy domain, acting as a bridge between them and JERA, the release states.

We will contribute to accelerated technological development, preconditioned on safety and regulatory compliance, not only through capital participation but also by providing the value of our strengths as one of the world’s largest energy companies, such as our facilities and our LNG, hydrogen, and ammonia value chains, for proof-of-concept1, demo or testing projects using actual assets or facilities. The following are the three main strategic technology areas for investment:

1. Energy transformation: Decarbonization technologies including making existing energy business smart, developing hydrogen and ammonia value chains, and renewables
2. Customer-centric: Digital technologies that offer new value to customers using digital energy platforms, AI, blockchains, etc.
3. Corporate: Well-being, femtech, and other technologies that contribute to the virtuous spiral of employee happiness and corporate value creation.

JERA’s mission is “to provide cutting edge solutions to the world’s energy issues.” Overcoming issues such as climate change, resource constraints, and energy security, we will continue to deliver a stable, economically sustainable clean energy. To achieve this, JERA Ventures will, with a strong sense of social responsibility and a belief in the power of imaginative innovation, co-create with visionary start-ups that brings new ideas or perspectives as it takes on the challenge of discovering new solutions that transcend received wisdom.

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Fortescue buys Phoenix hydrogen project for $24m

FFI has invested $24m to acquire the Phoenix Hydrogen Hub from an affiliate of Nikola.

Fortescue Future Industries (FFI) has made its first major move in the United States following the passage of the Inflation Reduction Act, investing $24m to acquire a 100% interest in Phoenix Hydrogen Hub, LLC (PHH), according to a news release.

FFI is acquiring PHH from an affiliate of Nikola Corporation.

PHH is developing a proposed green hydrogen project located near Phoenix, in the city of Buckeye, Arizona. Phase One of the PHH project is planned to be an 80 MW electrolyzer and liquefaction facility, capable of producing up to 12,000 tonnes of liquified green hydrogen annually, which can displace the equivalent of 10 million gallons of diesel consumption per year. The PHH project has further capacity to scale up production to help meet future demand.

FFI CEO Mark Hutchinson said FFI’s investment in the PHH has the potential to create hundreds of jobs. First production of green hydrogen from the PHH project is expected by the middle of this decade.

“FFI is actively expanding its U.S. presence and strengthening its position as a leading global developer of green energy production and technology,” Mr Hutchinson said.

“This investment by FFI will greatly strengthen one of the country’s first and most important hydrogen ecosystems and it is a significant milestone in creating the all-important local connective infrastructure to accelerate the use of green hydrogen,” he added in the news release.

Nikola provides zero-emissions transportation and energy supply and infrastructure solutions.

Nikola, whose trucks are manufactured in Coolidge, Arizona, will be a potential customer of liquified green hydrogen from the hub to support the deployment of its heavy-duty, zero-emission hydrogen fuel cell electric vehicles and hydrogen refuelling stations in California and the U.S. Southwest.

“Nikola’s priority is to see more zero-emission trucks on the road and this investment by FFI will greatly strengthen one of the country’s first and most important hydrogen hubs,” said Nikola Corporation President and CEO, Michael Lohscheller.

The large-scale deployment of hydrogen as a zero-emission fuel into the transportation sector is expected to benefit not only from the hydrogen tax credit in the Inflation Reduction Act, but also state level incentives such as the Low Carbon Fuel Standard in California.

Buckeye Mayor, Eric Osborn said: “Buckeye is committed to attracting clean energy businesses to the city, especially near the Sustainable Valley area. This facility adds to our ‘green’ portfolio making Buckeye the perfect location for similar technologies to expand and grow in our community.”

Sandra Watson, President and CEO of the Arizona Commerce Authority, said: “FFI’s investment further establishes Arizona as a national hydrogen leader. FFI will advance Arizona’s efforts to create a clean hydrogen ecosystem and build upon initiatives among industry and academia, including the Southwest Clean Hydrogen Innovation Network (SHINe), which is focused on developing a Southwest clean hydrogen hub.

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Carbon utilization firm raises $20m Series A

Investors include Korea’s Envisioning Partners as well as United Airlines’ Sustainable Flight Fund and Microsoft’s Climate Innovation Fund.

Dimensional Energy, Inc., a CO2-to-SAF and carbon utilization technology firm has closed a $20m Series A funding round.

