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Exclusive: Modular green ammonia firm eyeing capital raise

A green ammonia firm with distributed modular technology is beginning discussions with advisors for future capital raises. It has $1bn of indicated interest in its global sales pipeline.

Talus Renewables is seeking to scale the deployment of its modular green ammonia offering with an additional capital raise.

The start-up is beginning discussions with potential bankers that could advise on a Series B capital raise, as its pipeline grows for distributed ammonia production systems that it can deliver globally, Co-Founder and CEO Hiro Iwanaga said in an interview.

Image: Talus Renewables

Talus offers containerized systems that produce green ammonia from power, water, and air, in the form of the TalusOne (up to 1.4 tonnes of green ammonia daily) and talusTen (up to 20 tonnes per day).

The company delivered its first system to Kenya Nut Company, a multinational agricultural firm in east Africa, under a 15-year fixed-price ammonia offtake agreement, Iwanaga said. The company has a pipeline of approximately $1bn of indicated interest for ammonia from potential customers, which include large farms and mining companies in several global jurisdictions, including the US.

He declined to comment specifically on how much the company would seek to raise in its next fundraising round, but said, “We have the demand for a $1bn worth of systems.” He added that, though the technology is largely proven, there is a perception of “young company risk” that the firm will need to overcome by delivering and operating its first systems.

Iwanaga, who views the company as a yieldco, required to raise several hundred million dollars every year to deploy its assets, is starting discussions with banks about advisory work for future capital raises.

“I think about our company as an infrastructure company,” he said. “We sign 10- to 15-year-long, fixed-price committed offtake agreements, and these projects earn 10% – 25% unlevered returns.”

A recently completed $22m Series A fundraising will fund the delivery of the next three to four systems before the end of the year, Iwanaga said, stretching Talus’ footprint to Europe and the US, with one more system heading to South America.

The company is deploying to large farms and mining companies, where ammonia is used as a blasting agent. In the US, the company has partnered with agribusiness Wilbur-Ellis and farmer-owned cooperative Landus, Iwanaga said.

Scaling quickly

While many green ammonia projects are popping up around the world, Iwanaga emphasizes that Talus will be able to deliver tons in the next 1 – 2 years, compared to the multi-year project timelines for larger projects requiring more complex supply chains.

“What we’re focused on is improving cost, reliability, and sustainability by driving local production – on-site or near-site production,” Iwanaga said.

Talus has several LOIs for offtake and is working to reach final agreements – work that takes several months at a good site and includes leasing land, permitting, and connecting to power.

The Talus systems are manufactured currently in China, Vietnam, and the US, but the company is moving the majority of its operations out of China and into Vietnam, while some of the Vietnam operations are moving to the US.

The company has partnered with a global auto OEM to lead its manufacturing, which has allowed it to scale quickly.

“Manufacturing a complex, high-temperature, high-pressure gas handling system is very difficult,” he said. “That [OEM] partnership has allowed us to scale in a way that I don’t think very many others have,” he said.

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EverWind purchases three wind farms to power H2 and ammonia plant

The Canadian developer has been looking to finance its Point Tupper ammonia production and export facility near Halifax.

EverWind Fuels has purchased three wind farm projects in Nova Scotia to power Phase 1 of its green hydrogen and ammonia project, according to a news release.

The Hydrogen Source reported in April that the Canadian renewable fuels developer was preparing to launch a process to raise an estimated $800m in debt for its Point Tupper ammonia production and export facility near Halifax.

The Windy Ridge, Bear Lake and Kmtnuk wind farms represent approximately 530 MW. Membertou is a majority owner in the later two projects. The projects will be developed in partnership with Renewable Energy Systems (RES) and Black & Veatch.

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CarbonQuest and Daroga Power partner on C&I fuel cell and carbon capture

The partnership is providing clients with financing for the upfront capital necessary to purchase their fuel cell and carbon capture systems.

CarbonQuest, a carbon capture technology provider supporting the onsite decarbonization of buildings, campus settings and other facilities, and Daroga Power, a ​​sustainable infrastructure and distributed generation developer, have entered a partnership to bring a low-carbon fuel cell solution to the commercial and industrial sectors in the U.S. and Canada.

Under the terms of the partnership, Daroga Power will develop, install and operate fuel cells that can power industrial facilities, buildings, and campus settings without interruptions and without the need for batteries, according to a news release.

CarbonQuest’s Distributed Carbon Capture™ system will be used in conjunction with the fuel cells to capture the systems’ generated carbon before it is emitted to the atmosphere. CarbonQuest will also sell the captured carbon to industrial users.

To hasten adoption, the partnership is providing clients with financing for the upfront capital necessary to purchase the systems. Daroga and CarbonQuest will also provide long-term maintenance support for the fuel cells and carbon capture components.

