Energy Transition in Motion (Week of April 5, 2024)

The U.S. Environmental Protection Agency (EPA) is doling out $20 billion in grants to finance thousands of clean energy and climate projects, calling on selected organizations to distribute the federal funding and mobilize private capital.

The funding is part of the $27 billion Greenhouse Gas Reduction Fund created by the Inflation Reduction Act. The grantees were announced April 4 by Vice President Kamala Harris and EPA Administrator Michael S. Regan under two competitions: three as part of the $14 billion National Clean Investment Fund and five with the $6 billion Clean Communities Investment Accelerator.

“The selectees announced today will deliver transformational investments for American communities, businesses, and families and unleash tens of thousands of clean technology projects like putting solar on small businesses, electrifying affordable housing, providing EV [electric vehicle] loans for young families, and countless others,” Regan said in a statement. “That translates to good-paying jobs, energy bill savings and cleaner air, all while delivering on President Biden’s historic agenda to combat climate change.”

The organizations will create a network to finance clean energy projects over the next seven years, aiming to cut GHG emissions by up to 40 million metric tons of CO2 equivalent per year. That’s comparable to the emissions of about 9 million passenger vehicles, according to the EPA.

More than $14 billion of the funds will go toward low-income and disadvantaged communities, according to a news release. This includes more than $4 billion for rural communities and nearly $1.5 billion for tribal communities.

The U.S. anticipates the public dollars will encourage private investment. The government hopes the grantees will mobilize about $7 of private capital for every $1 of federal funds spent, essentially turning the $20 billion in public funds into $150 billion of public and private funds for clean energy and climate-related projects.

EPA said the selected applicants for the National Clean Investment Fund are:

• Climate United Fund ($6.97 billion award) by Calvert Impact to partner with two U.S. Treasury-certified Community Development Financial Institutions, Self-Help Ventures Fund and Community Preservation Corp.;
• The Coalition for Green Capital ($5 billion), a nonprofit that will be focused on public-private investing and leverage the existing national network of green banks; and
• Power Forward Communities ($2 billion), a nonprofit coalition formed by five housing, climate and community investment groups.

The Clean Communities Investment Accelerator selectees are:

• Opportunity Finance Network, $2.29 billion award;
• Inclusiv, $1.87 billion;
• Justice Climate Fund, $940 million;
• Appalachian Community Capital, $500 million; and
• Native CDFI Network, $400 million.

Bioenergy

Biogest Signs LOI to Develop Its First RNG Project in Canada

Colorado-based Biogest America Inc. signed a letter of intent to jointly develop and finance a renewable natural gas (RNG) project in Quebec’s Saint-Nazaire d’Acton area in Canada, the company said April 3.

Capable of producing 105,000 MMbtu, the project will be the company’s first in the country.

Produced from biogas, RNG is formed when contaminants such as CO₂, water and hydrogen sulfide are removed from methane to elevate the gas into pipeline quality. RNG, which can be used in the same ways as fossil gas, is seen as a way to help reduce methane from agricultural operations.

Biogest said it will use its PowerRing digester technology for the project.

“During fermentation, the waste is transformed into high-quality organic fertilizer that substitutes for chemical products,” Biogest said in a news release. “The new project will introduce a novel concept by integrating biochar production. This dual-purpose approach improves RNG production and contributes to sustainable organic waste management.”

Project partners include Canada’s Les Équipements Agricoles Sarrazin Ltée and engineering firm FNX-INNOV.

Delta RNG Begins Operations in Vancouver Area

Terreva Renewables and partner Village Farms International Inc. have started operations at the Delta Renewable Natural Gas production facility in British Columbia, converting landfill methane gas into RNG, according to an April 4 news release.

The facility is owned and operated by Georgia-headquartered Terreva.

“The RNG project continues our longstanding investment in the Greater Vancouver Area and is a unique opportunity to significantly reduce the harmful impact of landfill gas, while addressing the energy needs of the region,” Village Farms CEO Michael DeGiglio said.

