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Peregrine Hydrogen raises $7.8m seed round

Peregrine is developing electrolyzer technology that involves dual production of green hydrogen and chemicals.

Peregrine Hydrogen Inc, a climate technology company pioneering a dual production method for green hydrogen and valuable chemicals, today announced an oversubscribed $7.8m seed financing round.

The round is led by Bidra with participation from Builders, Gates Frontier, Presidio Ventures, RiSC Capital and Schox. Peregrine will utilize the funds to refine and scale-up their proprietary technology and expand into commodity chemical markets, according to a news release.

The funding will support technical development and hiring. Peregrine is growing its technical team based in California. The company is focusing on recruiting industry experts, high energy chemical engineers and process engineering specialists.

Peregrine, which spun out of the climate technology incubator Orca Sciences in June 2023, is developing a novel electrolyzer technology to produce clean hydrogen at cost parity with today’s SMR pathway. This breakthrough was achieved through Peregrine’s co-production technology which delivers clean hydrogen alongside valuable, industrial chemicals. Peregrine’s technology leverages proprietary chemical engineering advances and strategic integration methods to pursue commercial opportunities at scale.

Friðrik Lárusson, co-founder & CEO of Peregrine Hydrogen, commented, “The world’s hydrogen is already being co-produced, but rarely in beneficial ways. SMR produces dirty CO2 with hydrogen. Conventional water electrolysis produces hydrogen and a less valuable stream of oxygen. Peregrine’s technology co-produces clean hydrogen and valuable commodity chemicals at or below prices previously only achieved by using dirty production methods based on fossil fuels. We are grateful to our investors for joining us in this mission as we scale our technology across the large markets which can benefit from our unique approach.”

Decarbonization efforts in historically difficult to abate sectors will benefit from Peregrine’s technology. To start, Peregrine will target fertilizer applications, which is responsible for feeding roughly 50% of humanity. Peregrine’s unique co-production technology not only decarbonizes the hydrogen for ammonia production but also simplifies supply chains and provides additional strategic advantages for fertilizer producers.

“Green hydrogen production technology has been around for 100+ years but we’ve lacked the innovation to compete with pollutive, fossil-based production methods,” commented Amar Singh, head of Bidra. “Peregrine’s unique vision to produce hydrogen together with other critical chemical feedstocks will reduce the cost and complexity, thus making it scalable globally, particularly in countries like Morocco with unique advantages that enable low-cost production of hydrogen. Peregrine is a perfect fit for what we want to achieve. We are delighted to back an exceptional team with a track record of turning technical breakthroughs into commercial successes.“

Matt Shaner, co-founder and CTO of Peregrine remarked, “The world isn’t willing to pay more for clean hydrogen. That’s why we are developing the Peregrine co-production process; it makes energetic and financial sense today, without a need for subsidies.”

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NGT/NOGAT transitioning North Sea pipelines from gas to H2

The pipeline owners are the first to receive the Certificate of Fitness for the transport of green hydrogen in the North Sea.

Noordgastransport (NGT) and Northern Offshore Gas Transport (NOGAT) are the first pipeline owners to receive the Certificate of Fitness for the transport of green hydrogen through their existing pipelines in the North Sea, according to a press release.

The certificate was issued by Bureau Veritas Inspection & Certification. NGT’s 12-to-14 MW pipeline currently carries natural gas from the UK border to Uithuizen, but is now certified to carry up to 100% hydrogen.

“By making use of existing infrastructure, we are able to make the transition to green hydrogen in the North Sea more swiftly,” Hans Janssen, director at NOGAT, said in the release. “This can be pure hydrogen, but also a temporary mix of natural gas and green hydrogen.”

In 2018 DNV investigated the robustness of the pipelines’ steel, which showed that the steel is suitable and safe for hydrogen transportation. The pipelines are regularly inspected internally and externally to ensure their integrity. A major inspection is conducted every five years. The pipelines are supervised by the State Supervision of Mines. The Certificate of Appropriateness is valid until 2062.

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IRS 45V tax credit rules draft stricter than EU

A leaked draft report of pending 45V guidance from the US Treasury Department has advocates of the emerging green hydrogen industry warning of too-stringent measures.

