Personnel moves

NovoHydrogen hires director of project development

The new director will be joining a team mandated to develop and deliver renewable hydrogen solutions to large-scale industrial, transportation, and power sector customers.

January 17, 2023

NovoHydrogen, a renewable hydrogen developer based in Colorado, has hired Jason Harris as director of project development, according to a post on LinkedIn.

Harris previously worked as a director of market strategy at AES Clean Energy and before that held positions at sPower and NextEra Energy Resources.

He will be joining a team mandated to develop and deliver renewable hydrogen solutions to large-scale industrial, transportation, and power sector customers, his post reads.

NovoHydrogen and TigerGenCo in November said they would advance development of green hydrogen capacity to reduce reliance on natural gas at the Bayonne Energy Center located in New Jersey. NovoHydrogen will develop and operate the hydrogen production facility to reduce Bayonne’s carbon emissions.

The company is also a partner in the Aliance for Clean Hydrogen Energy Systems (ARCHES) for the California DOE Hydrogen Hub submission.

Harris did not respond to a request for comment.

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Project finance, Project news, Raising capital

SAF developer eschews high-cost debt and equity to pursue DOE loan guarantee

A Colorado-based developer of sustainable aviation fuel projects will forgo high-cost equity and debt financing from the market to pursue a loan from the DOE, delaying completion of a SAF facility by a year.

Gevo, Inc CEO Patrick Gruber said on an earnings call this week that the company, a developer of low carbon fuels and chemicals, will forgo for now the high-cost equity and debt proposals it has received from potential investors for the construction of its first sustainable aviation fuel plant in South Dakota.

Instead, the company will seek a low-interest loan from the DOE – a decision that will delay the in-service date of its first SAF facility, known as Net Zero 1, by about a year, Gruber said.

Net Zero 1, in Lake Preston, South Dakota, is expected to be the first of several SAF projects the company is seeking to build using a modularized construction method, Gruber said. Using corn as feedstock, it would have the capability to produce approximately 60 million gallons per year of liquid hydrocarbons in the form of jet fuel and renewable gasoline. The plant is also expected to produce at least 420,000,000 pounds per year of high-value nutritional products.

The company expects to eventually secure third-party debt and equity investment in its net-zero projects, and to make money through development, fees, licenses, and a “carry” in the project – an equity interest that doesn’t necessarily require a cash investment, according to Gruber.

However, Gruber added that, in the current environment, “interest rates are high and expected to go higher.” After discussions with potential equity investors, Gruber said Gevo believes that the correct approach is to secure the DOE loan guarantee. The DOE process will delay financial close into 2024 and startup of Net Zero 1 to at least 2026, Gruber said.

In late April, Gevo gave notice that its offtake arrangement with Trafigura had been canceled. Gevo last year decided to utilize ethanol fermentation technology instead of isobutanol fermentation technology to produce SAF, requiring an amendment to the Trafigura deal that the parties could not agree to.

“This gives us a little more breathing room,” Gruber commented on the call, noting that airlines would step up for the lost offtake.

Addressing specifically the benefits to Gevo in delaying the Net Zero 1 project to pursue the DOE loan, Gruber noted the company doesn’t need to make orders for long-lead items between now and then.

“It gives us time to get the financing in order, make sure we’ve got everything in order to do the best deal,” he said. “We’ve got to go along with [the DOE] path. It helps with the overall financing.”

Gruber noted during the call that Gevo is looking at existing brownfield sites to build additional SAF plants, at a cost of roughly $400m – $500m depending on existing infrastructure.

May 12, 2023

Innovation, Project news, Regulatory

Drax Group sells carbon removal credits for future US projects

C-Zero, an environmental consultancy, will purchase carbon dioxide removals credits from Drax representing 2,000 metric tons of permanently stored carbon.

Carbon removals and renewable energy company Drax Group today announced a carbon removals deal with C-Zero Markets (C-Zero), an environmental consultancy.

C-Zero will purchase carbon dioxide removals (CDR) credits from Drax representing 2,000 metric tons of permanently stored carbon under the terms of the agreement. The deal, which converts a previous MoU into a firm offtake agreement, is connected to Drax’s future deployment of carbon negative BECCS in the U.S., according to a news release.

“Organizations like C-Zero and the clients it supports are looking to permanent, engineered carbon removals that are high-integrity to ensure their climate commitments are achieved,” said Laurie Fitzmaurice, President, Carbon Removals at Drax. “As those deadlines approach, experts predict demand will soar for CDRs that are credible, quantifiable, and auditable – like those provided through BECCS by Drax – making now the smartest time to invest.”

