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Velocys completes take private

The UK-based SAF technology firm has secured $40m of new liquidity and has continued development of a SAF technology facility in Ohio following closure of a take private early this year.

Velocys, the UK-based sustainable aviation fuel technology firm and developer, has secured $40m of growth capital following a take private, according to a news release.

Carbon Direct Capital, Lightrock, GenZero and Kibo Investments all participated in the raise, which brings the company out of financial distress. ReSource reported on the take private transaction in December. Velocys said then that unless it was able to find meaningful sources of funding or strategic options, it was unlikely that the company would be able to continue past the end of 2023.

“The funds will be used to accelerate the delivery of Velocys’ proprietary technology to customer projects whilst further building its technology leadership, scaling its production and enhancing the breadth and depth of the team’s expertise,” the release states.

Velocys in October announced a new technology facility in Plain City, Ohio, to house the reactor core assembly and catalysis operations related to its production process for SAF. The company is developing two proposed SAF projects, including the Bayou Fuels project in Natchez, Mississippi with a production of 36 mgpy from woody biomass feedstock.

“Velocys has invested to scale its reactor facility in Plain City, Ohio, to ensure a stable supply of reactors for delivery to SAF project owner-operators around the world,” the release states. “Velocys’ 52,500 square foot reactor facility will be able to produce an initial 12 reactors per year, which is the typical requirement for the operation of a commercial-scale SAF biorefinery.”

There are also plans to ramp up capacity of the Ohio facility as demand for SAF grows.

Henrik Wareborn will continue to lead Velocys’ management team as the CEO.

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FuelCell Energy secures $87m project financing

Investec led the financing effort, with proceeds used to repay existing indebtedness and potentially to accelerate commercialization of fuel cell technologies.

FuelCell Energy has entered into an $87m non-recourse project financing facility. In addition to diversifying the company’s access to capital, the proceeds from this facility were used to repay some of the company’s existing indebtedness and may be used to accelerate commercialization of its hydrogen fuel cell technologies, strategic initiatives, and for other general corporate purposes.

The multi-bank term facility includes Investec Bank plc as Coordinating Lead Arranger and Sole Bookrunner, Bank of Montreal as Mandated Lead Arranger, together with Liberty Bank as Depositary Agent and Lender along with Connecticut Green Bank and Amalgamated Bank as lenders. The 7-year term financing package comprises an $80.5m term loan and a $6.5m Debt Service Reserve Letter of Credit for a portfolio of six operating assets.

“At Investec, we have led more than $10bn in energy and infrastructure project financings over the past five years and this successful closing for FuelCell Energy evidences our continued commitment to help decarbonize the U.S. economy. We believe this financing strategy is ideal for FuelCell Energy, allowing the company to diversify its capital stack as well as access term project capital to support the growth of its business and operations of its existing assets,” said Fred Petit, co-head of Investec’s North American Power & Infrastructure Group.

“This facility enables FuelCell Energy to execute a more efficient financing structure by sensibly leveraging a portfolio of long-term contracted operating assets supported by investment-grade counterparties while attracting a diverse group of lenders and bringing material incremental cash back to FuelCell Energy. We are very pleased to have participation across this expanded bank group,” said Michael Bishop, EVP and CFO of FuelCell Energy. “The 7-year term allows the Company to navigate the current volatility in the fixed income markets and secure project financing at competitive pricing. FuelCell Energy is always looking to diversify our sources of capital while partnering with world class financial institutions such as those represented in this non-recourse facility,” added Mr. Bishop.

Proceeds to the Company following repayment of existing project debt were approximately $46.1m of unrestricted cash and $14.5m of restricted cash to fund performance reserves.

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Pembina and Marubeni developing Canada-to-Japan blue ammonia project

The project will be structured as an infrastructure-style, fee-based business with investment grade counterparties and is seen as an anchor to a proposed 2,000-acre clean fuels industrial complex in Alberta.

Pembina Pipeline Corporation and Marubeni Corporation have signed an MOU to develop a blue ammonia supply chain from Western Canada to Japan and other Asian markets, according to a news release.