Given the power capacity limitations of the New York regional grid, along with delayed renewable interconnection, a fuel cell + carbon capture solution offers both short- and long-term benefits to many types of energy users with on-site, base-load power that is also low carbon.

CarbonQuest and Daroga aim to sign on approximately 20 projects in the next 12 months, which will generate an anticipated 100,000 metric tons per year of recycled, liquified Sustainable CO2.

After being captured by CarbonQuest’s system, the liquid CO2 will be sold to various off-takers across the Northeastern U.S. Given the severe constraint of CO2 supply in the region, CarbonQuest’s Sustainable CO2™ offers a unique solution for CO2 users while also supporting the growth of new carbon-based industries.

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Verdagy partners with Doral on electrolyzer supply

Verdagy has entered a strategic agreement to supply electrolyzers to global green hydrogen projects developed by Doral.

Verdagy, an electrolyzer startup, has reached a strategic agreement with Doral, a renewable energy developer, in which Verdagy will supply green hydrogen electrolysis systems to Doral through 2030.

The agreement is global with a focus on green hydrogen projects Doral is developing in EuropeUnited StatesAustralia and the Middle East, according to a news release.

“Doral has a proven track record of developing infrastructure-scale renewable energy projects for over 15 years and Verdagy is excited to work together with Doral to drive the transition to green hydrogen,” said Verdagy CEO Marty Neese.

“Verdagy has developed green hydrogen electrolyzers that seamlessly pair in real-time with renewable energy sources, have the highest efficiencies and are cost-effective. With Verdagy’s electrolyzers already operating for several years, we are excited to now use these in our infrastructure scale, green hydrogen projects,” said Doral Hydrogen Managing Director Yam Efrati-Bekerman.

Doral Energy currently has a 16 GW pipeline of renewable projects under development and 14MWh of battery storage in the US and Europe. Since June 2020, Doral Energy is traded on the Tel Aviv Stock Exchange under the ticker symbol: DORL. Doral Hydrogen is the Hydrogen subsidiary of Doral Group to develop, build, and operate green hydrogen and green ammonia projects in the USAAustraliaEurope, and MENA.

The company already operates an HRS in the Netherlands and is developing more than 1GW projects for green hydrogen and ammonia production. Some of the projects will be executed in 2025 and already secured the offtake, the news release states.

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Exclusive: Pattern Energy developing $9bn Texas green ammonia project

One of the largest operators of renewable energy in the Americas, San Francisco-based Pattern is advancing a 1-million-ton-per-year green ammonia project in Texas.

Pattern Energy knows a thing or two about large renewable energy projects.

It built Western Spirit Wind, a 1,050 MW project in New Mexico representing the largest wind power resource ever constructed in a single phase in the Americas. And it has broken ground on SunZia, a 3.5 GW wind project in the same state – the largest of its kind in the Western Hemisphere.

Now it is pursuing a 1-million-ton-per-year green ammonia project in Corpus Christi, Texas, at an expected cost of $9bn, according to Erika Taugher, a director at Pattern.

The facility is projected to come online in 2028, and is just one of four green hydrogen projects the company is developing. The Argentia Renewables project in Newfoundland and Labrador, Canada is marching toward the start of construction next year, and Pattern is also pursuing two earlier-stage projects in Texas, Taugher said in an interview.

The Corpus Christi project consists of a new renewables project, electrolyzers, storage, and a pipeline, because the electrolyzer site is away from the seaport. It also includes a marine fuels terminal and an ammonia synthesis plant.

Pattern has renewable assets in West and South Texas and is acquiring additional land to build new renewables that would allow for tax incentives that require additionality, Taugher said.

Financing for the project is still coming together, with JV partners and prospective offtakers likely to take project equity stakes along with potential outside equity investors. No bank has been mandated yet for the financing.

Argentia

At the Argentia project, Pattern is building 300 MW of wind power to produce 90 tons per day of green hydrogen, which will be used to make approximately 400 tons per day of green ammonia. The ammonia will be shipped to counterparties in Europe, offtake contracts for which are still under negotiation.

“The Canadian project is particularly exciting because we’re not waiting on policy to determine how it’s being built,” Taugher said. “The wind is directly powering our electrolyzers there, and any additional grid power that we need from the utility is coming from a clean grid, comprised of hydropower.“

“We don’t need to wait for rules on time-matching and additionality,” she added, but noted the renewables will likely benefit from Canada’s investment tax credits, which would mean the resulting ammonia may not qualify under Europe’s rules for renewable fuels of non-biological origin (RFNBO) as recently enacted.

Many of the potential offtakers are similarly considering taking equity stakes in the Argentia project, Taugher added.

Domestic offtake

Pattern is also pursuing two early-stage projects in Texas that would seek to provide green hydrogen to the domestic offtake market.

