Energy Transition in Motion (Week of Feb. 10, 2023): Advancing Projects, Investment

Billions of dollars are expected to flow into renewable energy after companies focused on hydrogen production, ammonia production and offshore wind shared news this week on large-scale projects.

Nova Scotia authorities have given EverWind Fuels Co. environmental approval to proceed with the company’s planned $6 billion green hydrogen and green ammonia project. The approval paves the way for construction to begin in first-half 2023, the company said.

Industrial gases company Linde said it plans to invest $1.8 billion to supply clean hydrogen to Dutch fertilizer giant OCI NV, the company responsible for developing what is being called the largest blue ammonia facility of its kind in Texas.

Meanwhile, work continues on other billion-dollar projects, including Dominion Energy’s $9.8 billion Virginia Offshore Wind Farm. The company said the project is on track and on budget.

Also this week, renewable energy developer and fund manager Copenhagen Infrastructure Partners said it intends to invest $8.6 billion in a large offshore wind power park in Portugal.

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

Geothermal

Deep Earth Proceeds with Plans for Geothermal Power Plant in Canada

Deep Earth Energy Production Corp. is moving forward with plans for a geothermal power generation facility in Canada, having kicked off engineering and procurement activities.

With field construction scheduled to begin in third-quarter 2023, the facility would become the company’s first geothermal project in southeast Saskatchewan, Canada. The 25-megawatt (MW) power facility will be built in two phases, starting with 5 MW that will be followed by 20 MW. Deep Earth said it has already lined up a 5-MW power purchase agreement with SaskPower.

The company plans to use its so-called “ribcage” layout for wells that will be drilled to a depth of about 3.5 km and horizontally for an additional 3 km.

“The subsurface geological reservoir model predicts that the well spacing for the first 25 MW field development will utilize only 10% of Deep’s entire subsurface lease that covers 39,568 hectares (97,775 acres),” the company said. “This large subsurface lease is anticipated to support the build-out of multiple power facilities greater than 200 MW. 25 MW is roughly equivalent to the power required to supply 25,000 households.”

While the company has already started engineering and procurement activities of long lead well and surface facilities, it plans to begin licensing and permitting for well and surface facilities in first-quarter 2023. Field work for a 3D seismic program is set for completion in March with data being used for horizontal well and expansion planning.

Plans are to start surface facility construction and drilling in fourth-quarter 2023 with first power production estimated by summer 2024, DEEP said.

Toyota Tsusho Lands Contract to Build Geothermal Plant in Kenya

Africa-focused power firm Globeleq, owned by British and Norwegian development finance institutions, has awarded Japan’s Toyota Tsusho a contract to build a 35-MW geothermal power plant in Kenya, the two companies said Feb. 9.

The plant, to be based in Menengai in Nakuru County, will add to Kenya’s installed capacity of 3,321 MW, 90% of which is from renewable sources, according to government statistics.
Construction of the project, valued at $108 million, is expected to start in the first quarter of this year and go into commercial operation in 2025, Globeleq and Toyota Tsusho said in a joint statement.

The electricity will be sold to the country's sole power distributor Kenya Power under a 25-year contract, while the geothermal steam to run the plant will be supplied by state-owned Geothermal Development Corp. for the same period, they said.

Kenya Electricity Generating Co., 70%-owned by the government, already produces 799 MW from its geothermal power plants, while energy firm Ormat Technologies produces 152 MW.

Globeleq is 70% owned by Britain's British International Investment and the rest is held by Norway’s Norfund.

Hydrogen

EverWind Fuels Gets Green Light for Hydrogen, Ammonia Project

EverWind Fuels Co. said Feb. 7 that Nova Scotia has given the company environmental approval to proceed with its planned $6 billion green hydrogen and ammonia project.

The approval paves the way for construction to begin in first-half 2023. EverWind, working with First Nations Equity Partners, Membertou, Paqtnkek (Bayside Development Corp.) and Potlotek, said the development is the first independent green hydrogen and green ammonia project in North America to receive an environmental approval.

“As a first mover in Atlantic Canada, EverWind is establishing a globally competitive clean energy hub, unlocking the immense local, national and international opportunities presented by green hydrogen and green fuels,” EverWind CEO Trent Vichie said in the release. “The Environmental Approval announced [Feb. 7] will enhance the region’s ability to create the first mover supply chains necessary to scale quickly in new markets. Furthermore, it creates the foundation of a new industry in Canada and Nova Scotia that will lead the green energy transition.”

The company said it is on track to deliver green ammonia to E.ON and Uniper by 2025.

Located in Point Tupper, Nova Scotia, the green hydrogen developer intends to convert the former oil storage facility and marine terminal it acquired from NuStar Energy in 2022 into a 1 million tonnes per annum green hydrogen and green ammonia facility.

The site, which has a deep ice-free berth, has capacity to produce more than 10 million tonnes per year of green ammonia, existing storage and logistics assets and connection to infrastructure that includes rail, road and pipelines, EverWind said.