The company said the RNG will be sold as part of a long-term contract, and its wholly owned subsidiary Village Farms Clean Energy will receive a royalty on all revenue generated from the Delta RNG facility.

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Energy storage

TotalEnergies to Develop Second Battery Storage Project in Belgium

TotalEnergies has launched a 25-megawatt (MW) battery storage project in Belgium, its second similar project in the country, the company said April 3.

The project will be located at TotalEnergies’ depot in Feluy, Belgium, and have a capacity of 150 megawatt-hours (MWh). It will include 40 Intensium Max 20 High Energy lithium-ion containers supplied by Saft, the company said.

TotalEnergies is targeting startup by the end of 2025. The latest project follows the company’s Antwerp refinery battery storage project, which has a power rating of 25 MW and a capacity of 75 MWh.

“These projects are fully in line with our integrated development strategy for electricity, not just in Belgium, but globally,” said Olivier Jouny, senior vice president of integrated power at TotalEnergies. “These technical systems also confirm the European leadership of our affiliate specialized in battery production, Saft, and its industrial-scale stationary storage know-how.”

Indian Oil, Panasonic Energy Enter Pact to Make Lithium Cells

India’s top refiner Indian Oil Corp. entered a pact with Panasonic Energy to manufacture lithium-ion cells in India, the refiner said in a March 31 release, to prepare for rising local demand.

The agreement follows an initial understanding between the two companies on lithium-ion cells in January.

Lithium-ion batteries, which power EVs and are used to store energy, are expected to play a major role in India’s goal to be a net zero emitter of greenhouse gases by 2070. The country is expected to see sales of more than 10 million EVs a year by 2030, according to an annual Economic Survey.

Tullett Prebon Launches Battery Metals Trading Desk

Tullett Prebon on April 2 launched a new desk and team to trade CME cobalt, lithium and molybdenum, all materials crucial for batteries used in EVs and energy storage, the London-based commodities broker said.

The new team will be led by London-based Jack Nathan, previously at FIS. Nathan will be supported by Po Wei in Singapore, who joins from JP Morgan, Tullett Prebon said in a release.

Cobalt volumes on the CME have been growing quickly over the last two years, while those for lithium have picked up in recent months. CME molybdenum was launched in March 2023.

“With demand for electric vehicles fluctuating, and the production of battery metals rising rapidly, clients have a growing need to manage price risk and exposure,” the broker said.

“Less well known, Molybdenum is an emerging battery metal that is predicted to play a key role in increasing batteries’ electrical power, energy storage capacity, recharging speed and stability.”

Tullett currently trades base metals such as copper, aluminum and zinc listed on the London Metal Exchange, gold, silver, platinum, palladium and rhodium.

Hydrogen

Italy’s Snam Taps Baker Hughes for Hydrogen-ready Technology

Baker Hughes  said on April 3 it has been selected by Italy-based energy infrastructure company Snam to provide turbines for compression that can run completely on natural gas and gas blends up to 10% hydrogen.

The energy technology company will provide three of its NovaLT 12 gas turbine driven compressor trains for a new gas compressor station in Sulmona, Italy. The technology helps decarbonize gas network infrastructure of Snam’s Adriatic Line project. The 425-km long, hydrogen-ready pipeline will enable the transport of energy supplies from Azerbaijan, Africa and the Eastern Mediterranean region to northern Europe, Baker Hughes said in a news release.

“Together, we are innovating and delivering critical world-firsts for the decarbonization of gas networks,” said Ganesh Ramaswamy, executive vice president of industrial and energy technology at Baker Hughes. “Our work with customers and partners is part of our commitment to developing innovative technology solutions, such as the NovaLT12, that enable the decarbonization of energy ecosystems and the creation of the hydrogen economy while continuing to support the need for an affordable and secure energy supply.”

Ballard Secures $54MM in Tax Credits for Texas Gigafactory

Ballard Power Systems has landed $54 million in investment tax credits that will go toward the buildout of a new fuel cell gigafactory in Rockwall, Texas, the company said in a news release April 1.

