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Mitsubishi Power Americas hires VP of hydrogen infrastructure development

Mitsubishi has hired Kai Guo as vice president of hydrogen infrastructure development in the West region.

Kai Guo has started a new role as vice president of hydrogen infrastructure development in the West region at Mitsubishi Power Americas, according to a post on LinkedIn.

Guo, who did not respond to a request for comment, previously worked for a decade holding multiple positions at Kiewit, ending as senior vice president of engineering and consulting services. Before that he was an associate at State Street.

He is based in Overland Park, Kansas.

Mitsubishi is involved in the development of the Advanced Clean Energy Storage hub in Delta, Utah, which has received a $504.4m loan guarantee from the Department of Energy. The project is designed to convert over 220 MW of renewable energy to 100 metric tonnes per day of green hydrogen. ACES Delta has further plans to deploy hydrogen hubs across the US, according to its website.

Last year the US unit of Mitsubishi Heavy Industries invested in clean hydrogen production startup Electric Hydrogen.

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Texas ethylene-to-alkylate facility comes online

ECP-backed Next Wave Energy Partners brought the facility online in the Houston Ship Channel, and has plans for a second facility that will convert renewable feedstocks into building blocks for plastics and SAF.

Next Wave Energy Partners, LP, a portfolio company of Energy Capital Partners (ECP), today announced that its alkylate production facility, known as Project Traveler and located adjacent to the Houston Ship Channel in Pasadena, Texas, has achieved commercial operations.

“We are extremely pleased that this innovative facility is now producing what we believe to be the world’s highest quality alkylate product,” said Next Wave Executive Chairman Patrick Diamond in a news release. “Although the composition of global energy supplies will evolve over many years, Next Wave is firmly positioned to deliver drop-in solutions that improve energy efficiency and reliability and contribute to the decarbonization of our planet both now and into the future.”

Alkylate is a valuable gasoline blending component that typically comprises 10% to 15% of the overall gasoline pool in the United States. Alkylate is prized for its clean properties – high octane, low vapor pressure and low sulfur content. Next Wave’s alkylate product, marketed under the trade name Optimate, offers qualities superior to traditional refinery alkylate because it can be produced with 96.0 road octane (98.0+ Research Octane Number), a low 3.5 Reid vapor pressure and five parts per million or less of sulfur. Importantly, Optimate, produced without using crude oil, has a lower carbon intensity than traditional refinery alkylate.

“The performance of our Project Traveler facility has exceeded our expectations and there is strong market demand for our lower carbon intensity Optimate product,” said Next Wave President and CEO Michael Bloesch. “The Next Wave platform – anchored by Project Traveler – is well positioned for cost-effective expansions of Optimate production capacity, while also retaining the optionality to vertically integrate into upstream renewable feedstocks and downstream renewable chemical and fuels products.”

In addition to commencing engineering work for debottlenecks of and capacity additions to the Project Traveler facility, Next Wave is also in the development stage for a second project. The project, known as Project Lightning, would leverage the existing assets and enhance the optionality of the Next Wave platform by converting renewable feedstocks into chemical building blocks for use in the manufacturing of a variety of specialty products, from net zero carbon plastics to sustainable aviation fuel (SAF). Specifically, Project Lightning would utilize ethanol as a feedstock and have the capability to produce bio-ethylene, renewable Optimate (alkylate), and sustainable aviation fuel. The inclusion of a metathesis unit in the project would add optionality to convert ethylene and bio-ethylene into propylene and bio-propylene, respectively.

“I would like to thank the entire Next Wave team for their unwavering commitment to developing a world-class facility,” said Pete Labbat, Managing Partner at ECP. “ECP is proud to have partnered with Next Wave, a company that has been at the forefront of the U.S. energy revolution. Next Wave remains committed to producing a product that enhances transportation fuel efficiency and doing so with adherence to safe and reliable operations.”

