Energy Transition in Motion (Week of July 7, 2023)

Canada has agreed to dole out up to CA$15 billion (US$11.3 billion) in performance incentives to the Stellantis-LG Energy Solutions (LGES) joint venture (JV) in support of electric vehicle and battery projects the companies are building in Ontario.

The move, made jointly by the governments of Canada and Ontario, incentivizes the automakers to make Canada home to its projects amid competition from the U.S. The subsidies were offered as Canada aims to strengthen its auto manufacturing sector while transitioning to low-carbon energy sources.

The agreement, announced July 5, is similar to the previously announced deal with Volkswagen Group for up to CA$13 billion (US$9.8 billion) in performance incentives for a battery plant the company plans to build in North America.

“As part of the auto pact for those two deals agreed on by both governments, the federal government will provide two-thirds of funding and Ontario will provide one-third of funding, for these two projects, as a direct response to incentives offered by the U.S. government,” the Canada and Ontario governments said in a joint statement. “These performance incentives are contingent on, and proportionate to, the production and sale of batteries from each project, and should the incentives offered under the U.S. IRA [Inflation Reduction Act] be reduced or cancelled, so would the performance incentives under the agreement.”

In addition to creating jobs, the incentives will help strengthen the EV supply chain and related sectors, the governments said.

The agreement with Stellantis-LGES is contingent on the production and sell of batteries produced, commitments to production mandates in Ontario, and the establishment of an R&D facility in Ontario. The federal performance incentives are on a per unit production basis of US$35 per kilowatt-hour (kWh) for battery cells and US$10 per kWh for battery modules, the governments said.

The incentives are also tied to the IRA and could be canceled or lowered if the same happens in the U.S., the governments said.

The Stellantis-LGES JV announced last year plans to invest more than CA$5 billion (US$4.1 billion) to build a battery manufacturing plant in Windsor, Ontario, Canada. With an annual production capacity of about 45 gigawatt-hours (GWh), the plant is scheduled to begin operations in 2024.

Here is a look at other renewable energy news this week.

Biofuels

Bunge, Chevron Acquire Seed Business Chacraservicios

Chevron Corp. and agribusiness company Bunge BG have acquired Chacraservicios, an Argentina-based seed business, from the Adamant Group.

The deal, announced July 5, comes as the energy company expands its low-carbon intensity feedstocks for renewable fuels. The transaction allows Bunge and Chevron to add a new oil source to their global supply chains, Chevron said in a news release.

Chacraservicios cultivates a cover crop called Camelina sativa, a plant with a high oil content that is usually crushed and boiled to release oil. Bunge plans to provide Chacraservicios crush tolling and management services, the release stated.

Details of the transaction were not disclosed.

“Agricultural innovation is powering renewable fuels development around the world, and opportunities like this are helping Chevron expand our portfolio of affordable, reliable and lower carbon fuels,” said Natalie Merrill, senior vice president for business development with Chevron Renewable Energy Group. “Together with Bunge, Chevron’s Renewable Energy Group looks forward to working with the Chacraservicios team on meal and oil processing innovations.”

Chacraservicios, which was acquired by Adamant in 2019, has a camelina oil extraction facility in Pigue, Argentina, and a seed processing and storage plant in the town of Pergamino, according to the company’s website.

BP Ventures Commits to Low Carbon Fuel Production

BP Ventures has committed $10 million to the California-based biofuels company WasteFuel, according to a July 6 press release.

WasteFuel plans to deploy anaerobic digestion and methanol production technologies “to convert bio-based municipal and agricultural waste into lower carbon fuels such as bio-methanol,” according to the release.

The company says the process can contribute to decarbonization in hard-to-abate sectors such as the shipping industry. BP aims to establish lower-carbon alternative fuels and will aspire to use its expertise in trading to bring WasteFuel’s bio-methanol to market. BP and WasteFuel have established a memorandum of understanding for BP to offtake the produced bio-methanol and to collaborate on ways to improve and optimize lower carbon fuel production.

“WasteFuel projects will look to help with the growing volumes of global waste, whilst advancing the development of lower carbon solutions for hard-to-abate sectors,” said Gareth Burns, vice president of BP Ventures. “Achieving decarbonization in shipping will require a step-change, and biofuels have a key role to play in helping the industry to decarbonize.”