The facility will be on Pembina-owned lands adjacent to its Redwater Complex in the Alberta Industrial Heartland near Fort Saskatchewan, Alberta.

Initial feasibility studies have been completed and the facility has an anticipated design capacity of up to 185 kilotonnes per year of hydrogen production, which will be converted into approximately one million tonnes per year of ammonia.

The facility will include carbon capture with the potential for integrated transportation and sequestration on the proposed Alberta Carbon Grid being developed by Pembina and TC Energy.

The ammonia would be transported via rail to Canada’s WestCoast and shipped to Japan and other Asian markets.

Under the MOA, Pembina and Marubeni will focus on the preliminary Front End Engineering Design (pre-FEED), engagement with various stakeholders, including governments in Canada and Japan, and commercial activities.

The project is expected to be structured as an infrastructure-style, fee-based business with investment grade counter parties. Pre-FEED work is currently expected to be completed by early 2024.

The project could potentially serve as an anchor development to advance Pembina’s ongoing efforts to establish a new growth platform known as the Pembina Low Carbon Complex (PLCC) for energy transition technologies, sustainable fuels, and chemicals like hydrogen, ammonia and methanol.

“With over 2,000 contiguous acres of undeveloped land located in the Alberta Industrial Heartland, Pembina’s vision is to develop an industrial complex for low-carbon energy infrastructure to better enable Pembina and third parties to develop projects, while reducing costs, emissions, and risk,” the release states.

Projects within the PLCC would gain access to land, low-carbon hydrogen, clean power, natural gas and industrial gases, water, CCUS, and the construction and operation of rail assets. Within the PLCC, Pembina would lease land to third parties and provide infrastructure, logistics, and shared services to tenants.

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CAD $20m awarded to 18 Alberta hydrogen projects

The total value of the funded projects, including matching investments for project partners, is more than CAD $200m.

The Alberta Hydrogen Centre of Excellence is awarding CAD $20m to 18 projects to advance innovations in hydrogen through its first funding competition, according to a press release.

A full list of the projects can be seen here.

One of the projects is the proposed Bremner 100% Hydrogen Community in Strathcona County, Alberta. ATCO and Qualico are studying the logistics, technology requirements and other considerations involved in developing 100% pure hydrogen communities – an step toward eliminating carbon emissions produced by hot water use.

“Other successful projects in the competition will examine the safe and effective use of pipelines for hydrogen transmission,” the release states. “Another project will look at how to convert heavy-duty long-haul trucks to dual-fuel machines. In all, projects will examine everything from production, transmission, distribution, and storage, to end-uses of hydrogen.”

A total of 68 project proposals were received. The HCOE will fund up to 50 per cent of eligible costs for the successful projects, or up to 75 per cent of eligible costs for projects led by post-secondary institutions, or those with a significant Indigenous component.

The total value of the funded projects, including matching investments for project partners, is more than CAD $200m. Projects have 24 months to complete their proposed work.

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Renewable hydrogen developer in exclusivity with strategic investor

A renewable hydrogen developer based in the western US is reaching the final stages of a capital raise with an investor in exclusivity.

NovoHydrogen, the Colorado-based renewable hydrogen developer, is in exclusivity with clean energy investment platform Modern Energy, according to two sources familiar with the matter.

ReSource reported in February that GreenFront Energy Partners was advising the company on a Series A.

NovoHydrogen CEO Matt McMonagle said previously that the company has about 30 projects in development in the US, ranging from a few megawatts to hundreds of megawatts. Its most active markets are the West coast, Northeast, Appalachia, Texas and the Rocky Mountains, though the company is not geographically constrained.

The company aims to begin construction on its first projects by the end of this year, the executive had said.

NovoHydrogen declined to comment. GreenFront and Modern Energy did not respond to requests for comment.

Modern Energy, a certified B-Corporation, recently put $90m into net metered solar developer Industrial Sun along with partner EIG. In 2020 EIG committed USD 100m to Modern Energy through a debt facility to fund the development of clean energy assets.

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US hydrogen and LNG developer raising capital

A Texas-based project developer is conducting a development capital raise for a flagship LNG and green hydrogen project in the Northeast.