“Next Wave was an early mover in identifying the secondary and downstream effects of the shale revolution,” added Matt Delaney, Partner at ECP. “By converting natural gas liquids and their derivatives into higher-value, fuel-efficient products, Next Wave has created a win-win scenario for feedstock suppliers and alkylate customers.”

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Hydrogen investors like patents, IEA says

More than half of the USD 10bn of venture capital investment into hydrogen firms in 2011-2020 went to start-ups with patents, according to an IEA study.

More than half of the USD 10bn of venture capital investment into hydrogen firms in 2011-2020 went to start-ups with patents, according to a joint study of patents by the European Patent Office (EPO) and the International Energy Agency (IEA).

Start-ups with patents represented less than a third of companies in the report’s data set, according to a news release summarizing the findings.

The study found that holding a patent is also a good indicator of whether a start-up will keep attracting finance, noting that “more than 80% of late-stage investment in hydrogen start-ups in 2011-2020 went to companies that had already filed a patent application in areas such as electrolysis, fuel cells, or low-emissions methods for producing hydrogen from gas.”

The percentage increases to 95% when funding acquired in the IPO/post-IPO stage is taken into consideration.

Overall, the report found that hydrogen technology development is shifting towards low-emissions solutions such as electrolysis. Global patenting in hydrogen is led by the European Union and Japan, which account for 28% and 24% respectively of all IPFs filed in this period, with significant growth in the past decade. The leading countries in Europe are Germany (11% of the global total), France (6%), and the Netherlands (3%).

The United States, with 20% of all hydrogen-related patents, is the only major innovation center where international hydrogen patent applications declined in the past decade. International patenting activity in hydrogen technologies remained modest in South Korea and China but is on the rise. In addition to these five main innovation centers, other countries generating significant volumes of hydrogen patents include the United Kingdom, Switzerland and Canada.

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Holland & Knight adds partners with hydrogen focus

The firm hired a team of nine energy industry partners from Eversheds.

Holland & Knight has hired a team of nine energy industry partners from Eversheds, according to a press release.

The team is led by energy and renewables partner Ram Sunkara in Houston and tax partner Amish Shah in Washington, D.C.

Sunkara has an industry-recognized multidisciplinary practice advising clients on complex mergers and acquisitions, joint ventures, tax equity transactions, project development and construction matters and structured commodity transactions across the electric energy (with a specific focus on renewables and renewable natural gas), oil and gas, transmission and storage, hydrogen, carbon capture and sequestration, mining and metals, timber, chemicals and natural resource industries.

Shah provides sophisticated and practical tax advice to clients making investments in the energy sector or seeking to achieve ESG goals, including with respect to production tax credits (PTCs) and investment tax credits (ITCs) for renewable power, alternative fuels, carbon capture and sequestration, energy storage, hydrogen, biogas property, nuclear and other technologies incentivized through tax credits (including through the Inflation Reduction Act). He represents energy clients in seeking legislative and regulatory changes; in maximizing the value of tax credits, including through “begun construction” strategies; in project development, mergers and acquisitions, joint ventures and tax equity investments; and in tax controversy at the administrative, trial court and appellate levels.

The group also includes partners Jackson Allen and Kyle Wamstad in Atlanta; Joshua Belcher and Ronnie Dabbasi in Houston; Madeleine Tan in New York; and Alexander Holtan and Susan Lafferty in Washington, D.C. The team’s experience includes corporate transactions, power purchase agreements, project finance and development, equity and debt financing, general tax planning, energy-related tax credits, tax controversy, regulatory and environmental.

The move follows Holland & Knight’s 2021 merger with Thompson & Knight, a Texas-based firm and leader in the energy industry, as well as multiple lateral energy and renewable partner additions over the past several years, the release states. Holland & Knight’s Energy and Natural Resources Group includes more than 220 lawyers in key markets throughout the U.S. and in Mexico and Colombia.