The funding from the U.S. Internal Revenue Service is part of the Qualifying Advanced Energy Project Tax Credit (48C), which is included in the Inflation Reduction Act. The 48C program provides 30% investment tax credits for qualifying clean energy manufacturing projects.

The funding follows the company’s award of $40 million in grants from the U.S. Department of Energy.

“This represents significant investment leverage as we plan to bring scaled, advanced manufacturing of next-generation fuel cells online in late 2027—at the same time when we expect to reach capacity constraints of our existing North American production facilities based on our forecasted growth and production volumes,” Ballard CEO Randy MacEwen said.

Called Ballard Rockwall Giga 1, the gigafactory will manufacture membrane electrode assemblies, bipolar plates, stacks and engines. Ballard said it will invest about $110 million (net of the grants and tax credits) for the facility’s first phase. The company said it anticipates making a final investment decision on the project later this year.

“We expect our Phase I investment to provide for annual production capacity of 8 million MEAs, 8 million bipolar plates, 20,000 fuel cell stacks, and 20,000 fuel cell engines per year, or the equivalent of 3 gigawatts of fuel cells,” said Ballard COO Mark Biznek. “We plan to manufacture next generation fuel cell products incorporating the benefits of our work relating to technology innovation and design changes, supply chain collaboration, and the introduction of volume production processes and advanced automation to drive down costs.”

The company also announced this week that it had received the largest order in its history. Ballard signed a long-term supply agreement with customer Solaris Bus & Coach for 1,000 hydrogen fuel cell engines for buses in Europe through 2027.

TES Raises $152MM in Latest Funding Round

Electric natural gas producer TES said it has raised €140 million ($152 million) in its third fundraising round.

The company, which combines green hydrogen with biogenic or recycled CO2 to make e-NG, said it is creating a portfolio of large-scale e-NG projects across North America, the Middle East, Australia and Europe. Investors in the latest round included Azimut Group, Fortescue, E.ON, HSBC, O.G. Energy and Zhero, TES said April 5.

“The fundraising is an important step on our journey to deliver affordable e-NG and hydrogen,” said TES CEO Marco Alverà. “This newly raised capital will be used to advance the development of our upstream and downstream e-NG projects internationally. Our sustainable business model has attracted world-class strategic and financial partners to continue executing on our projects.”

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Solar

CIP Acquires Majority Stake in Solar Company Elgin

Copenhagen Infrastructure Partners’ (CIP) flagship fund CI V has acquired a majority stake in solar company Elgin Energy as it aims to become an independent power producer, according to an April 3 news release.

“Elgin is a perfect fit for CIP’s investment strategy given its strong leadership and culture, market leading development expertise, high quality pipeline of scale and significant growth potential in markets with attractive fundamentals,” Nischal Agarwal, partner in the CIP Flagship investment team. “We are well placed to support Elgin in transforming into an IPP with our expertise in procurement and construction.”

CIP said it plans to invest £250 million (US $316 million) into the Elgin, combining CIP’s “industrial approach for procurement and construction with Elgin’s high-quality development portfolio.” The Ireland-based solar company has delivered nearly 2GW of ready-to-build solar PV and storage projects and has a pipeline of 15 GW, according to the release.

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Wind

US Clears 2.6-GW New England Wind Offshore Project

Avangrid Inc.’s New England Wind has become the eighth commercial-scale offshore wind project to gain approval under the Biden administration.

The U.S. Interior Department announced the project’s federal record of decision April 2. The move brings total capacity approved by the current administration to more than 10 GW.

“Today, we celebrate the incredible progress being made toward achieving our goal of 30 gigawatts of offshore wind energy capacity by 2030,” said Interior Secretary Deb Haaland. “The New England Wind project will help lower consumer costs, combat climate change, create jobs to support families and ensure economic opportunities are accessible to all communities.” 

Located south of Martha’s Vineyard off of Massachusetts, the project consists of the 791-megawatt New England Wind 1 and the 1.87-GW New England Wind 2. Combined, the projects will produce enough energy to power nearly 1 million homes and businesses in the region, according to Avangrid, and bring $8 billion in direct investment to the region.

