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NextEra, BlackRock, and Daimler launch fuel cell charging network company

The companies have launched Greenlane, their $650m joint venture to design, develop, install and operate a U.S. nationwide, high-performance zero-emission public charging and hydrogen fueling network for medium- and heavy-duty battery-electric and hydrogen fuel cell vehicles.

Daimler Truck North America (DTNA), NextEra Energy Resources, and BlackRock Alternatives, through a fund managed by its Climate Infrastructure business, (BlackRock), have launched Greenlane™, the name of their joint venture to design, develop, install and operate a U.S. nationwide, high-performance zero-emission public charging and hydrogen fueling network for medium- and heavy-duty battery-electric and hydrogen fuel cell vehicles.

They also unveiled renderings of the site layout as a major milestone in the development of the project.

Greenlane™ addresses the urgent need for a publicly available, nationwide electric charging infrastructure for commercial vehicles, especially for long-haul freight operations, and is a critical step toward developing a sustainable zero-emission vehicle ecosystem across North America.

The more than $650m joint venture has made significant progress since its inception in 2022. Greenlane’s first site will be in Southern California, and multiple additional sites are being acquired along various freight routes. The joint venture team is collaborating on the necessary infrastructure to holistically deploy the charging network. Dedicated software and hardware teams are working on developing a custom, commercial vehicle reservation platform to provide fleet managers, dispatchers and drivers with an industry-leading customer experience.

The network of charging sites will be built on critical freight routes along the east and west coasts and in Texas. Where synergistic, Greenlane™ will leverage existing infrastructure and amenities while also adding complementary greenfield sites to fulfill anticipated customer demand. Greenlane’s initial focus will be on battery-electric medium- and heavy-duty vehicles, followed by hydrogen fueling stations for fuel cell trucks, with plans to expand access to light-duty vehicles in the future to serve the greater goal of electrifying mobility.

“Greenlane is designed to begin to tackle one of the greatest hurdles to the trucking industry’s decarbonization – infrastructure,” said John O’Leary, president and chief executive officer, DTNA, in a news release. “The nation’s fleets can only transform with the critical catalyst of publicly accessible charging designed to meet the needs for medium- and heavy-duty vehicles. Together with our strong partners, BlackRock and NextEra Energy Resources, we are launching Greenlane to address the unique demands of the industry, support our mutual customers, and provide a dual benefit to all electric vehicle drivers who will be able to utilize this new network. We’re excited to take this next step and look forward to sharing more of Greenlane’s plans in the future.”

“NextEra Energy Resources is excited about the expected impact of our partnership with DTNA and BlackRock, and the critical role that Greenlane will play in the decarbonization of the commercial transportation sector and the broader U.S. economy,” said Rebecca Kujawa, president and chief executive officer of NextEra Energy Resources. “As a publicly available charging network developed to serve medium and heavy-duty commercial fleets, Greenlane serves a critical infrastructure need for its customers utilizing newly developed charging and energy management software solutions, while being powered by renewable energy. Greenlane represents an important investment, leveraging NextEra Energy Resources’ market leading experience in energy, analytics and infrastructure development to deliver end-to-end networking charging solutions through our NextEra Mobility subsidiary.”

“Reliable charging infrastructure is a critical component of the electrification of the commercial trucking industry. Greenlane provides an exciting opportunity to partner with key players in the energy transition and bring institutional capital to the growing sector. We are thrilled to be taking the next step in this joint venture with NextEra Energy Resources and Daimler Truck North America and to install the charging network across key freight routes in the United States,” said David Giordano, global head of climate infrastructure, BlackRock Alternatives.

Details on Greenlane’s executive leadership and groundbreaking on the first site will be revealed soon.

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Energy Vault appoints United Airlines executive to board

The appointee, Theresa Fariello, has served as senior vice president of Government Affairs & Global Public Policy for United Airlines since 2017.

Energy Vault Holdings, a provider of sustainable grid-scale energy storage solutions, has appointed Theresa Fariello to the company’s Board of Directors effective February 1.

She replaces Henry Elkus, founder and CEO of Helena, a strategic partner and Series B-1 investor in Energy Vault, upon his concurrent departure from the Board.

Fariello has served as senior vice president of Government Affairs & Global Public Policy for United Airlines since 2017. In this role, she leads United Airlines’s federal, state, local, and international government engagement, including environmental affairs. Prior to her role at United Airlines, Fariello served a 16-year tenure at ExxonMobil, where she advised executive leadership on key governmental and policy matters. Prior to her time at ExxonMobil, Fariello served as deputy assistant secretary for International Energy Policy in the Office of International Affairs at the US Department of Energy and held senior leadership positions at Occidental Petroleum Corporation.