“This investment from BP Ventures is a significant milestone for WasteFuel as it will help scale the production of bio-methanol to decarbonize the shipping sector,” said Trevor Neilson, co-founder, chairman and CEO of WasteFuel. “As companies who are reliant on shipping work to reduce their greenhouse gas emissions, it is essential that we dramatically expand the availability of these fuels.”

Hydrogen

DOE Plans to Invest Up to $1B to Spur Clean Hydrogen Demand

After hydrogen players voiced concern about the lack of incentives targeting demand, the U.S. Department of Energy (DOE) responded with plans to invest up to $1 billion in subsidies to encourage the use of clean hydrogen.

The notice of intent (NOI) and request for information (RFI) announced on July 5 by the DOE comes as part of the regional Clean Hydrogen Hubs (H2Hubs) initiative, which includes up to $7 billion—funded through the Bipartisan Infrastructure Law—to establish six to 10 regional hubs across the U.S. The latest effort aims to give producers and end users in the H2Hubs market certainty to unlock private investment.

The NOI is looking for the best way to engage the private sector in driving demand—seeking potential benefits and risks, operating models, governance structures and equipped implementing partners. The DOE said it will also take into consideration dialogue from the energy industry, investment firms, nonprofit groups, non-governmental organizations and public response from the demand-side RFI issued last year.

Demand-side support for clean energy commercialization could include “direct procurement through a request for proposal or reverse auction; advanced market commitments; and guaranteed price floors,” according to the DOE’s Office of Clean Energy Demonstrations.

The demand-side support mechanism could also include pay-for-delivery contracts, offtake backstops, feasibility funding to support analysis by offtakers or other measures that strengthen demand for clean hydrogen and increase revenue certainty for H2Hubs.

Engie, Entergy Form Sustainable Power Partnership

Electricity provider Entergy Texas and Engie North America said on July 7 they have formed a partnership to explore sustainable power solutions.

“Southeast Texas has the infrastructure and workforce to play an essential role in the growing low-to-zero carbon hydrogen industry, and our collaboration with ENGIE will lead the way for significant advancements,” Entergy Texas CEO Eliecer Viamontes said in a news release.

Eric De Caluwe, managing director of flexible generation and hydrogen for ENGIE North America, added “high-energy, low-emission, locally produced hydrogen could be the next game-changing energy resource for Texas.”

Development is underway for Engie’s 350-megawatt (MW) hydrogen plant, which is Entergy Texas’ service area. The plant is scheduled to start operations by 2026.

Solar

Capital Power Taps First Solar for 1 GW of Modules

Capital Power Corp. has ordered about 1 GW of responsibly produced, ultra-low carbon thin solar modules from First Solar as the Alberta, Canada-based power generator grows its renewables portfolio, according to a July 5 news release.

“First Solar's longstanding investment in domestic supply chains ensures the use of high-quality American solar technology, including products made with significant amounts of domestically sourced content, to power our projects,” said Chris Kopecky, senior vice president and chief legal, development and commercial officer for Capital Power.

The Series 6 Plus modules are scheduled for delivery between 2026 and 2028.

With about 7.5 GW of power generation capacity at nearly 30 North American facilities, Capital Power has about 224 MW of renewable generation in Alberta and Canada in the advanced development phase among other projects.

Biden Touts Solar Investments on Enphase Energy Visit

President Joe Biden traveled to South Carolina to tout a new $60 million solar investment as the latest example that he is rebuilding the U.S. manufacturing industry.

Biden and top administration officials are fanning across the country to champion how the administration’s economic policy—dubbed by them “Bidenomics”—is reshaping the country. US voters continue to question the strength of the economy, and Biden's leadership, amid record employment and slowing inflation.

The investment by Enphase Energy Inc. is part of some $500 billion in private investment that has boosted U.S. manufacturing since he became president, Biden said.

“I’m not here to declare victory on the economy. I’m here to say we have a plan to turn it around quickly," Biden said.

The investment by Enphase will create some 1,800 new U.S. jobs, including 600 in South Carolina, between Enphase and its partner, multinational manufacturing giant Flex Ltd., according to the White House.

Enphase intends to open up six new manufacturing lines, bolstering clean-energy supply chains and helping power as many as 1 million homes per year with solar energy.

