Energy Transition in Motion (Week of April 26, 2024)

The BlackRock and Temasek joint venture called Decarbonization Partners has marked the close of its inaugural late-stage venture capital and private equity investment fund aimed at advancing clean technology—at $1.4 billion.

The fund, which attracted more than 30 institutional investors from over 18 countries, exceeded its $1 billion fundraising target, the companies said on April 25.

“Addressing the climate crisis requires innovation at scale, as well as significant and sustained financial resources to enable that,” said Temasek CEO Dilhan Pillay. “No single entity can do it on their own.”

Allstate, BBVA, KIRKBI, Mizuho Bank Ltd., MUFG Bank Ltd. and TotalEnergies were among the investors, according to the news release.

With a fund strategy that targets attractive long-return returns and companies focused on reducing carbon emissions, Decarbonization Partners seeks out companies with derisked technologies that are ready to scale. Its focus areas include advanced mobility; bio and low-carbon products; carbon capture, storage and utilization; carbon management services; digital transformation; and next-generation energy.

Decarbonization Partners’ portfolio of companies include lithium-ion battery recycler Ascend Elements, low-carbon hydrogen producer Monolith and Carbon Direct, a carbon management services platform and software provider, among others.

Here’s a look at other renewable energy news this week.

Biofuels

TotalEnergies, Vanguard Renewables Form RNG JV in US

TotalEnergies has partnered with Vanguard Renewables, a BlackRock portfolio company, to jointly transform food waste and dairy farm manure into renewable natural gas (RNG).

The equally-owned joint venture announced on April 24 initially aims to advance 10 RNG projects into construction during the next 12 months, Massachusetts-based Vanguard said in a news release. Combined, the projects have an annual capacity of 2.5 Bcf. Construction has already started for three projects in Virginia and Wisconsin.

From there, the project pipeline could grow to about 60 with a total annual capacity of 15 Bcf.

Energy companies are pursuing RNG, which can be used the same way as fossil gas, as they look to fulfill low-carbon initiatives. RNG’s attractive carbon profile and its access to incentives that improve project economics are leading to more projects in the U.S.

TotalEnergies plans to bring its industrial expertise to the JV and provide technical support on facility design and engineering, while Vanguard will bring its experience managing feedstock supply, assets, operations and RNG sales, the release states.

Vanguard currently operates 17 organics-to-renewable energy facilities with an annual capacity of more than 1.5 Bcf of RNG, the company said. It plans to commission more than 100 RNG projects by year-end 2028.

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Energy storage

Ascend Launches Simulation Model for EV Battery Materials Plant

Ascend Elements, the company building a giant battery materials plant in Kentucky, has launched a logistics simulation of the plant working with Ernst & Young, according to an April 24 news release.

The simulation model is being run in preparation for the first-quarter 2025 startup of the 1-million-square-foot Apex 1 EV battery materials manufacturing facility.

The facility is expected to produce enough sustainable cathode precursor (pCAM) battery materials for up to 750,000 electric vehicles per year, Ascend said in the release. The company added it will also receive truckloads of recycled battery feedstock daily and ship over 450 metric tons of pCAM materials weekly.

“We had a lot of questions about traffic flow and timing that the simulation helped us understand," said Bruno Feitosa, an industrial engineer at Ascend Elements. ‘How many trucks can the site accommodate at one time? Will trucks have room to queue up onsite without creating unnecessary traffic on local roads? How long will it take to load and unload each truck? Do we need to take deliveries 24 hours a day, or can we load and unload in the daytime only? Understanding the answers to these questions is essential to plan for optimal efficiency and safety.”

EY’s U.S.-developed logistics model runs various simulations under different scenarios to help determine how to best operate the plant and manage traffic flow.

“Knowledge is power, especially for EV battery material manufacturing and recycling,” said Felipe Smolka, EY Americas automotive eMobility leader.

The facility is expected to become North America’s first sustainable pCAM manufacturing facility when it begins operations.

American Battery Technology Commissions Pilot Plant

Nevada-based American Battery Technology Co. (ABTC) has commissioned a first-of-its-kind pilot facility to manufacture battery-grade lithium hydroxide, the company said April 22.

“We have already generated thousands of liters of lithium solution from our claystone feedstock material demonstrating our selective lithium liberation technologies,” ABTC CEO Ryan Melsert said in a news release.

Completion of the lithium hydroxide pilot plant, supported by a grant from the U.S. Department of Energy, enables the company to demonstrate its technologies to access lithium as part of the Tonopah Lithium Flats Project (TLFP), the company said. It aims to produce large amounts of battery-grade lithium hydroxide for customers for qualifications and evaluation.

“Testing and validation of the lithium hydroxide from the hundreds of tonnes of claystone material processed at this plant will be performed by prospective customers such as automotive OEMs, battery manufacturers, and cathode manufacturers,” ABAT said. “Over a dozen prospective strategic customers have already toured this pilot facility in recent months, and ABTC is currently evaluating opportunities for the long-term offtake of its battery grade lithium hydroxide.”

ABTC said it intends to construct a commercial-scale 30,000 tonnes lithium hydroxide per year refinery at its TFLP property.

Hydrogen

Air Products Unveils Plans for Hydrogen Refueling Stations in Canada

Industrial gas company Air Products plans to build a network of commercial-scale hydrogen refueling stations in Canada, the company said April 23.