“Since 2018, one important aspect of our business strategy has been to strengthen our energy practice,” said Steven Sonberg, managing partner of Holland & Knight. “The addition of this exceptional team, combined with the strength of the former Thompson & Knight lawyers, our partners in Bogotá and Mexico, as well as other recent partner additions, positions us to provide a full range of services to the international energy industry. Ram, Amish and their team will help us compete for the most sophisticated work across all areas of the industry.”

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Renewable hydrogen developer in exclusivity with strategic investor

A renewable hydrogen developer based in the western US is reaching the final stages of a capital raise with an investor in exclusivity.

NovoHydrogen, the Colorado-based renewable hydrogen developer, is in exclusivity with clean energy investment platform Modern Energy, according to two sources familiar with the matter.

ReSource reported in February that GreenFront Energy Partners was advising the company on a Series A.

NovoHydrogen CEO Matt McMonagle said previously that the company has about 30 projects in development in the US, ranging from a few megawatts to hundreds of megawatts. Its most active markets are the West coast, Northeast, Appalachia, Texas and the Rocky Mountains, though the company is not geographically constrained.

The company aims to begin construction on its first projects by the end of this year, the executive had said.

NovoHydrogen declined to comment. GreenFront and Modern Energy did not respond to requests for comment.

Modern Energy, a certified B-Corporation, recently put $90m into net metered solar developer Industrial Sun along with partner EIG. In 2020 EIG committed USD 100m to Modern Energy through a debt facility to fund the development of clean energy assets.

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Exclusive: Zero-emission locomotive start-up in Series B capital raise

A locomotive start-up focused on the US market for zero-emission freight trains is undergoing a Series B capital raise, with sights on a much larger Series C raise next year.

OptiFuel Systems, a provider of zero-emission line haul locomotives and generation solutions, is conducting a $30m Series B capital raise.

The South Carolina-based firm is seeking to finalize the Series B by the end of this year, and plans to use proceeds to advance production of its zero-emission technologies for the rail industry, which represents a massive decarbonization opportunity, CEO Scott Myers said in an interview.

Meanwhile, the firm will seek to tap the market for around $150m for a Series C next year, Myers added. The company is not working with a financial adviser. 

While the Series B will focus on bringing to production some of OptiFuel’s smaller rail offerings, such as the switcher locomotives, the Series C will be mostly dedicated to progressing testing, manufacturing, and commercialization of its larger line haul locomotive.

The company is also considering making its own investments into digesters for RNG facilities, from which it would source the gas to run its RNG-fueled locomotives. As part of its offering, OptiFuel also provides refueling infrastructure, and envisions this aspect of its business to be just as profitable as selling trains.

“We anticipate that we would be the offtaker” of RNG, “and quite potentially, the producer,” Cynthia Heinz, an OptiFuel board member, said in the interview.

A systems integrator, OptiFuel offers modular locomotives for the freight industry that can run on zero-emission technology such as renewable natural gas, batteries, and hydrogen. The company recently announced that it will begin testing of its RNG line haul locomotive, which is a 1-million-mile test program that will take two years and require 10 RNG line haul locomotives.

Image: OptiFuel

The company’s target market is the 38,000 operating freight trains in the U.S., 25,000 of which are line haul locomotives run by operators like BASF, Union Pacific, and CSX. Fleet owners will be required to phase out diesel-powered trains starting next decade following passage of in-use locomotive requirements in California, which includes financial penalties for pollution and eventual restrictions on polluting locomotives. Other states are evaluating similar measures.

“The question is not will the railroads change over: they have to,” Myers said. “The question is, how fast?”

Following completion of testing, OptiFuel aims to begin full production of the line haul locomotive – which has a price tag of $5.5m per unit – in 2028, and is aiming to produce 2,000 per year as a starting point. The smaller switcher units are priced between $1.5m and $2.5m depending on horsepower.

OptiFuel has held discussions with Cummins, one of its equipment providers, to source at least 2,000 engines per year from Cummins to support its production goal. 

“That’s a $10bn-a-year market for us,” Myers added.

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Inside Intersect Power’s green hydrogen plans

California-based renewable energy developer Intersect Power anticipates huge capital needs for a quartet of regional energy complexes co-locating wind and solar with green hydrogen production in the Texas Gulf Coast, California and the American West.