The project is expected to lower CO₂ emissions by nearly 4 million U.S. tons, the equivalent of removing about 700,000 cars from roads each year, the company said.

Avangrid CEO Pedro Azagra called the decision a “historic step toward the future of offshore wind in the United States.”

California Grid Operator Backs Big Boost in Offshore Wind

California’s grid operator has recommended $6.1 billion of new transmission projects with most of the money to channel more electricity from offshore wind turbines to the grid as the most populous U.S. state races to meet clean energy targets.

State utility regulators have projected that California needs to build more than 85 GW of clean electricity capacity by 2035 to meet its greenhouse gas reduction goals and keep up with demand.

Nineteen of the 26 projects included in the California Independent System Operator's plan would be required to ensure grid reliability amid expected increases in electricity use, as well as a broader transition to renewable resources, it said on April 3.

Three of the transmission lines included in the plan—forecast to cost $4.59 billion—would help channel electricity from floating offshore wind turbines to the state grid.

These projects “represent the first wave of development for offshore wind to meet the state’s portfolio needs…”, Neil Millar, CAISO’s vice president for infrastructure and operations planning, said in a statement.

Additionally, the plan would also support the development of more than 38 GW of solar generation, 3 GW of wind within California and 21 GW of geothermal development, according to CAISO. It would also help California import more than 5.6 GW of wind resources from Idaho, Wyoming and New Mexico.

A final version of the draft plan will be evaluated by CAISO’s board of governors in May.

Mooreast Lands Order for Floating Wind Project Offshore France

Singapore-based Mooreast Holdings on April 2 said it has been selected to provide anchors for a pre-commercial floating offshore wind project being developed by TotalEnergies and Qair, a European renewable energy company.

Eolmed, a 30-MW project, is located offshore Southern France. The mooring specialist said it has partnered with French installation contractor Bourbon Offshore to supply Mooreast’s MA5S mooring drag anchors. The 35-tonne anchors will be used to moor three floating turbines. The anchors, which Mooreast said has holding power of up to 1,210 metric tonnes, will be delivered by October 2024.

Bourbon Offshore will provide transport and installation services, according to a news release.

“Already, we are in active discussions with several project developers looking to tap into our expertise and capacity for subsea foundation production,” Mooreast CEO Sim Koon Lam said in the release. “As more floating wind farms gain traction, Mooreast can add value through its specialist solutions and products. We are establishing a manufacturing facility in Aberdeen, Scotland, in addition to our regional marketing office in the Netherlands.”

Shell Repowers Brazos Wind Farm in Texas

Shell Energy on April 4 marked the reopening of the Brazos Wind Farm, which underwent a repower and site redesign.

Located in Fluvanna, Texas, the wind farm was originally equipped with 160 1-MW turbines. The repower upgrade boosted its capacity to 182 MW with 38 next-generation Nordex 5MW turbines, Shell said in a news release. The project also included enhancing remote monitoring, data generation, and overall reliability and safety, the company said.

Shell operates the site and InfraRed Capital Investments has 60% ownership.

Con Edison, NGV Propose Offshore Wind Project for New Jersey

Con Edison Transmission and National Grid Ventures submitted a plan to carry offshore wind power to New Jersey’s electric grid as the state aims to meet renewable energy goals, according to an April 4 press release.

If awarded, the Garden State Energy Path proposal involves building transmission infrastructure that would be operational by early 2029 and deliver about 6 GW of offshore wind power, Con Edison said.

“This project is foundational to helping New Jersey reach its goal of 11 GW of offshore wind by 2040,” it said.

The New Jersey proposal’s point of landfall would be at the Sea Girt National Guard Training Center, delivering power to the Howell Township-based Larrabee Tri-Collector Station.

Since the project will be underground, the wires will be shielded from severe weather events like storms that could cause interruptions for customers, according to Con Edison.

Pre-build infrastructure, used to lower the need to separately build for each project, will house the cables carrying the power created by four wind projects to the grid under the plan.

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Reuters contributed to this report.