Designed to serve heavy-duty vehicles such municipal trucks and buses as well as light-duty hydrogen fuel cell cars, the stations will stretch from Edmonton to Calgary, Alberta.

“Each of our state-of-the-art, high-capacity, high-reliability stations will be able to fuel up to 200 heavy-duty trucks or 2,000 cars per day,” said Rachel Smith, vice president and general manager, Air Products Canada. “In Canada, hydrogen is essential to decarbonizing transportation where heavy-duty vehicles travel long distances in extreme temperatures. We are excited to be activating Canada’s first hydrogen corridor here in Alberta.”

The stations are expected to help push Western Canada closer toward its goal of putting 5,000 hydrogen- or dual-fuel vehicles on the road in five years.

Air Products operates three hydrogen production facilities in Alberta along with production and liquefaction facilities in Sarnia, Ontario. Its infrastructure also includes a 55-km hydrogen pipeline in Alberta and a 30-km pipeline network in Ontario.

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Solar

South Korean Solar Maker Hanwha Qcells to Cease Operations in China

South Korea’s Hanwha Solutions said on April 25 that its solar panel making unit Hanwha Qcells will cease its China operations as it focuses on the U.S. market.

Qcells will stop production and sales from its sole factory in China, in the region of Qidong, from end-June, Hanwha Solutions said in a regulatory filing. It has no other operations in China.

The company’s “normal business activities are not expected to be hindered” due to the move, the filing said.

The factory had annual production capacity of 2.1 gigawatts (GW) of solar cells and 2.3 GW of modules as of end-2023, and supplied parts to regions outside the United States such as South Korea, Japan and Europe, a spokesperson said.

Hanwha Qcells, which last year announced a $2.5 billion investment in solar power manufacturing in the United States, received incentives from the Biden administration’s Inflation Reduction Act (IRA) worth about 209.6 billion won ($152.56 million) in 2023, according to company data.

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Wind

Ørsted Inaugurates Largest Wind Farm in Asia-Pacific Region

Ørsted on April 25 said it has inaugurated the 900-megawatt (MW) Greater Changhua 1 and 2a offshore wind farms in Taiwan, which has become the largest operating wind farm in the Asia-Pacific region.

The wind farms, which also double Taiwan’s offshore wind capacity, are part of the Ørsted-operated 2.4-GW Greater Changhua offshore wind zone that includes Greater Changhua 2b, Greater Changhua 3 and Greater Changhua 4.

“In 2024, Ørsted has a record 7.6 GW of offshore wind projects under construction worldwide, including our next big project in Taiwan, the 920 MW Greater Changhua 2b and 4,” said Ørsted CEO Mads Nipper said. “We’re committed to creating a world that runs entirely on green energy and enabling long-term benefits to the economies and societies where we operate.”

Offshore construction of Greater Changhua 1 and 2a started in March 2021, the company said. It features 111 Siemens Gamesa SG 8.0-167 DD wind turbines.

Greater Changhua 1 is equally owned by Ørsted and Mercury Taiwan Holdings, a consortium of investment group CDPQ and Cathay PE. Greater Changhua 2a is 100% owned by Ørsted.

Octopus Energy Invests In Floating Foundation Designer Ocergy

U.S.-based Ocergy has secured an undisclosed investment from Octopus Energy’s generation arm as it looks to strengthen the global floating wind sector.

Ocergy, which has operations in France, has technologies that include a four-column semisubmersible floating platform that is designed for large wind turbines. The platform, as described by Ocergy, has a lightweight and modular design that makes transport and assembly easier and more efficient.

Octopus said its investment will help commercialize Ocergy’s technology and help it expand into new markets, according to an April 24 news release. The investment was made by Vector, the offshore wind fund Octopus launched in 2023.

“Tech and innovation are fueling the energy revolution globally, so we’re always on the hunt for game-changing solutions that accelerate progress,” said Zoisa North-Bond, CEO of Octopus Energy Generation. “Ocergy’s groundbreaking approach has the power to slash the costs of floating offshore wind – and with our investment they will get there faster, paving the way for cleaner, greener energy systems across the globe.”

Equinor Upbeat About Investor Interest in US Offshore Wind Farm

Norway’s Equinor is confident of finding an investor for its planned Empire Wind 1 offshore wind farm in New York after a new power offtake agreement improved the project’s economics, the company said April 25.

New York State authorities in February awarded the project a new conditional power purchase contract, replacing a previous deal that was no longer competitive due to rising construction costs, higher interest rates and supply chain snags.

Equinor was glad to have received the new contract, which significantly changed the economics of the project, CFO Torgrim Reitan told analysts during an earnings’ call April 15.

“2024 is the year of de-risking for the Empire Wind 1 project in New York and we are progressing,” he said.

The company plans to sell a stake as part of a so-called farm down to a new partner to reduce capital expenditure, with Reitan saying there was “a broad set of potential interested parties.”

It would mark the second farm down for Empire Wind 1 after Equinor earlier this year parted ways with its previous partner BP.

Equinor will reveal the price of its new contract with New York once it is firmly signed, with only an average for several awarded projects given in February, the CFO said. All necessary procurement contract were more or less settled for the project, however, with very little remaining exposure to inflation, he added.

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Hart Energy Staff and Reuters contributed to this report.