“We are honored to welcome Theresa, who brings extensive and valuable experience in government affairs and public policy at leading public companies to Energy Vault’s Board of Directors,” said Robert Piconi, chairman and chief executive officer, Energy Vault. “The recent passage of the IRA is one example of a significant accelerator for our industry and our customers in the United States. Theresa’s leadership and experience will help us fully leverage the opportunities associated with this landmark legislation while strategically optimizing our global approach to working with government organizations in an increasingly complex regulatory and public sector environment. I look forward to working with her as we execute our global growth plans.”

“It is a distinct privilege to join Energy Vault’s Board of Directors,” said Theresa Fariello. “I am inspired by Energy Vault’s mission and commitment to creating a cleaner, more sustainable future. As the need to address and combat climate change becomes ever more urgent, so too does the need to shape environmental and climate policy to accelerate the deployment of innovative solutions, such as Energy Vault’s energy storage technologies. I welcome the opportunity to work alongside the rest of my fellow board members, and I look forward to lending my voice and experience to the company as it continues to grow.”

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DOE award for DAC-to-methanol design study

A consortium including TDA Research and Verde Clean Fuels will design a DAC-to-green methanol system.

A consortium led by TDA Research and including Verde Clean Fuels has been awarded funding from the US Department of Energy (DOE) to complete a conceptual design study for a system having the potential of capturing and utilizing ambient CO2 to produce “green” methanol, according to a news release.

Under the award, TDA will design a direct air capture (DAC) process for sourcing of CO2 from the atmosphere and lead the integration of the DAC with the methanol plant. Verde plans to design and model the methanol production unit using its proprietary STG+ technology, with the goal to utilize CO2 from the DAC, and hydrogen from a carbon-free source, to produce green methanol. Several other consortium partners will also contribute.

The University of Colorado – Denver will carry out a lifecycle analysis using process input from TDA. As reflected in the overall project plan, TDA and Verde Clean Fuels plan to complete conceptual design and review the technoeconomic and technology gap analyses and develop the technology maturation plan.

The award and project period will last to the end of calendar year 2024. Total funding under the award to the consortium is $400,000. An additional $100,000 is expected to come from non-DOE sources, for aggregate funding of up to $500,000 for the project. Based on the results of the study, other project phases may follow.

The project provides another demonstration opportunity for the versatility and application of Verde’s STG+ technology.

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Gulf Coast Sequestration appoints CEO

GCS is building a world-scale carbon sequestration hub on the Gulf Coast.

Gulf Coast Sequestration has named Dave Cook as CEO.

Prior to joining GCS, Cook was a director of Vaalco Energy, following its merger with TransGlobe Energy Corporation of which he was Chair from 2019 to 2022. Previously, he served as CEO of Noreco in London and INEOS DENOS in Copenhagen. Earlier in his career, he spent more than 20 years with BP in various international assignments.

GCS is building a world-scale carbon sequestration hub on the Gulf Coast.

W. Gray Stream, founder of GCS, will assume the role of Executive Chairman. Completing the leadership team, Benjamin Heard will serve as Chief Strategy Officer, while Scott Stepp is Chief Financial Officer.

“With two Class VI permit applications with the Environmental Protection Agency, GCS is at the forefront of our nation’s efforts to develop and implement carbon capture and sequestration. Under Dave’s leadership, I’m confident we are well positioned to continue our significant progress toward building a carbon sequestration hub on the Gulf Coast,” Stream said.

The addition of Cook follow the recent hire of former Louisiana Department of Natural Resources (LDNR) regulator Kaycee Garrett as Head of Permitting. Garrett worked in the Underground Injection Control section of the LDNR Office of Conservation for ten years, followed by five years of consulting experience to advance injection well permit applications for operators across the Gulf Coast.

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Interview: Vinson & Elkins’ Alan Alexander on the emerging hydrogen project development landscape

Vinson & Elkins Partner Alan Alexander, whose clients include OCI and Lotus Infrastructure, has watched the hydrogen project development space evolve from a fledgling idea to one that is ready for actionable projects.

Vinson & Elkins Partner Alan Alexander, whose clients include OCI and Lotus Infrastructure, has watched the hydrogen project development space evolve from a fledgling idea to one that is ready for actionable projects.