In addition, the climate tech company announces their filing of the Delaware Public Benefit Corporation Charter, the first step in becoming a certified B Corporation.

The funding round was led by Envisioning Partners, a prominent Korea-based impact venture capital fund with a strong global focus on climate investing, with strategic participation from United Airlines’ Sustainable Flight Fund, Microsoft’s Climate Innovation Fund, RockCreek Group’s Smart Aviation Futures fund, DSC Investment, Delek US, New York Ventures, Climate Tech Circle, and continuing support from existing investors Elemental Excelerator, Chloe Capital, and Launch New York among others, according to a news release.

The Series A round funding, combined with committed third-party project financing, positions Dimensional Energy for significant growth, enabling the company to rapidly achieve commercial scale and expand its portfolio of high-value, financially attractive projects, according to the company.

ReSource reported in August that the firm was in the late stages of a roughly $100m equity and debt round led internally.

In May, the company signed an offtake agreement for 5 million gallons per year with Boom Supersonic, which is seeking to build a supersonic airliner that will travel at speeds twice as fast as today’s commercial jets.

Dimensional Energy will allocate the newly raised funds to advance its key initiatives:

  1. Construction of the world’s first advanced power-to-liquid (PtL) fuels plant, utilizing emissions from the Lafarge Richmond Cement Plant in British Columbia, Canada, in partnership with Svante, a leader in carbon capture technology.
  2.  The continued development of commercial power-to-liquid plants globally including a project with financing from Seneca Environmental and development support from Elemental Excelerator’s Infrastructure and Community Engagement programs.
  3.  Introduction of Dimensional Energy’s first consumer (B2C) and business-to-business (B2B) products, including fossil-free surf wax and a cruelty-free fat alternative tailored for vegan food manufacturers.
  4. Technology advancements including the evolution of Dimensional Energy’s proprietary reactor and catalyst technologies, which are being developed with funding from the Department of Energy’s ARPA-E and SETO programs, in collaboration with Oak Ridge National Laboratory and Cornell University. These innovations are field-tested at Dimensional Energy’s technology center in Tucson, Arizona.
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BlackRock’s Navigator CO2 pipeline files updated permit application

Facing local opposition, BlackRock’s $3.4bn Navigator CO2 pipeline has filed an updated permit application with the Illinois Commerce Commission.

BlackRock-backed Navigator CO2 Ventures has filed an updated permit application with the Illinois Commerce Commission.

The new proposal reflects an expanded scope of the carbon capture, utilization, and storage project, Heartland Greenway, and includes the addition of 42 miles of proposed pipeline that will connect to additional permanent storage locations in central Illinois.

The Navigator CO2 pipeline has faced pushback from residents and local authorities across its footprint. Proponents previously withdrew an application for eminent domain powers in Illinois after state regulators said the filing was incomplete. The company then announced it would reapply with an expanded route.

The project scope includes 21 carbon dioxide collection points – at midwestern biofuel plants – along with 1,350 miles of new pipeline and four booster stations across Illinois, Iowa, Minnesota, Nebraska, and South Dakota.

Project costs, including capture and sequestration facilities, are projected at approximately $3.4bn.

The proposed pipeline is contracted with industrial producers to capture, transport, and store up to 10 million metric tons of CO2 annually. When fully expanded, the system will be able to transport up to 15 MMT of CO2 annually, according to documentation. Construction of the project is expected to commence in 2Q24 pending receipt of regulatory approvals.

Equity funding for the project is primarily sourced from BlackRock’s Global Energy & Power Infrastructure Fund III, which has committed equity of $5.1bn.

Development capital cost is estimated at $245m, which includes detailed engineering, property survey work, and acquisition of real property interests for the pipeline system and the sequestration facilities to be utilized in the construction phase. The development phase of the project is funded through equity commitments from BlackRock, the Navigator management team, and other investors.

The construction phase of the project will be funded by incremental equity sourced from GEPIF III and other investors, along with a project financing facility sourced by a consortium of lenders. The project has commitments from GEPIF III and other investors for incremental equity required for the construction phase.

On or near the commercial operation date of the project, a long-term debt facility will be put in place to refinance the construction loans, according to the application.

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Low-carbon crude refinery developer lining up project cap stack

The developer of a low-carbon crude refinery is in talks with banks and strategics to line up project financing for a $5.5bn project in Oklahoma.