US Treasury guidance for clean hydrogen producers to claim the top $3/kg rate of the hydrogen production tax credit could be overly onerous on the fledgling industry, according to responses to reporting on a draft in Politico and Bloomberg.

Reportedly, new rules include requirements that hydrogen be produced from newly created renewables (additionality), as well as geographic correlation and hourly time-matching requirements to qualify for the top rate.

“The proposal suggests that there will be an hourly matching requirement from 2027, making the rules stricter than those in the EU: a surprise to many, and potentially problematic in the eyes of some,” Ben Heininger, a manager at Baringa, said in a statement on LinkedIn. “This will lead to a material increase in costs, given the challenges in procuring firm 24/7 green power – a boon for storage developers no doubt.”

The increase in cost will drive the levelized cost of hydrogen higher and producers will likely have greater concerns over competitiveness for exports, Heininger said.

“If true, the Biden Administration’s proposed strategy for implementing these provisions will fail to get this new industry off the ground,” Jason Grumet, chief executive officer of the Washington-based American Clean Power Association, said in a statement yesterday. “It is surprising and disappointing that the administration would propose such a rigid approach that is at odds with decades of learning about new technology deployment.”

The 45V tax credit was originally unveiled as part of the Inflation Reduction Act and is split into four rates based on emissions intensity.

Hydrogen project developers and investors worry that stringent 45V rules will put the nascent industry on its back foot, significantly enough to kill projects by increasing the cost of green hydrogen production as the number of hours an electrolyzer can be operational is reduced and the sources of energy from which they can purchase power is limited.

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Canada’s Charbone Hydrogen appoints CFO

Charbone Hydrogen Corporation has appointed Benoit Veilleux as chief financial officer.

Charbone Hydrogen Corporation has appointed Benoit Veilleux as chief financial officer, effective 15 August.

This position was previously filled by Stéphane Dallaire, who will be promoted to executive vice president, according to a news release.

Veilleux began his professional career at KPMG LLP in 2003, where he managed and coordinated audit teams for public companies until 2010. From 2010 to 2013, he took the role of information analyst for the Autorité des marchés financiers du Québec where he was involved in the continuous disclosure review program applicable to public companies. From 2013 to 2021, he acted as finance manager of special projects, then as a corporate controller for Air Liquide Canada. In 2021, he became senior director of corporate finance at Hypertec Group where he was responsible for the company’s corporate finance and accounting departments.

“I would like to thank Stéphane for assuming the role of CFO at a critical stage of Charbone’s corporate history and look forward to his future contribution to our growth initiatives. With our inaugural financing and listing transaction behind us, I welcome the opportunity to have Benoit join our team. The unique combination of energy and finance experience that he brings will prove invaluable to Charbone, as we seize on the green hydrogen opportunity and execute on our ambitious growth plan,” said Dave B. Gagnon, CEO and chairperson of the board of Charbone.

Charbone is a Canadian green hydrogen group. The company’s strategy is to develop modular and expandable hydrogen facilities and regional hubs. With the acquisition of hydroelectric power plants in the United States and Canada, Charbone will be able to produce green dihydrogen molecules using reliable and sustainable energy in order to distinguish itself as a supplier of an ecological solution for industrial and commercial companies.

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Exclusive: Biomethane firm planning funding round

A biomethane solutions provider with projects in Europe and the US is planning a fifth round of funding to launch early next year, with a need to raise additional project debt.

Electrochaea, the US- and Europe-based biomethane developer, will go to market in 1Q24 for a new round of equity funding, with a near term need for project debt as well, two executives told ReSource.

The company, which was spun out from an incubator at The University of Chicago with offices in Denmark, has projects in Denmark, Colorado, New York and Switzerland. It is backed by Baker Hughes and, from early fundraising efforts, Munich Venture Partners, senior director Aafko Scheringa said. The former investor participated in its most recent (fourth) $40m funding round.

Electrochaea uses a patented biocatalyst that converts green hydrogen and carbon dioxide into BioCat Methane, a pipeline-grade renewable gas.

The average size of a project is roughly $25m, Scheringa said.