This latest agreement between Drax and C-Zero is a clear indicator that demand for BECCS-derived carbon removals continues to increase. Today’s announcement comes just weeks after a firm offtake deal with Karbon-X, and Drax inked MoUs with Respira and C-Zero prior to that.

Drax also launched an independently operated business unit headquartered in Houston, Texas, at the beginning of the year with the intent of becoming the global leader in large-scale carbon removals. This business unit will oversee the development and construction of Drax’s new-build BECCS plants in the US and internationally, and it will work with a coalition of strategic partners to focus on an ambitious goal of removing at least 6 Mt of CO₂ per year from the atmosphere.

April 18, 2024

Innovation, Project news

United, Tallgrass, and Green Plains form JV to develop SAF from ethanol

The JV – Blue Blade Energy – aims to develop and then commercialize a novel sustainable aviation fuel technology that uses ethanol as its feedstock.

United Airlines, Tallgrass, and Green Plains Inc. today announced a new joint venture – Blue Blade Energy – to develop and then commercialize a novel sustainable aviation fuel (SAF) technology that uses ethanol as its feedstock.

If the technology is successful, Blue Blade is expected to proceed with the construction of a pilot facility in 2024, followed by a full-scale facility that could begin commercial operations by 2028. The offtake agreement could provide for enough SAF to fly more than 50,000 flights annually between United’s hub airports in Chicago and Denver.*

Blue Blade’s new SAF technology was developed by researchers at the U.S. Department of Energy’s Pacific Northwest National Laboratory (PNNL), a leading center for technological innovation in sustainable energy. SAF, which uses non-petroleum feedstock, is a low-carbon alternative to traditional jet fuel that offers up to 85%** lower lifecycle greenhouse gas emissions.

“The production and use of SAF is the most effective and scalable tool the airline industry has to reduce carbon emissions and United continues to lead the way,” said United Airlines Ventures President Michael Leskinen. “This new joint venture includes two expert collaborators that have the experience to construct and operate large-scale infrastructure, as well as the feedstock supply necessary for success. Once operational, Blue Blade Energy has the potential to create United’s largest source of SAF providing up to 135 million gallons of fuel annually.”

United, Tallgrass, and Green Plains will each provide their unique industry expertise to help develop the joint venture. Under this collaborative approach:

Tallgrass will manage research and development of the technology, including pilot plant development, and will manage the construction of the production facility.
Green Plains will supply the low-carbon ethanol feedstock, and use its ethanol industry expertise to manage operations once the pilot facility is constructed.
United Airlines will assist with SAF development, fuel certification and into-wing logistics, and has also agreed to purchase up to 2.7 billion gallons of SAF produced from the joint venture.

“At Tallgrass, we are striving to innovate how we deliver the energy that powers our nation and enables our quality of life,” said Alison Nelson, Vice President, Business Development at Tallgrass. “Air travel uniquely connects people and improves lives, and the advancement of this novel SAF technology presents a meaningful opportunity to reduce emissions from aviation. We are excited to partner with industry leaders United Airlines and Green Plains on this initiative.”

If the technology is commercialized, the location of Blue Blade’s initial plant would allow easy access to low-carbon feedstock from Green Plains’ Midwest ethanol production facilities. While the initial SAF facility intends to use ethanol, the technology has the capability to work with any alcohol-based feedstock as its fuel source.

“Our transformation to a true decarbonized biorefinery model has positioned Green Plains to help our customers and partners reduce the carbon intensity of their products by producing low-carbon proteins, oils, sugars and now decarbonized ethanol to be used in SAF,” said Todd Becker, President and CEO of Green Plains. “This partnership with world class organizations like United Airlines and Tallgrass, shows the value creation that is possible with our low-carbon platform. The potential impact of this project is a gamechanger for US agriculture, aligning a strong farm economy and a robust aviation transport industry focused on decarbonizing our skies.”

Blue Blade Energy marks one of the largest direct investments from United Airlines Ventures (UAV), United’s corporate venture arm, into SAF. Launched in 2021, UAV targets startups, upcoming technologies, and sustainability concepts that will complement United’s goal of net zero emissions by 2050 without relying on traditional carbon offsets. United has aggressively pursued strategic investments in SAF producers and revolutionary technologies including carbon capture, hydrogen-electric engines, electric regional aircraft and air taxis.

