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Pennsylvania blue hydrogen DevCo planning project equity raise

A natural gas company has tapped an advisor and is planning to launch a process to raise project equity in the fall for a blue hydrogen production facility with contracted offtake in Pennsylvania.

KeyState Energy, a Pennsylvania-based development company, has engaged a financial advisor to launch a $60m equity process in September, according to two sources familiar with the matter.

Young America Capital is advising on the forthcoming process, the sources said.

The capital raise is for the company’s marquee Natural Gas Synthesis blue hydrogen project in Clinton County, one of the sources said. CapEx for the project is estimated at $1.5bn. OCGI is a pre-FEED investor in the project and the coming equity raise is meant to attract a FEED investor.

The 200 mtpd project has contracted offtake with Nikola Corporation, one of the sources said. In October it was reported that Nikola and KeyState were working towards a definitive agreement to expand the hydrogen supply for Nikola’s zero-emissions heavy-duty fuel cell electric vehicles.

The 7,000-acre natural gas and geologic storage site was formerly known for coal, iron and rail, according to the company’s website.

KeyState Energy did not respond to a request for comment. YAC declined to comment.

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Sustainable fuels firm raises pre-Series A

The sustainable fuels-focused climate tech company raised the funding from a global syndicate of investors.

Aether Fuels, a climate technology company, has raised $8.5m in pre-Series A financing via convertible notes.

The global syndicate includes JetBlue Ventures, the corporate venture capital (CVC) division of JetBlue, as well as TechEnergy Ventures (the CVC division of the Techint Group), Doral Energy Tech Ventures (the CVC division of Doral Energy), Foothill Ventures, and existing investor, Xora Innovation, according to a news release.

Aether makes sustainable fuels to enable large industries like aviation and ocean shipping to achieve net zero emissions. The fuel is made from low-cost and abundant waste carbon streams, such as captured carbon dioxide, industrial waste gases, municipal solid waste, agricultural residues, and waste biomass. Aether’s novel process combines feedstock flexibility with maximum yield and slashes plant capital costs, enabling dramatically better unit economics while also meeting stringent sustainability criteria, according to the news release.

Aether will use the funds to accelerate the development and scale-up of its proprietary production technologies, expand its demo facility in Chicago, and grow the global team.

“We are grateful to our investors for their confidence in our technology approach and scalable global business strategy,” said Aether CEO Conor Madigan. “Their support caps a year of breakthroughs that validated our technology and crystallized our roadmap to commercialization. In addition, we appointed experienced sustainable fuel executives to key R&D, operations, and engineering leadership roles in the U.S. and Singapore, and started planning for manufacturing scale-up.”

Established in 2022 as a spin-out of Xora Innovation, a deep-tech early-stage investment platform of Temasek, the company maintains principal offices in the U.S. and Singapore.

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Plug Power finalizing $1.6bn DOE loan facility

Executives from liquidity-strapped Plug Power said this morning that they are in the term sheet phase for a $1.6bn loan facility from the Department of Energy. The company burned through another roughly $360m of unrestricted cash in 4Q23, and is implementing a cash management program to avoid another ‘going concern’ warning by the time it files its 10-K.

Plug Power is finalizing a $1.6bn loan facility with the Department of Energy’s Loan Programs Office, CEO Andy Marsh said on an investor update call today.

The New York-based company, which is facing a cash crunch, is in the term sheet phase for the loan facility, Marsh noted, which would help shore up its liquidity in the near term.

Marsh also announced that Plug’s Georgia facility is now operational, making it the largest PEM-based green hydrogen facility in operations in North America.

Last year Plug was on the hunt for a loan facility with Goldman Sachs as advisor, as reported by ReSource.

CFO Paul Middleton said the company has received offers for debt but not on terms that are acceptable to the company. For comparison, under the DOE loan structure, the interest rate on the loan facility will not go higher than 6.5%, the executives said.

Its cash management strategy, Middleton added, will focus on utilizing at-the-market (ATM) share offerings, reducing capex and increasing margins, including through raising product prices, and securing the DOE facility. 

In particular, Plug is focused on solving the ‘going concern’ issue with auditors by the time it files its year-end 10K filing with the Securities and Exchange Commission, including through the use of a $1bn share offering program. An ATM program allows the issuing company to raise capital through share offerings as needed.

The company has also slowed investments into projects in Texas and New York until it finds a better financing solution, the CFO said. And the achievement of operations at the Georgia facility and the expected 2024 commercial operations date for the Tennessee facility will improve efficiencies.

Overall, Plug is seeking to reduce its cash burn by 70% in 2024 compared to 2023, and is targeting positive free cash flow in the next 12 months, according to Middleton.