Funds from the next round will provide three years of working capital, CEO Mitch Hein added.

Electrochaea has not worked with a financial advisor to date, Hein said, adding that he may have need for one for new processes but has not engaged with anyone.

Scheringa said he is working to achieve commercialization on a pipeline of projects, with a 10 MWe bio-methanation plant in Denmark being farthest along with a mandatory start date before 2026.

Electrochaea has a bio-methanation reactor system in partnership with SoCalGas at the US Department of Energy’s National Renewable Energy Laboratory (NREL) Energy System Integration Facility in Golden, Colorado, though Hein said a project in New York is as advanced in its development.

Bio-methane can be burned in place of natural gas with no systems degradation issues, so gas offtakers are a natural fit for Electrochaea, Scheringa said. Cheap clean electricity paired with available CO2 is critical, so the company will look to places like Texas, Spain, Scandinavia, Quebec and the “corn states” of the US Midwest, for new projects.

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Methanol-to-hydrogen firm planning capital raise

An early-stage provider of distributed methanol-to-hydrogen solutions is planning a capital raise as it scales up.

Kaizen Clean Energy, a Houston-based methanol-to-hydrogen fuel company, is planning to raise additional capital in support of upcoming projects.

The company, which uses methanol and water to produce hydrogen with modular units, recently completed a funding round led by Balcor Companies, in which Balcor took a minority interest in Kaizen.

Additional funding in the capital raise was provided by friends and family, Kaizen co-founder and chief commercial officer Eric Smith said in an interview.

But with its sights on larger project opportunities this year, the company is already targeting an additional capital raise to support continued growth, Smith said. He declined to comment further on the capital raise and potential advisors, but noted that the company’s CFO, Craig Klaasmeyer, is a former Credit Suisse banker.

Kaizen’s methanol model utilizes a generator license from Element 1 and adds in systems to produce power or hydrogen, targeting the diesel generator market, EV charging and microgrids as well as hydrogen fueling and industrial uses.

Compared to trucking in hydrogen, the model using methanol, an abundant chemical, cuts costs by around 50%, Smith said, noting that Kaizen’s containers are at cost parity with diesel.

In addition, the Kaizen container is cleaner than alternatives, producing no nitric or sulfur oxide, according to Smith. Its carbon intensity score is 45, compared to 90 for the California electric grid and 100 for diesel generators.

Smith also touts a streamlined permitting process for Kaizen’s containerized product. The company recently received a letter of exemption for the container from a California air district due to low or no emissions. The product similarly does not require a California state permit and similarly, when off grid, no city permits are required, he added.

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Canadian renewables major eyeing hydrogen production at pumped hydro facility

Canadian power generation giant TransAlta could co-locate hydrogen production with select wind and hydroelectric facilities.

TransAlta, the Canadian power generator and wholesale marketing company, is contemplating a buildout of hydrogen production capabilities at its 320 MW Tent Mountain pumped hydro storage project in Alberta, Executive Vice President of Alberta Business Blain van Melle said in an interview.

“Our view on hydrogen is that it’s a technology that’s an option, somewhat further out in the future, particularly when it comes to power generation,” van Melle said. “If we can offer our customers maybe a power and hydrogen solution, and they’re using the hydrogen in another process, that would be something we would look at.”

In early 2022 TransAlta made a CAD 2m equity investment in Ekona Power, a methane pyrolysis company based in Vancouver. The company also committed USD $25m over four years to EIP’s Deep Decarbonization Frontier Fund 1.

That latter investment is a way to continue to learn about hydrogen and have exposure to emerging technologies, van Melle said.

The recent 50% stake acquisition in the Tent Mountain project includes the intellectual property associated with a 100 MW offsite green hydrogen electrolyzer and a 100 MW offsite wind development project.

Having hydrogen production co-located with wind and pumped hydro storage could make sense for the company in a few years, van Melle said. FID on Tent Mountain could be reached sometime in 2025 and will require the company to secure a PPA offtake and determine capital cost. Development work will take three to four years and earliest construction could begin in 2026.

The company has not had discussions with potential offtakers, van Melle said, adding that development on the pumped hydro facility needs to mature before a hydrogen component advances.

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