*Assuming current regulations requiring SAF to be blended with conventional jet fuel are removed to allow for the use of unblended SAF.
**Based on United’s current SAF supply

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January 31, 2023

Project news

Brookfield-owned renewables developer planning hydrogen co-location

An IPP and developer of wind, solar and storage projects is in early discussions with potential partners to co-locate electrolysis with its operating assets and projects in development.

Scout Clean Energy, the Boulder, Colorado-based IPP and renewables developer, is laying the groundwork to co-locate electrolysis for green hydrogen with its wind and solar assets, CEO Michael Rucker said in an interview.

The company’s Power2X team is charged with looking for alternative strategies, Rucker said.

“We are actively trying to match project opportunities with the future hydrogen economy,” he said, noting that the company’s operating wind portfolio provides a crucial piece of that. “Wind is an especially good fit for hydrogen production just in terms of pricing.”

Scout, which is owned by Brookfield Renewable, sees itself as producing green electrons and doesn’t want to get into marketing and distribution of hydrogen, Rucker said.

Brookfield acquired Scout in 2022 for $1bn, with the potential to invest an additional $350m to support development activities.

Scout has its first solar project in development in ERCOT, a market where shipping of hydrogen would make for a promising project, Rucker said. The company has also looked at the Midwest, where a robust SAF production ecosystem is forming, as well as the Pacific Northwest.

The company is already working with one hydrogen developer to match production to one of its wind farms, Rucker said. An exact location has not been selected.

Pricing diligence has been promising, Rucker said. But the offtake market in the US remains slow to develop despite regulatory encouragement.

“The IRA has given us maybe the most subsidized hydrogen production market in the world but it’s really being production-driven not demand-driven, so we really need to see more of the economy using hydrogen,” Rucker said. “I trust that will come, it’s just going to take longer than we think.”

Scout is not ready to take anything to market related to hydrogen, but ultimately there will be a need for financial advisory, Rucker said.

October 9, 2023

M&A

Exclusive: Ammonia plant sale paused until commercial operations

The sale process for a Texas ammonia plant has been paused until the facility reaches commercial operations.

Gulf Coast Ammonia, the developer of a world-scale ammonia plant in Texas City, Texas, has paused a sale process until the plant reaches commercial operations, according to two sources familiar with the matter.

The process to sell the plant, which will produce 1.3 million tons of ammonia per year, was underway earlier this year, led by Jefferies as sellside advisor. The plant was expected to reach COD in 2023, according to documentation.

The project was initiated by Agrifos Partners LLC and advanced to FID in collaboration with joint venture development partners Mabanaft and Macquarie Capital. Following the FID taken in late 2019, GCA is wholly owned by a joint venture of Mabanaft and Lotus Infrastructure (formerly known as Starwood Energy).

GCA is investing $600m towards the construction, operation, and ownership of the ammonia plant, which is situated on land owned by Eastman Chemical Company within Texas City’s industrial park. It includes a portion of Eastman’s port access.

In tandem with the ammonia plant construction, Air Products is building a $500m steam methane reformer to provide hydrogen to the plant via pipeline. Air Products noted in a recent investor presentation that the SMR project recently came onstream.

Officials at Lotus, Mabanaft, and Jefferies did not reply to inquiries seeking comment.

December 7, 2023

exclusive

M&A

RNG developer selling landfill gas portfolio

A Texas-based renewable natural gas developer has tapped an advisor and is selling a portfolio of waste-to-energy projects.

Morrow Energy, an RNG developer based in Midland, Texas, is working with a financial advisor to sell off a portfolio of waste-to-energy projects.

Sparkstone Capital Advisors, a boutique advisory firm based in Virginia, is the sellside advisor on the sale, according to three sources familiar with the matter.

Morrow and Sparkstone did not respond to requests for comment.

The Morrow portfolio in the US consists of 12 projects in Texas, Louisiana, Arkansas, Kansas, and Washington, according to its website.

Of note, Morrow has developed the Blue Ridge Landfill High BTU project, which is designed for up to 13,000 SCFM of raw landfill gas and can be expanded to up to 30,000 SCFM. Gas from the facility is sold and delivered to vehicle fuel markets in the US.

The company is led by Paul Morrow, its founder and president, who has worked in the RNG industry for over 20 years. Morrow Energy built its first renewable gas facility in the year 2000.

July 26, 2023