In the meantime, a number of novel legal and commercial issues facing hydrogen project developers have come to the forefront, as outlined in a paper from the law firm this week, which serves as a guide for thinking through major development questions that can snag projects.

In an interview, Alexander, a Houston-based project development and finance lawyer, says that, although some of the issues are unique – like the potential for a clean fuels pricing premium, ownership of environmental attributes, or carbon leaking from a sequestration site – addressing them is built on decades of practice.

“The way I like to put it is, yes, there are new issues being addressed using traditional tools, but there’s not yet a consensus around what constitutes ‘market terms’ for a number of them, so we are having to figure that out as we go,” he says.

Green hydrogen projects, for example, are “quite possibly” the most complex project type he has seen, given that they sit at the nexus between renewable electricity and downstream fuels applications, subjecting them to the commercial and permitting issues inherent in both verticals.

But even given the challenges, Alexander believes the market has reached commercial take-off for certain types of projects.

“When the hydrogen rush started, first it was renewables developers who knew a lot about how to develop renewables but nothing about how to market and sell hydrogen,” he says. “Then you got the people who were very enthusiastic about developing hydrogen projects but didn’t know exactly what to do with it. And now we’re beginning to see end-use cases develop and actionable projects that are very exciting, in some cases where renewables developers and hydrogen developers have teamed up to focus on their core competencies.”

A pricing premium?

In the article, Vinson & Elkins lawyers note that commodities pricing indices are not yet distinguishing between low-carbon and traditional fuels, even though a clean fuel has more value due to its low-carbon attributes. The observation echoes the conclusion of a group of offtakers who viewed the prospect of paying a premium for clean fuels as unrealistic, as they would need to pass on the higher costs to customers.

Eventually, Alexander says, the offtake market should price in a premium for clean products, but that might depend in the near term on incentives for clean fuels demand, such as carbon offsets and levies, like the EU’s Carbon Border Adjustment Mechanism.

“Ultimately what we need is for the market to say, ‘I will pay more for low-carbon products,’” he says. “The mindset of being willing to pay more for low-carbon products is going to need to begin to permeate into other sectors. 30 or 40 years ago the notion of paying a premium for an organic food didn’t exist. But today there are whole grocery store chains built around the idea. When the consumer is willing to pay a premium for low-carbon food, that will incentivize a farmer to pay a premium for low carbon fertilizer and ammonia, which will ultimately incentivize the payment of a premium for low-carbon hydrogen. The same needs to repeat itself across other sectors, such as fuels and anything made from steel.”

The law firm writes that US projects seeking to export to Europe or Asia need to take into account the greenhouse gas emissions and other requirements of the destination market when designing projects.

In the agreements that V&E is working on, for example, clients were first focused on structuring to make sure they met requirements for IRA tax credits and other domestic incentives, Alexander says. Meanwhile, as those clean fuels made their way to export markets, customers were coming back with a long list of requirements, “so what we’re seeing is this very interesting influx” of sustainability considerations into the hydrogen space, many of which are driven by requirements of the end-use market, such as the EU or Japan.

The more stringent requirements have existed for products like biofuels for some time, he adds, “but we’re beginning to see it in hydrogen and non-biogenic fuels.”

Sharing risk

Hydrogen projects are encountering other novel commercial and legal issues for which a “market” has not yet been developed, the law firm says, especially given the entry of a raft of new players and the recent passage of the Inflation Reduction Act.

In the case of a blue hydrogen or ammonia project where carbon is captured and sequestered but eventually leaks from a geological formation, for example, no one knows what the risk truly is, and the market is waiting for an insurance product to provide protection, Alexander says. But until it does, project parties can implement a risk-sharing mechanism in the form of a cap on liabilities – a traditional project development tool.

“If you’re a sequestration party you say, ‘Yeah, I get it, there is a risk of recapture and you’re relying on me to make sure that it doesn’t happen. But if something catastrophic does happen and the government were to reclaim your tax credits, it would bankrupt me if I were to fully indemnify you. So I simply can’t take the full amount of that risk.’”

What ends up getting negotiated is a cap on the liability, Alexander says, or the limit up to which the sequestration party is willing to absorb the liability through an indemnity.

The market is also evolving to take into account project-on-project risk for hydrogen, where an electrolyzer facility depends on the availability of, for example, clean electricity from a newly built wind farm.

