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Pattern Energy enters port deal for green fuels project

Pattern Energy will use some 6,000 acres in Newfoundland, Canada for the first phase of a green ammonia export project.

Pattern Energy has reached a deal to use some 6,000 acres of industrial and forest lands in Argentia, Newfoundland for a planned 300 MW green ammonia export facility.

The Port of Argentia announced the binding agreement today, with undisclosed commercial terms including land lease rates at the Port, priority berthing charges, and a wind royalty on electricity sales.

The agreement also includes commercial terms for Argentia Capital, a signatory to the agreement, to co-invest in the renewable project as a Limited Partner as well as receive a gross revenue royalty on ammonia sales.

If the parties opt to pursue a second phase of the project, it would entail 1.2 GW of wind energy at a cost of CAD 5.4bn, the CBC reported.

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GE Gas demonstrating hydrogen co-firing with Indian power utility

NTPC will provide the H2 required for the project.

GE Gas Power and Indian power utility NTPC will explore hydrogen co-firing blended with natural gas in GE’s 9E gas turbine installed at NTPC’s Kawas gas power plant in Gujarat, India,  according to a press release.

The 645 MW gas power plant is powered by four GE 9E gas turbines operating in a combined-cycle mode. NTPC will provide the H2 required for the project.

GE’s E- Class gas turbine portfolio currently has the capability to burn up to 100% by volume of hydrogen when blended with natural gas. This capability varies depending on the type of combustion system used. For fuels with over 5% hydrogen by volume, gas turbine accessories need to be evaluated and possibly modified to reliably deliver the fuel to the combustors.

“NTPC, with a large fleet of power generation facilities delivering more than 70 GW across India, has been at the forefront when it comes to piloting new hydrogen-related initiatives,” Ujjwal Kanti Bhattacharya, Director (Projects) at NTPC, said in the release. “NTPC is committed to playing a key role in India’s energy transition journey as the country marches ahead to achieve net-zero target and climate goals.”

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Hydrogen and CCUS factor heavily in U.S. DOE heavy-industry decarbonization selections

The projects are expected to reduce the equivalent of more than 14 million metric tons of carbon dioxide emissions each year.

Hydrogen and CCUS factor heavily into the projects that have been selected by the U.S. Department of Energy (DOE) as part of a $6 billion funding program for 33 projects across more than 20 states to decarbonize energy-intensive industries and reduce industrial greenhouse gas emissions.

The full list of winners selected for grant negotiations is here. Below are some of the highlights:

Steelmaker SSAB has been selected to negotiate for a grant of up to $500m for the Hydrogen-Fueled Zero Emissions Steel Making project, which would bring green hydrogen-based steel production to the United States to build the first commercial-scale facility in the world using fossil-free Direct Reduced Iron (DRI) technology with 100% hydrogen in Perry County, Mississippi. The project also plans to expand SSAB’s Montpelier, Iowa steelmaking facility to utilize the resulting hydrogen-reduced DRI. SSAB has signed a letter of intent for Hy Stor Energy to supply green hydrogen and renewable electricity to the DRI facility. 

Cleveland-Cliffs has been selected to receive up to $500m for the Hydrogen-Ready Direct Reduced Iron Plant and Electric Melting Furnace Installation project for iron and steel, including plans to install a hydrogen-ready flex-fuel Direct Reduced Iron (DRI) plant and two electric melting furnaces at Cleveland-Cliffs’ Middletown Works mill in Ohio. 

Orsted would receive up to $100m for its Star e-Methanol project, which plans to use captured carbon dioxide from a local industrial facility to produce e-methanol to reduce the carbon footprint for hard-to-electrify sectors like shipping. Orsted’s facility is estimated to produce up to 300,000 metric tons of e-methanol per year and would reduce the carbon footprint by 80% or more than traditional production methods. 

Constellium has been selected to receive up to $75m for a zero carbon aluminum casting plant at its Ravenswood, West Virginia facility. The project would install low-emissions SmartMelt furnaces that can operate using a range of fuels, including clean hydrogen.

The National Cement Company of California would receive up to $500m for a carbon-neutral cement plant in Lebec, California. Instead of using fossil fuels, the project would use locally sourced biomass from agricultural byproducts such as pistachio shells, replace clinker with a less carbon intensive alternative (calcined clay) to produce limestone calcined clay cement (LC3), and capture and sequester the plant’s remaining approximately 950,000 metric tons of carbon dioxide each year.

Heidelberg Materials would receive up to $500m for an integrated carbon capture, transport, and storage system at their newly modernized plant located in Mitchell, Indiana. This project would capture at least 95% of the carbon dioxide from one of the largest cement plants in the nation and store it in a geologic formation beneath the plant property.

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European Commission establishes €3bn hydrogen bank

The new European Hydrogen Bank will guarantee the purchase of hydrogen, with a commitment of €3bn aimed at bridging the investment gap.

President of the European Commission (EC) Ursula von Der Leyen today announced the creation of a new European Hydrogen Bank aimed at bridging the hydrogen investment gap and connecting future supply and demand.

The new European Hydrogen Bank will guarantee the purchase of hydrogen using resources from the Innovation Fund, with an investment of €3 billion to help build the future market for hydrogen, von der Leyen said during the State of the Union address.