TotalEnergies Inaugurates Solar Plant at Grandpuits Refinery

TotalEnergies has commissioned a solar power plant and battery energy storage park at Grandpuits, a refinery being converted to a multi-energy, oil-free platform in France.

The 25 MW solar plant, which is the largest in France’s Ile-de-France region, includes 46,000 solar panels that together generate the equivalent electricity consumption of about 19,000 people, or 31 GWh, TotalEnergies said in a news release. The facility’s 43 MWh energy storage system is comprised of up to 22 containers of lithium-ion batteries.

The company is transforming the refinery into a zero-oil site, where biofuels will be produced and plastic waste recycled. TotalEnergies, which is targeting carbon neutrality by 2050, aims to produce sustainable aviation fuel, road biofuels and bionaptha at the biorefinery. The zero-crude Grandpuits platform is expected to start up in 2025.

ACCIONA, Amazon Expand Solar Partnership

Solar developer ACCIONA Energía and Amazon have expanded their power purchase agreement to 833 MW, up from 641 MW, according to a Jan. 5 news release.

The two companies also said that ACCIONA Energía will extend its use of Amazon Web Services’ cloud services to gain operational efficiencies and improve data access. ACCIONA is developing

business-to-business retail solutions on AWS to increase agility, performance and to improve customer experience, the release said.

“We are very glad to extend our collaboration with Amazon and help them stay on a path of powering its operations with 100% renewable energy by 2025,” said Joaquin Castillo, CEO of ACCIONA Energía North America. “Both companies are signatories of The Climate Pledge, a commitment to reach net-zero carbon by 2040. Thus, given our legacy and shared goals, we feel that we are a perfect partnering match to accelerate the energy transition.”

First Solar Lands $1B Revolving Credit Facility

U.S.-based solar panel manufacturer First Solar has entered a five-year revolving credit and guarantee facility for $1 billion.

As the U.S. and other parts of the world turn to renewables, including solar, to meet energy needs, First Solar plans to add about 8 GW of new capacity through 2026. The addition will boost its global manufacturing footprint of more than 20 GW.

“This agreement underscores First Solar’s bankability and is underpinned by the strong fundamentals that drive our business today,” First Solar CEO Mark Widmar said in the release. “We are focused on exiting this decade in a stronger position than we entered it and liquidity is a crucial differentiator that we intend to maintain. This revolving credit facility provides us the financial headroom and flexibility we need, while also balancing our ability to grow in response to demand for our technology.”

J.P. Morgan Chase Bank acted as lead arranger and administrative agent for the facility, which includes up to $250 million available for the issuance of letters of credit, according to a news release. Other participating banks include Joint Lead Arrangers Bank of America, Citibank, Credit Agricole CIB, and PNC Bank, and lenders BNP Paribas, Goldman Sachs Bank USA, HSBC Bank USA, MUFG Bank, Standard Chartered Bank and Truist Bank.

Wind

US Gives Green Light to Ocean Wind 1 Project Off NJ

Construction plans for the 1.1 GW Ocean Wind 1 project being developed by Ørsted and Public Service Enterprise Group Renewable Generation have been approved by the Bureau of Ocean Energy Management (BOEM), paving the way for the nation’s third commercial-scale wind project in federal waters.

Located offshore New Jersey, the project is estimated to produce enough clean electricity to power more than 380,000 homes, BOEM said July 5. Ocean Wind LLC, the JV company of Ørsted and PSEG, plans to construct up to 98 wind turbines and up to three offshore stations about 13 nautical miles southeast of Atlantic City.

“Ocean Wind 1 represents another significant step forward for the offshore wind industry in the United States,” BOEM Director Elizabeth Klein said in a statement. “The project’s approval demonstrates the federal government’s commitment to developing clean energy and fighting climate change and is a testament to the state of New Jersey’s leadership in supporting sustainable sources of energy and economic development for coastal communities.”

Approval of the project’s plan for construction and operations came amid U.S. efforts to develop 30 GW of offshore wind capacity by 2030. Ocean Wind 1 will become the third large-scale wind project being developed offshore, following Vineyard Wind offshore Massachusetts and South Fork Wind offshore Rhode Island and New York.

Commercial operations are scheduled to start in 2025.

RELATED: BW Ideol, ADEME Enter $43 Million Funding Agreement for Offshore Wind

Hart Energy Staff and Reuters contributed to this report.