New Energy Development Company, a Katy, Texas-based developer with offices in Boston, Texas, is raising between $5m and $8m for an LNG liquefaction, storage and re-gasification facility with additional green hydrogen production and storage, Partner Scott Shields said in an interview.

The company is not using a financial advisor, Shields said, noting that a larger second round capital raise will likely start near the beginning of 2024.

New Energy has secured a brownfield site for a peak-shaving LNG facility in New England with 2 billion cubic feet of storage capacity and 50 MW of solar pv, Shields said. Also planned is an expandable 40 MW PEM electrolyzer line.

He declined to name the state in which the project is located, adding that the company is trying to put a strong support system and marketing plan in place before the location is made public.

The proceeds of the capital raise will go in part to hiring local lawyers and engineering and design work (pre-FEED and FEED), through to FID, Shields said. The project will be built in two phases, Phase 1 being the LNG component and Phase 2 focusing on green hydrogen.

The LNG facility will be the offtaker for the hydrogen, which will run the plant when the solar is insufficient. Through an open season process New Energy has identified five investment grade offtakers for the LNG.

Ramping capex

“We’ve been self-funding up until now,” Shields said of New Energy, which has also put capital and development resources into half-a-dozen other projects around the country.

It’s time for a ramp up in capital expenditures and New Energy is in discussions with strategic and private equity providers, Shields said, noting that the company would prefer the former. Discussions include options to fund just the flagship project, as well as platform equity.

Shields noted that he has investment banking experience and that New Energy Managing Partner Alexander “Hap” Ellis serves as chairman of Old Westbury Funds and the George and Barbara Bush Foundation.

New Energy has partnered with McDermott International to develop patented GreenER hydrogen facilities, a modular, expandable hydrogen facility that can produce 24,000 kg per day (2,760 MMBtu) of renewable hydrogen. The companies in 2021 completed engineering deliverables for multiple designs which are marketed as ideal for grid-scale blending with natural gas pipelines, blending for existing or new power generating facilities and storage injection into salt caverns and above ground storage tanks.

The company has also combined GreenER LNG and hydrogen production and storage plants into an integrated energy hub, capable of producing an additional 200,000 MMBtu of LNG.

New Energy recently hired Chico DaFonte, formerly a vice president at Liberty Utilities, a subsidiary of Algonquin Power, as executive vice president working on LNG and hydrogen projects.

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Ammonia-to-industrial heat provider raising early-stage capital

An early-stage technology provider targeting clients in hard-to-abate industries is engaging investors and financial advisors to raise a seed round, with sites on a Series A in 2025.

Captain Energy, a Houston-based provider of ammonia-to-industrial heat technology, is seeking strategic investors for an early-stage seed round with plans for an eventual Series A, co-founder and interim-CEO Kirk Coburn said in an interview.

The company is developing a single-step process that can create industrial heat from cracked ammonia up to 700 degrees Celsius with zero NOX emissions, with hydrogen as a byproduct, Coburn said. The process uses a ceramic-based tubular solid oxide fuel cell that Captain manufactures in Dundee, Scotland.

“The results from the testing are that we’re 85% efficient,” Coburn said.

He likened the company to Amogy, but serving steel, cement and chemicals instead of transportation. Getting the kind of high-quality heat those industries need in a clean way can only come from a few sources, he noted.
“Ammonia is one of the greatest ways to do it if you can crack it efficiently like we can,” he said.
Past lab

The company is “past the lab stage” and needs to develop a pilot product to showcase to customers, Coburn said. About $5m will get the company to a 100-kilogram-per-day product, up from 25 kilograms now.

“That’s not, probably, big enough for most customers, but we can stack them,” Coburn said. “At this point we need to demonstrate commercially the product… after showcasing it we want to make larger units.”

Captain is owned by three co-founders, including Coburn. They have an 18-month line of site on a “much larger” Series A, Coburn said.

Strategic investors that would be end users of the technology are of interest to the company, particularly in Asian and European markets.

“We’re not getting in the game of making ammonia,” Coburn said. “We have to buy green ammonia.”

The company’s model is at “grid-parity” in Europe now, Coburn said, pointing to Germany in particular.

“We think we’re almost at subsidy-free pricing,” he said.

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