Intersect Power, a solar developer that completed a $750m capital raise last year, is developing four large-scale green hydrogen projects that could eventually be spun off into a separate company, CEO Sheldon Kimber said in an interview.

Four regional complexes of 1 GW or more, co-located with renewables, are in development, he said. The first phases of those, totaling several hundred megawatts, will come online between 2026 and 2028.

Initial offtake markets include transportation, sustainable aviation fuel, and hydrogen for industrial use, Kimber said. Ultimately Intersect is aiming to serve ammonia exporters in the US Gulf Coast, particularly those exporting to Japan, Kimber said, adding that the company could contract with ammonia producers. He recently wrapped up a nine-day, fact-finding trip to Japan to better understand what he believes will be the end market for Intersect’s green ammonia.

“If you don’t know who your customer’s customer is, you’re going to get a bad deal,” Kimber said.

Intersects projects under development involve behind-the-meter electrolysis, co-located with Intersect’s wind and solar generation plants. In 2021 the company signed an MOU with electrolyzer manufacturer Electric Hydrogen. The contract is for 3 GW.

Intersect controls the land and is in the process of permitting the four projects, located in Texas, California and another western US location that Kimber declined to name. The primary focus now is commercial development of the offtake and transportation, he said.

‘Boatload of equity’

Kimber said the company will be ready to announced details of the projects when they are ready to seek financing. He estimates that upwards of $12bn will need to be raised for the package of complexes.

“There’s going to be an enormous need for capital,” Kimber said. Debt will make up between 60% and 90% of the raising, along with “a boatload of equity,” he said. Existing investors will likely participate, but as the numbers get bigger new investors will be brought on board.

Intersect has worked with BofA Securities and Morgan Stanley on past capital raise processes, and also has strong relationships with MUFG and Santander.

Moving forward the company could have a broader need for advisory services and could lend knowledge of the sector in an advisory capacity itself, Kimber said.

“The scope and scale of what we’re doing is big enough and the innovative aspect of what we’re doing is advanced enough that I think we have a lot we can bring to these early-stage financings,” Kimber said. “I think we’re going to be a good partner for advisory shops.”

In the short term Intersect has sufficient equity from its investors and is capitalized for the next 18-to-24 months, Kimber said. Last summer the company announced a $750m raise from TPG Rise Climate, CAI Investments and Trilantic Energy Partners North America.

“People don’t want to pay ahead for the growth in fuels,” Kimber said, adding that reaching commercial milestones will build a compelling valuation.

Intersect could spin off its hydrogen developments to capitalize them apart from renewables, Kimber said.

“Every single company in this space is looking at that,” he said. “Do you independently finance your fuels business?”

Avoiding the hype

Right now the opportunity to participate in hydrogen is blurry because there is so much hype following passage of the IRA, Kimber said. Prospective investors should be focused on picking the right partners.

“What you’re seeing right now is everybody believing the best thing for them,” Kimber said, noting that his company has decided to keep relatively quiet about its activities in the clean fuels space to avoid getting caught up in hype. “The IRA happened, and every electrolyzer company raised their prices by fifty percent.”

Of those companies that have announced hydrogen projects in North America, Kimber said he believes only a handful will be successful. Those companies that have successfully developed renewables projects of more than 500 MW are good candidates, as are companies that have managed to keep a fluid supply chain with equipment secured for the next five years.

“That is a very short list,” he said.

Lenders on the debt side will want to start determining how projects will get financed, and which projects to finance, in the next 18 months, Kimber said.

Finding those who have been innovating on the front-end for years and not just jumped in recently is a good start, Kimber said.

“Hydrogen will happen, make no mistake,” Kimber said. He pointed to the recent European directive that 45% of hydrogen on the continent be green by 2030 and Japan’s upcoming directive to potential similar effect. Once good projects reach critical points in their development they will start to trade, probably in late 2024, he said.

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