The company said it is also applying for leases on 137,000 acres of Crown land to develop a 2-gigawatt (GW) onshore wind farm to power the second phase of the green hydrogen production facility by 2026.

Linde Plans to Invest $1.8 Billion for Clean Hydrogen Project

Industrial gases company Linde said Feb. 6 it plans to invest $1.8 billion to supply clean hydrogen to Dutch fertilizer giant OCI NV, the company responsible for developing what is being called the largest blue ammonia facility of its kind in Texas.

Headquartered in the U.K., Linde said it will integrate a new complex into its existing Gulf Coast gas infrastructure. The complex will include autothermal reforming with carbon capture, sequestering more than 1.7 million metric tons of CO₂ emissions each year, plus a large air separation plant.

“Linde’s capabilities are already enabling the transition to a low-carbon-intensity economy,” said Linde CEO Sanjiv Lamba. “Our strategy is to support decarbonization by working with off-takers like OCI to safely and reliably supply low-carbon industrial gases at scale.”

As part of a long-term agreement, Linde will supply the hydrogen to OCI, which will upgrade it to produce blue ammonia at its 1.1 million tonnes per annum facility in Beaumont, Texas. OCI broke ground on the facility in December and plans to begin operations in 2025.

Solar

Lightsource BP Brings Solar Mountain Online in Colorado

The 293-MW Sun Mountain solar project in Pueblo, Colo., has started commercial operations, operator Lightsource BP said Feb. 9 in a news release, bringing the company’s statewide operating solar assets to nearly 600 MW.

The project, a partnership with Xcel Energy and McCarthy Building Companies, represents a cumulative $500 million private investment in Colorado’s clean power infrastructure, according to the release.

Energy generated at Solar Mountain will be delivered to Xcel as part of a long-term power purchase agreement. The project is expected to provide enough energy to power more than 53,000 homes, abating more than 400,000 metric tons of greenhouse gas emissions annually. 

“This collaboration benefits the community, the state and all our customers by bringing more clean, low-cost energy to our system, while meeting our commitment to our communities as we lead the clean energy transition,” said Robert Kenney, president of Xcel Energy—Colorado.

Xcel aims to get about 80% of its electricity from renewable sources and lower its carbon emissions 85% by 2030.

Construction Starts on Fox Coulée Solar Farm in Canada

Goldbeck Solar has begun construction of the Neoen-owned 93-MW peak Fox Coulée solar farm in Alberta, Canada, according to a Feb. 6 news release.

The solar farm will be the first in Canada for the France-based renewable energy producer. Fox Coulée will be capable of producing enough energy to power more than 20,000 homes once it is complete in fourth-quarter 2024, avoiding an estimated 70,000 tonnes of CO₂ per year, the company said.

“Canada’s climate and energy policy stands out for its ambition and Neoen is looking forward to playing an active role in delivering on its targets,” Neoen CEO Xavier Barbaro said in the release. 

The farm is expected to contribute to Alberta’s target of achieving carbon neutrality by 2035.

Neoen said it intends to sell a significant part of the electricity generated via power purchase agreements, while the remainder will be sold on Alberta’s electricity market.

Enel in Exclusive Talks to Sell Stake in Solar Gigafactory

Italian energy group Enel has entered exclusive talks to sell a stake in 3Sun, its photovoltaic panel production site in Sicily, CEO Francesco Starace said Feb. 6.

According to two sources close to the matter, British solar energy specialist NextEnergy Capital is in pole position to buy a minority stake in Enel’s 3Sun giant solar panels factory.

“We will make an announcement in the coming days,” Starace said on the sidelines of an event at the facility in the eastern Sicilian city of Catania.

In a post on LinkedIn, NextEnergy Capital chief investment officer Aldo Beolchini said, “In Catania today, NextEnergy Capital is proud to support Enel Green Power in the reshoring of [the] photovoltaic supply chain.”

The British group was not available to comment on the issue.

The plant’s current production capacity of around 200 MW/year will rise to 3 GW by July 2024, making it the biggest factory in Europe, Enel said. The total investment for the factory is estimated at 600 million euros ($646.20 million), of which around 190 million will be granted by the European Union.

Solar Firm Nextracker’s Shares Soar in US Debut

Shares of solar-tracking business Nextracker Inc. soared 26% in their U.S. market debut on Feb. 8, suggesting that the IPO market was showing signs of emerging from a prolonged freeze.

Fremont, Calif.-based Nextracker, a unit of Singapore’s Flex Ltd., saw its stock open at $30.31, above the company’s upsized IPO price of $24 a share.

“It's yet another sign that the 2023 IPO market is thawing. So it's a breath of fresh air," said Matthew Kennedy, senior IPO market strategist at Renaissance Capital. "But for activity to pick up, we need to see a string of successful listings. Nextracker looks like one of them."

Since the start of the year, oilfield services firm Atlas Energy, Chinese sensor maker Hesai Group and restaurant chain Cava are among the companies that have filed for U.S. IPOs.

Within the clean energy space, DESRI Inc. and REV Renewables Inc. are in the pipeline.