The company’s equity has taken a beating in recent months, but is trading up by over 20% in pre-market trading to $3.44 per share.

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Hyzon Motors appoints first COO

Hyzon Motors Inc., a global supplier of zero-emission heavy-duty fuel cell electric vehicles, has named Dr. Bappa Banerjee as its first chief operating officer.

Hyzon Motors Inc., a global supplier of zero-emission heavy-duty fuel cell electric vehicles, has named Dr. Bappa Banerjee as chief operating officer (COO), effective May 1, 2023, according to a news release.

As the company’s first COO, Banerjee will oversee Hyzon Motors’ global operations, manufacturing, engineering, commercial and end-to-end supply chain. In this role, Banerjee will lead the operations team to ensure delivery of high-quality products to customers and provide strategic direction for Hyzon’s continued growth as the company develops and delivers hydrogen-powered fuel cell vehicles throughout its markets.

“Banerjee will be a critical part of Hyzon’s leadership team as we continue working toward our mission of producing zero-emissions hydrogen fuel cell powered commercial vehicles,” said Hyzon CEO Parker Meeks. “His experience includes a rare combination of driving global engineering in powertrain development and implementing world-class manufacturing and operating processes across markets. Bappa brings the industry background and leadership expertise to take Hyzon fuel cell electric trucks to production and commercialization with strong global safety and quality standards, and excellent regional execution.”

Banerjee has more than two decades of experience leading operations, engineering, and commercial functions for global companies including GE Transportation, a Wabtec Company, and Caterpillar, according to the release. Throughout his career, Banerjee has held full profit and loss responsibilities at multi-billion dollar top-line businesses, and demonstrated a proven track record of growing sales across international markets while reducing costs through the implementation of Lean Manufacturing processes.

“I have long been convinced of hydrogen’s critical role in decarbonizing transport, and Hyzon Motors is uniquely positioned at the intersection of technology and transportation, working toward a clean energy future,” said Banerjee. “The opportunity to tangibly impact our lives by reducing carbon and noise emissions for our communities excites me tremendously. I look forward to joining the talented team at Hyzon and applying my industry and operational experience to help accelerate the production of zero-emission hydrogen vehicles.”

Most recently, Banerjee served as vice president, mining equipment at GE Transportation where he led the new technology development, design, production, and sale of electric drive propulsion systems for mining equipment, including aftermarket. This included developing battery and fuel cell electric solutions, purpose-built to meet the needs of the challenging, harsh mining environment. In this role, Banerjee oversaw the sales, marketing, and supply chain localization for global growth.

Prior to his role at GE Transportation, Banerjee held progressing roles at Caterpillar in the Resource Industries Division, where he served as Worldwide Product Head of Off-Highway Trucks & Wheel Tractor Scrapers, and Facility Head for Caterpillar Remanufacturing China & Japan. Banerjee was a crucial leader in establishing a long-term strategic plan for Caterpillar Remanufacturing Services (Shanghai), developing local leadership, establishing a succession pipeline, and growing the business.

This appointment follows the appointments Hyzon has made in recent months of CEO Parker Meeks, interim Chief Financial Officer Jiajia Wu, President of International Operations John Edgley, and President of North America Pat Griffin.

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Exclusive: Methanol electrolyzer start-up gearing up for seed capital raise

An early-stage technology company seeking to commercialize an electrolyzer that produces methanol from CO2 at ambient temperature and pressure is preparing its first capital raise.

Oxylus Energy, a methanol technology and project development start-up, is preparing to kick off its first capital raise later this month.

The Yale-based firm is seeking to raise $4m in seed funding, with proceeds funding the advancement of a production-scale CO2-to-methanol electrolyzer cell and its first commercial agreements for offtake, CEO Perry Bakas said in an interview.

Oxylus aims to commercialize an electrolyzer that creates methanol from CO2 at room temperature and pressure, and also plans to develop and operate its own methanol production plants, he said.

The technology, which will scale to larger versions in coming years, recently hit a key milestone with the validation of a 5cm2 platform.

The seed capital raise would provide approximately 26 months of runway, according to Bakas. The company would then raise between $20 – $30m in a follow-on Series A in late 2026.

“What we’re gonna do with the Series A is put that first electrolyzer into the ground,” he said. “It’ll be our first revenue-producing methanol.”

Oxylus is currently owned by Bakas and his fellow co-founders. The company has been entirely grant funded to this point. DLA Piper is advising as the law firm on the seed capital raise.