Texas-based Southern Rock Energy Partners is holding discussions with banks and potential strategic investors with the aim of shaping a $5.5bn capital stack to build a low-carbon crude refinery in Cushing, Oklahoma.

The project, a first-of-its-kind 250,000 barrel-per-day crude refinery, would make it the first crude facility of that size built in the United States in several decades.

The company is evaluating a project finance route with a debt and equity structure for the project, and has held talks with several major investment banks as well as “industry-leading” strategics in midstream, industrial gas, and electricity generation, Southern Rock Managing Partner Steven Ward said in an interview.

In support of the refinery, the city of Cushing and the Cushing Economic Development Foundation approved $75m in tax-exempt private activity bonds, Ward noted. He added that the company could also tap industrial revenue bonds as well as PACE equity financing.

Seed capital for project development has so far come from strategic partners, some of which are operational partners, Ward said. He declined to comment further on the capital raise, noting that engagement letters have yet to be signed.

Engineering firm KBR is conducting a feasibility study for the Cushing project, and the company is moving through land acquisition, air permit preparation, and EPC selection, Ward said.

While most crude refineries consume natural gas, off-gasses, and ambient air, Southern Rock’s proposed refinery would use oxygen along with blue hydrogen produced from the refining off-gasses and green hydrogen from electrolysis. The process would eliminate 95% of greenhouse gas emissions at the proposed refinery.

“Our furnaces and our process heating units are fed 100% hydrogen and oxygen,” Ward said, noting that this type of system does not currently exist in the market. The company is expanding on technology it licenses from Great Southern Flameless, he said.

The size of the refinery would make it the largest to be built in the US since Marathon Petroleum built a 200,000 barrels-per-day facility in 1976.

Certain other low-carbon crude projects have been in the market for several years. Meridian Energy has been seeking to build cleaner crude refineries in North Dakota. Raven Petroleum ran up against environmental concerns while seeking to build a clean refinery in Texas. And MMEX is aiming to build an “ultra clean” crude refinery in West Texas.

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Air Products CEO discusses mega-scale green hydrogen project with AES

Air Products CEO Seifi Ghasemi further discussed its JV with AES Corporation to develop a $4bn green hydrogen project in Texas, noting that roughly half the price tag would come from developing 1.4 GW of renewables to feed the electrolyzers.

Air Products and AES Corporation will form a JV to develop a $4bn integrated green hydrogen facility in Texas, with roughly half of the cost coming from development of 900 MW of wind and 500 MW of solar generation, and the other half for the hydrogen build-out, Air Products CEO Seifi Ghasemi said on an investor call today.

Similar to his company’s JV in Saudi Arabia, the 50/50 JV will develop, build, own and operate a facility in Wilbarger County, at the site of a decommissioned coal-fired plant, Ghasemi said on the call.

Air Products has an exclusive global agreement with thyssenkrupp for electrolyzers, and could include battery storage at the Texas site to help power the electrolyzers, he added.

A separate entity owned 100% by Air Products will be the sole offtaker from the facility, Ghasemi said, which will produce more than 100 mtpd for use in transportation and industrial markets.

The relationship between AES and Air Products is not exclusive, he said.

Air Products expects a minimum internal rate of return of 10%, Ghasemi said. The company is hoping the tax benefits of the project will result in a lower hydrogen price from the JV.

The amount of capital invested by Air Products will be determined by downstream uses, Ghasemi said. The company has yet to decide if it will build a liquefaction plant, transport gaseous hydrogen by pipeline, or convert the hydrogen to ammonia and ship it by rail.

When it was noted that there is not an existing pipeline connecting Wilbarger County to Air Product’s Gulf Coast pipeline, Ghasemi said he was being pressured to get more deeply in the topic than he wanted, but that the company was confident emerging industry in the area would provide the necessary offtake.

“We don’t have to send it all the way down 250 miles to our existing pipeline,” Ghasemi said. “There’s a lot of different options.”

Air Products will not issue new stock to dilute shareholders or jeopardize its A-rating, Ghasemi said.

The labor cost is “very low on these projects,” Ghasemi said. And customers are attracted to getting 30-year contracts not associated with the price of oil, natural gas or geopolitics.

Air Products is investing approximately $500m for a 35 metric ton per day facility to produce green liquid hydrogen at a greenfield site in Massena, New York, as well as liquid hydrogen distribution and dispensing operations.

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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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