In the Texas Panhandle, Pattern is looking to repower existing wind assets and add more wind and solar capacity that would power green hydrogen production.

In the Permian Basin, the company has optioned land and is conducting environmental and water feasibility studies to prove out the case for green hydrogen. Pattern is considering local offtake and is also in discussions to tie into a pipeline that would transport the hydrogen to the Gulf Coast.

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Exclusive: New sustainability hedge fund to raise up to $2bn

A new hedge fund founded by a clean fuels industry veteran is gathering partners to raise up to $2bn initially for deployment into ammonia and other climate-transition technologies.

New Waters Capital, an emerging hedge fund based in New York City, is gathering its primary partners for its first fundraise of between $1bn and $2bn, founder Bill Brown said in an interview.

Brown formerly spent 15 years at North Carolina-based 8 Rivers Capital, which recently announced an ammonia project in Texas. Brown, a co-founder, sold his shares to South Korea’s SK, Inc. in that company’s majority takeover of 8 Rivers last year.

Brown recently created New Waters as a multi-strategy fund manager to invest in publicly traded companies in sustainability, AI, and clean fuels.

“The molecule-based economy is really important, and there’s some companies that have been in the molecule-based economy that are not really sure what they’re doing,” Brown said.

This creates an environment ripe for disruption, he said.

The firm is in the process of selecting its prime brokers, which will help determine the size of New Waters’ fundraises, Brown said. The first raise will be conducted in the next six months, and likely not be larger than $2bn to start.

New Waters’ law firm is Seward & Kissel.
The Wild West of molecules

Of all hydrogen produced in the US, about 65% is used for fertilizer production, Brown said. In Japan, where hydrogen is being co-fired with coal, replacing all coal-fired generation with ammonia would require 10 times the current ammonia production of the US.

“The market for molecules is so big, and yet the largest producer in the US of ammonia is CF Industries.” That company has one plant in Louisiana that represents roughly one third of total US ammonia production. “So CF is tiny compared to the opportunities out there.”

Brown said he is looking for the companies that are going to be the Valero and Phillips 66 of ammonia refining. He believes 8 Rivers is on track for something like that.

“We look at companies like that,” he said. “I think that entire market is up for grabs right now; it’s a whole new market.”

 Companies that can seize that market are the companies that are going to be part of the energy system of the future.

“In many respects right now, we’re in the Wild West, if you will, of the molecules of the future,” Brown said.

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exclusive

Pharma and fuels tech provider could be ready for public listing

International biotechnology firm Insilico Medicine is applying the algorithms that produce novel drugs to synthesizing more sustainable petrochemical fuels and materials.

Insilico Medicine, a global biotechnology firm serving the pharmaceutical and carbon-based energy industries, could be ready for a public listing in the next phase of its corporate evolution.

Insilico, founded in Baltimore and now based in Hong Kong, has raised about $400m in private capital to date and is in the position of a company that would be exploring a public listing in the US and Hong Kong, CEO Alex Zhavoronkov said in an interview. He declined to say if he has hired a financial advisor to run such a process but said a similar company in his position would have.

The generative AI platform that the company uses to produce novel drugs can be applied to produce more sustainable carbon-based fuels, Zhavoronkov said. The objective is to maximize btu and minimize CO2, making the fuels burn longer and cleaner.

Saudi Arabia’s state oil company Aramco is a user of the technology and participated in Insilico’s $95m Series D (oversubscribed and split between two sub-rounds) last year through its investment arm Prosperity7.

Petrochemistry is going to be needed well into the future, Zhavoronkov said. In addition to renewable energy and other ESG efforts, the efficiency of petrochemicals should be a top priority.

“If you burn certain petrochemicals in certain combinations, you can achieve a reasonably clean burn and an energy efficient burn,” he said. For specific tasks like space travel or Formula 1 racing, combined fuels produce the necessary torque, and generative chemistry can achieve those objectives in a more sustainable way. “I think that we can make the world significantly cleaner just by modifying petrochemical products.”

The technology can also be used to make organic matter in petrochemical products degrade more quickly, which is useful in the case of plastics, Zhavoronkov said.

The company’s AI is primarily based in Montreal and in the drug discovery business in China, but fuel research takes place in Abu Dhabi. Zhavoronkov said he has hired a lot of “AI refugees” from Russia and Ukraine to work at the latter location. The company has 40 employees in the UAE and will likely scale to 70.

Insilico is capitalized for the next two years or so, he said. That doesn’t account for revenue, which closed at just under $30m in 2022. The petrochemical and materials business is under the AI research arm of the business, which is covered by funds raised to date.

“Our board would probably not allow me to reinvent myself as an energy play,” Zhavoronkov said. But the board does not object to applying resources to petrochemical products.

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