“For most of my career, having a project up and reaching commercial operations by a certain date is addressed through no-fault termination rights,” he says. “But given the number of players in the hydrogen space and the amount of dollars involved, you’re beginning to see delay liquidated damages – which are typically an EPC concept – creep into supply and offtake agreements.”

If a developer is building an electrolyzer facility, and the renewables partner doesn’t have the wind farm up and running on time, it’s not in the hydrogen developer’s interest to terminate through a no-fault clause, given that they would then have a stranded asset and need to start over with another renewable power provider. Instead, Alexander says, the renewables partner can offset the losses by paying liquidated damages.

Commercial watch list

In terms of interesting commercial models for hydrogen, Alexander says he is watching the onsite modular hydrogen development space as well as power-to-fuels (natural gas, diesel, SAF), ammonia and methanol, given the challenges of transporting hydrogen.

“If you’re going to produce hydrogen, you need to produce it close to the place where it’s going to be consumed, because transporting it is hard. Or you need to turn it into something else that we already know how to transport – natural gas, renewable diesel, naphtha, ammonia.”

Alexander believes power-to-fuels projects and developers that are focused on smaller, on-site modular low-carbon hydrogen production are some of the most interesting to watch right now. Emitters are starting to realize they can lower their overall carbon footprint, he says, with a relatively small amount of low-carbon fuels and inputs.

“The argument there is to not completely replace an industrial gas supplier but to displace a little bit of it.”

At the same time, the mobility market may take off with help from US government incentives for hydrogen production and the growing realization that EVs might not provide a silver-bullet solution for decarbonizing transport, Alexander adds. However, hydrogen project developers targeting the mobility market are still competing with the cost of diesel, the current “bogey” for the hydrogen heavy mobility space, Alexander says.

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Exclusive: Middle market flagship fund to target e-fuels, renewables

A new $1.5bn US-focused flagship fund focused on middle market companies is in discussions with new and existing LPs now and will consider e-fuels and other sustainable molecules in its deployment.

Energy Impact Partners, the New York-based investment firm, is in discussions with new and existing LPs to raise a $1.5bn flagship fund focused on the middle market, according to two sources familiar with the matter.

The raise is being done without a financial advisor, the sources said. Once complete, it will target platforms and assets in the $40m to $50m range.

While the fund will be broadly focused on renewables, e-fuels and other sustainable fuels companies will be considered, one of the sources said.

The investment manager has invested in clean fuels via equity positions in Electric Hydrogen, Terragia and Metafuels, among others.

EIP did not respond to requests for comment.

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Exclusive: Plug Power enlists bank to evaluate financing options

The cash-burning company is working with a bulge-bracket American bank to evaluate debt financing options to help stave off a liquidity crisis.

Plug Power is working with Goldman Sachs to evaluate a capital raise in the form of debt financing to shore up its balance sheet, sources said.

The New York-based company recently said it was at risk of a liquidity crisis in the next 12 months if it is not able to raise additional capital, noting it was exploring various options for bringing in financing.

Its total cash and cash equivalents as of September 30 stood at $567m, representing a decline of $580m for the quarter, according to SEC filings. The company also has nearly $1bn of restricted cash balances stemming from sale-leaseback transactions, of which $50m becomes available per quarter.

In a shareholder letter and on its 3Q23 earnings call, executives outlined the financing options that are on the table for the company, including a debt raise, funding from the Department of Energy’s Loan Programs Office, and bringing in project equity partners for its facilities.

The company is “evaluating varied debt financing solutions to support [its] growth,” according to the shareholder letter. CFO Paul Middleton added on the call that they’ve had “some expressions of offers for ABL-like facilities” as well as restricted cash advance facilities. 

CEO Andy Marsh said the company would need to raise between $500m – $600m, according to a news report from Barron’s.

Representatives of Plug Power and Goldman Sachs declined to comment.

Plug is also working towards a conditional commitment from the DOE Loan Program Office to finance plants in its green hydrogen network. 

“The framework that we’re working on with them is a $1.5bn platform that would fund our green plants and would fund from construction phase onwards,” CFO Middleton said, adding that the funding could amount to as much as 80% of the projects. 

Middleton said he expected the DOE loan, if granted, would start funding in early 2Q24, and could even be used to back lever some of its existing plants in Texas and New York.

The company’s stock traded today with a $2.34bn market cap, while its outstanding debt consists of a $200m convertible note issued in 2020.

The notes traded around 130 cents of par before Plug’s going concern announcement, and subsequently dropped to trade in the high-70s, with quotes this week in the 80s.

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