Nextracker raised $638 million from 26.6 million shares in its IPO on Feb. 8, higher than its original plan of $534.9 million. Founded in 2013 by CEO Dan Shugar, Nextracker provides solar tracker and software solutions for solar power plants. It was acquired by supply chain and manufacturing solutions provider Flex in 2015.

Wind

Equinor, SSE Renewables Explore Dogger Bank Wind Farm Expansion

Norway’s Equinor and Ireland’s SSE Renewables are exploring the development of a fourth phase of the Dogger Bank Wind Farm as part of a joint partnership between the two, Equinor announced in a press release Feb. 6. 

Dogger Bank Wind Farm is an offshore wind farm with 3.6 GW capacity in development off the coast of England. It is a joint venture partnership between developer SSE Renewables (40%), operator Equinor (40%) and Vårgrønn (20%), according to Equinor’s website. 

This next phase of development, called Dogger Bank D, would add another 1.32 GW capacity and double the existing acreage of Dogger Bank, which is already in development to be the world’s largest offshore wind farm and power six million U.K. homes with phases A, B and C. Phase D would be located in the eastern zone of the Dogger Bank C lease area. 

An initial scoping report is scheduled for late March to determine where the energy generated by Dogger Bank D should be used, either as a potential grid connection or for green hydrogen production. 

Skanska Lands Construction Manager Gig for Port Project

Skanska USA has been named as construction manager for port upgrades of the South Brooklyn Marine Terminal (SBMT) as Equinor and partner BP develop the Empire Wind and Beacon Wind projects offshore New York, a Feb. 7 news release stated.

Plans are to equip SBMT to receive, store and pre-assemble key components for offshore wind turbines and serve as the operations and maintenance base for the wind farms. It will also include a substation that will power from Empire Wind 1 to the local power grid, Equinor said.

The Empire and Beacon Wind projects are designed to bring 3.3 GW of offshore wind power into New York, powering about 2 million homes, the company said.

“SBMT is at the heart of our offshore wind hub, and once completed, will become a leading port facility for offshore wind nationwide,” Molly Morris, president of Equinor Wind US. “Skanska has a long history of construction in the neighborhoods of our projects, Empire Wind and Beacon Wind. Together, we will collaborate in seeking to lower emissions from construction and bringing communities as well as minority and women owned business enterprises into the supply chain.”

The terminal could become one of the largest offshore wind hubs in the U.S. when construction is complete. Construction is scheduled to begin in 2024, the release stated.

Dominion ‘On Track’ with $9.8 Billion Virginia Offshore Wind Farm

Dominion Energy Inc. executives said on Feb. 8 that the electric utility’s $9.8 billion offshore Virginia wind farm is on track and on budget, having recently entered a critical phase of the environmental review process.

The roughly month-long crucial public comment period on the environmental impact study of the 2.6-GW project will end in February, Dominion CEO Robert Blue said on the Richmond, Va.-based company’s quarterly earnings call.

“As it relates to the project’s execution, it’s very much on track and on budget,” Blue said, adding that Dominion is working with the Bureau of Ocean Energy Management and other overseers of U.S. offshore wind development.

The wind installation designed to start 27 miles (44 km) off the Virginia Beach shores, which could provide carbon-free power to more than 650,000 homes and businesses, is slated for completion by the end of 2026.

Siemens Gamesa, Doosan Enerbility Form Offshore Wind Partnership

Doonsan Enerbility, formerly called Doosan Heavy Industries, and Siemens Gamesa have formed a strategic partnership agreement focused on South Korea’s offshore wind market, the wind engineering company said Feb. 6.

The agreement will center on sharing knowledge about offshore wind turbine nacelle assembly technology, staging harbor turbine assembly, offshore construction and offshore service contracts.

“Doosan will assemble Siemens Gamesa’s offshore wind turbine nacelles in a Doosan facility currently in the design phase, undertake turbine assembly for Siemens Gamesa machines in staging harbors as well as the offshore construction of projects using Siemens Gamesa machines and perform offshore service on selected orders involving Siemens Gamesa machines,” Siemens said, noting the partnership scope is subject to offshore wind power orders in South Korea.

The agreement lays the foundation for local content in the South Korea’s offshore wind market, the company said.

Denmark’s CIP Keen to Sink $8.6 Billon in Portugal Offshore Wind Power

Renewable energy developer and fund manager Copenhagen Infrastructure Partners (CIP) intends to invest 8 billion euros ($8.6 billion) in a large offshore wind power park in Portugal that is preparing its first auction of such concessions.

CIP said on Feb. 9 in a statement it aimed to create an installed capacity of 2 GW in a project called Nortada off central Portugal’s Atlantic coast, which would amount to 20% of the country’s 2030 target for offshore wind power.

“We intend to place Portugal at the forefront of the energy transition worldwide... Offshore wind energy has enormous potential for growth and evolution,” it said, citing “ambitions revealed by the Portuguese government” and preliminary results of discussions on the matter as the drivers of its interest.

CIP said it has more than 50 GW of offshore wind projects in its portfolio, in Europe and the United States.

Hart Energy staff and Reuters contributed to this article.