“And hydrogen can be a game changer for Europe. We need to move our hydrogen economy from niche to scale. With REPowerEU, we have doubled our 2030 target to produce ten million tons of renewable hydrogen in the EU, each year.

“To achieve this, we must create a market maker for hydrogen, in order to bridge the investment gap and connect future supply and demand. That is why I can today announce that we will create a new European Hydrogen Bank.

“It will help guarantee the purchase of hydrogen, notably by using resources from the Innovation Fund. It will be able to invest €3bn to help building the future market for hydrogen. This is how we power the economy of the future. This is the European Green Deal,” according to a transcript of her remarks.

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US salt cavern developer selling hydrogen storage project

A US-based developer of salt cavern projects for hydrogen storage has retained a financial advisor to sell its first project and is informally seeking an equity investor.

Phoenix Hydrogen, a salt cavern storage developer based in Berkeley, California, has hired a financial advisor to run a sale of its primary project in Arizona, according to two sources familiar with the matter.

Scotiabank is leading the process, which will launch next week, the sources said. The sale is for 100% of the company’s first project near Kingman, Arizona. The project is expected to reach FID in the next 18 months.

Phoenix CEO Shawn Drost said in an interview that the company is informally seeking a platform equity investment as well but is only willing to take on a minority partner. An equity sale would need to raise an amount in the “low-tens” of millions, he said. It’s a difficult proposition, as equity providers in the space tend to demand majority positions.

The company wants to bankroll projects from beginning to end as an owner operator, he said, but requires capital to do so.

Phoenix, a six-person team, has a relationship with GHD Group for EPC, he said. The company is seeking relationships with production-side developers to sign site and storage leases.

Scotiabank did not respond to requests for comment.

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Exclusive: California IPP considering hydrogen options for gas generation portfolio

A California-based IPP is considering burning hydrogen in the thermal plants it acquires, as well as in a portfolio of gas peaking assets it is developing in Texas and the western US.

Nightpeak Energy, the Oakland-based IPP backed by Energy Spectrum Capital, is planning to have wide optionality to burn hydrogen in the gas plants it acquires, as well as in quick-start peaking natural gas assets it is developing in Texas and the western US, CEO Paris Hays said in an interview.

“There’s just not a lot of places in this country where you can procure enough hydrogen at a reasonable price to actually serve wholesale electricity customers,” Hays said of the existing hydrogen landscape.

Still, OEMs are figuring out in real time which of their deployed fleet can burn hydrogen, he said. Studies on blending seem to be yielding positive results.

“That’s great news for a business like ours, because we can have optionality,” Hays said. When interacting with equipment providers, conversion to hydrogen is an important, if expensive, discussion point.

“We want to be in a position to be able to do that for our customers,” Hays said. “We can offer a premium product, which is kind of rare in our business.”

Nightpeak recently purchased Saguaro Power Co., which owns a 90 MW combined cycle power plant in Nevada. That facility is a candidate for hydrogen repowering, Hays said, though that’s just one option for an asset that is currently cash-flowing well.

The Nevada facility is close to California, which notably is a market with a demonstrated appetite for paying green premiums, Hays said.

“We wouldn’t manufacture hydrogen ourselves, we would be a buyer,” he said. “This is one path that any plants we own or develop could take in the future.”

Nightpeak has yet to announce any greenfield projects. But Hays said the company is developing a portfolio of “quick-start” natural gas generation projects in ERCOT and WECC. Those assets, 100 MW or more, are to be developed with the concept of hydrogen conversion or blending in mind.

Proposition 7, which recently passed in Texas, could present an opportunity for Nightpeak as the legislation’s significant provisions for natural gas development has pundits and some lawmakers calling for the assets to be hydrogen-ready.

Investor interest in being able to convert gas assets to burn hydrogen reflect an important decision-making process for Nightpeak, Hays said.

“Does it makes sense to just buy a turbine that only burns natural gas and may be a stranded asset at some point, or would we rather pay and select a turbine that already has the optionality?” Hays said. “Putting price aside, you’re always going to go for optionality.”

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Ambient Fuels evaluating hydrogen project acquisitions

The company is well capitalized following a $250m equity investment from Generate Capital and is now opportunistically reviewing an initial slate of project M&A offerings.

Following an equity investment from Generate Capital, Ambient Fuels has begun to evaluate potential acquisitions of hydrogen projects that are under development, CEO Jacob Susman said in an interview.

“We’ve seen our first project M&A opportunities come through in the last 10 days or so,” Susman said.

Three projects for sale involve land positions, he said. Those that appear most attractive have a clear line of site to offtake or a strong approach to renewable power supply. Two out of three are not on the Gulf Coast.

“In no instance are these brokered deals,” Susman said.

Following the $250m equity investment from Generate Capital, Ambient is capitalized for several years and has no immediate plans to seek debt or tax equity, Susman said. The transaction was done without the help of a financial advisor.

Moving forward Ambient is open to JV formation with a partner that can help access offtake and renewable power, Susman said. Those points will drive future capital investment in the company and were resources that Generate brought to the table besides money.

According to ReSource‘s project tracker, Ambient is involved in at least two of the hubs that were encouraged by the DOE to submit a final application: California’s Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES), and the Port of Corpus Christi Green Hydrogen Hub.

In 2021 Ambient completed a funding round led by SJF Ventures. Several other VC funds and angel investors also participated.

In January The Hydrogen Source reported that Ambient was in exclusivity with an equity provider.

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