“I think the most important thing about the technology is it’s the most energy-efficient pathway to making renewable methanol,” he said. “At the right energy prices, you’re below cost parity with fossil-derived methanol. When that happens, I think it’ll become a very interesting development scenario.”

Oxylus is focused on bringing the so-called green premium down to zero, Bakas said, noting that it requires achieving scale in electrolyzer production or partnering with established electrolyzer manufacturers.

Methanol for shipping

Oxylus will seek to introduce its technology into target markets that are already using methanol as a feedstock, like high-value petrochemicals. In the longer term, shipping and aviation are likely to become attractive markets. Taken together, the company believes methanol has the potential to decarbonize 11% of global emissions.

Methanol will compete with ammonia for primacy as a shipping fuel in the future, but Bakas believes methanol is the better option.

“These are massive markets – they need a lot of solutions, and quickly,” he said. “But ammonia is not energy dense, and it doesn’t integrate with existing infrastructure.”

The International Energy Agency recently projected that while ammonia will be cheaper to make, methanol is easier to handle, resulting in roughly similar cost profiles for e-methanol and green ammonia. The added cost for methanol production, the report found, is likely to come from a scarcity of biogenic CO2.

On that topic, Bakas acknowledged that the methanol pathway still requires combustion of carbon, but emphasized his technology’s ability to displace existing fossil fuel-based methanol production.

“The distinction we need to make is: are these virgin hydrocarbons or are they recycled hydrocarbons? If you’re just continuously pumping new CO2 out of the ground into the atmosphere, you’re gonna continue to cause climate change,” he said.

“The technologies that we are building in this suite of technologies that cover direct air capture, point source capture, carbon conversion, that whole CCUS world,” he added, “are really working to monitor and create a homeostasis in the atmospheric balance of CO2.”

Oxylus recently completed a lifecycle assessment of greenhouse gas emissions, Bakas said, finding that its fuels are expected to reduce CO2 emissions by 95% at optimal voltage compared to natural gas steam methane reforming.

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Exclusive: Advanced Ionics raising $12.5m, seeking pilot project partners

Advanced Ionics, an electrolyzer developer based in the Midwest, is approaching a close on the second tranche of its Series A and is seeking sponsors for pilot projects in Texas and elsewhere.

The company’s Symbiotic electrolyzers use steam by tapping into excess heat from industrial settings, thereby lowering electricity needs for water splitting to 35 kWh per kg, with 30 kWh per kg possible. That compares to industry averages over 50 kWh per kg.

Advanced Ionics, the Milwaukee-based electrolyzer developer, is about six weeks out from closing a second tranche of its Series A and is seeking new partnerships for pilot projects in the US, Chief Commercial Officer Ignacio Bincaz told ReSource.

Bincaz, based in Houston, is working to close the second $12.5m tranche, which is roughly the same size as the first tranche. The company has technical teams in Wisconsin but could build out those as well as commercial capabilities in Houston.
The company’s Symbiotic electrolyzers use steam by tapping into excess heat from industrial settings, thereby lowering electricity needs for water splitting to 35 kWh per kg, with 30 kWh per kg possible. That compares to industry averages over 50 kWh per kg.

“We just put together our first stack, Generation One, which are 100 square centimeters,” Bincaz said. Generation Two stacks will come later this year, but to get to Generation Three — commercial size, producing between 7 and 16 tons per day — the company will have to conduct a Series B about one year from now.

“For that, we need to hit certain benchmarks on durability of a stack,” he said. “The money will go toward scaling up and getting the data expected by investors to get us to Series B.”

Aside from equity provisions, Advanced Ionics is looking for sponsors for pilots and related studies, Bincaz said. “There’s different ways that we’re looking for collaboration.”

Between 2027 and 2028 the company expects to have commercial-size Generation Three stacks in the market.

Pilot projects

Advanced Ionics has two pilot projects in development with Repsol Foundation and Arpa-E (US Department of Energy), respectively.

The Repsol project is a Generation One development producing 1 kilogram per day, Bincaz said. The government project will be the first Generation Two project.

Another pilot is in development with a large energy company that Bincaz declined to name. The company is also exploring pilot projects with bp, which is an investor in the company.

After four or so pilot projects of ascending scale, the company will look to do its first industrial-scale project using real process heat or steam, integrated into a hydrogen-use process like ammonia manufacturing or chemical refining.

“We’re talking to companies in Asia, companies in Europe, companies in the US,” he said, specifically naming Japan and Singapore. “I’m in early conversations.”

Advanced Ionics’ first tranche Series A was led by bp ventures, with participation from Clean Energy Ventures, Mitsubishi Heavy Industries, and GVP Climate.

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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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