Energy Transition in Motion (Week of March 1, 2024)

Using non-potable water from existing assets at the Lost Hills Oil Field in California and solar power, Chevron Corp. said Feb. 29 it plans to develop a 5-megawatt (MW) hydrogen production project, marking the first of its kind for the company.

Located in Central Valley, the solar-to-hydrogen production facility will be designed to produce 2 tons of hydrogen per day, aiming to support a hydrogen refueling network, Chevron said. The company will use the electrolysis process, splitting water molecules into hydrogen and oxygen to produce hydrogen.

“Hydrogen can play a vital role in our journey toward a lower carbon future,” Austin Knight, vice president for hydrogen at Chevron New Energies, said in a news release. “Chevron already offers lower carbon fuels like sustainable aviation fuel, renewable diesel and others, and this project is expected to expand the portfolio of solutions Chevron could supply to the region.”

The start of commercial operations depends on factors that include supportive legislative and regulatory energy policies, final engineering design, timely permitting and obtaining the necessary materials, the company said.

Hydrogen is among the lower carbon energies Chevron is focusing on as it aims to meet lower carbon ambitions and help its customers do so as well. The company said it plans to allocate about $10 billion in capital toward lower carbon efforts through 2028.

Chevron, which currently produces about 1 million tonnes per year of hydrogen through its traditional business, also has a controlling interest in the Advanced Clean Energy Storage (ACES Delta) hydrogen and energy storage project in Delta, Utah.

ACES Delta, expected to start commercial-scale operations in mid-2025, will initially convert more than 220 MW of renewable energy into 100 metric tonnes per day of green hydrogen to be stored in two gigantic 4.5-MMbbl salt caverns. The caverns, owned and controlled by Magnum, will store hydrogen, providing long-duration energy storage that can be dispatched when needed to the grid.

Here is a look at other renewable energy news:

Energy storage

LG Energy, Honda Mark Milestone at Battery Facility

The final structural beam was erected at the new $4.4 billion electric vehicle battery facility being constructed in Ohio by joint-venture partners LG Energy and Honda, according to a Feb. 29 news release.

The facility, which will span some 2 MMsq ft, is expected to be complete by year-end 2024. LG Energy aims to begin mass production of its pouch-type lithium-ion batteries in 2025 for use at Honda’s auto plants.

“One year ago, we were breaking ground in an empty field and today we can see the finish line for this project,” said Robert Lee, CEO of the LG Energy Solution-JV, “and we want to thank everyone working at the site and the local community who have made this possible.”

The company is targeting an annual production capacity of about 40 gigawatt hours (GWh) at the facility.

Arevon Secures $1.1B in Finance Commitments for Solar Project

Renewable energy developer Arevon Energy secured $1.1 billion in financing commitments in support of its Eland 2 solar and storage project in California’s Kern County.

The Scottsdale, Arizona-based company said the 374-MW solar project with 600 MW-hours of battery energy storage, combined with the project’s first phase Eland 1, will become one of the largest solar-plus-storage installations in the U.S. Working with SOLV Energy, which serves as the project’s engineering, procurement and construction contractor, the developer is targeting completion of Eland 2 in first-quarter 2025.

The financial commitments were announced this week as the U.S. continues to ramp up solar energy use and reduce greenhouse gas emissions.

About 200 MW of electricity from Eland 2 will go to Southern California Public Power Authority as part of a long-term power purchase agreement, the release states.

“Hybrid power plants deliver a more reliable, predictable energy yield during peak electricity demand periods, which in turn enables consistent returns across our diverse, multi-gigawatt portfolio,” Arevon CEO Kevin Smith said in a statement. “The Eland projects highlight our team’s financial strength, industry expertise and thoughtful approach to fostering a sustainable energy infrastructure. We will continue to build upon this momentum, as leaders in powering the energy transition.”

A $431 million tax equity commitment was made by Wells Fargo, while Arevon obtained $654 million of debt financing, including a construction-to-term loan, a tax equity bridge loan and letter of credit facilities, Arevon said in a news release.

Other coordinating lead arrangers include BNP Paribas, CoBank, Commerzbank AG, Commonwealth Bank of Australia and National Bank of Canada, the release states. J.P. Morgan served as joint lead arranger, collateral and depositary agent.

Amis, Patel & Brewer represented Arevon as sponsor counsel. Milbank LLP served as lender counsel, while Sheppard Mullin served as tax equity counsel.

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Geothermal

Devon Energy Leads $244MM Funding Round for Fervo Energy

Geothermal company Fervo Energy raised $244 million in its latest funding round, led by Devon Energy, according to a Feb. 29 news release.

The funds will finance the geothermal company’s next phase of growth as it puts to use oil and gas technology and techniques to scale geothermal energy.

“Demand for around-the-clock clean energy has never been higher, and next-generation geothermal is uniquely positioned to meet this demand,” said Fervo CEO Tim Latimer. “Our technology is fully derisked, our pricing is already competitive and our resource pipeline is vast. This investment enables Fervo to continue to position geothermal at the heart of 24/7 carbon-free energy production.”

Devon Energy joined the funding round with investments from companies that included Mitsubishi Heavy Industries, Galvanize Climate Solutions, John Arnold, Liberty Mutual Investments, Marunouchi Innovation Partners and Mercuria, the release states.

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Hydrogen

Everfuel Delays HySynergy Startup Due to Quality Issue

Denmark-based Everfuel has pushed back the planned startup of the 20-MW HySynergy 1 electrolyzer project to the middle of second-quarter 2024 after a failed test pointed to a quality issue, the company said March 1.

“The main electrolyzer facility is ready for start-up, but the company has experienced a quality issue on high pressure fittings in the deoxidizer, which removes oxygen and moisture from the hydrogen flow as part of the electrolyser’s high-pressure auxiliary system,” Everfuel said in a news release. “This unit is part of the electrolyzer supplier delivery package.”

The deoxidizer must be approved to receive pressure equipment directive certification, the company said. The unit will be rebuilt on-site as commissioning of the project’s other high-pressure systems.

Everfuel plans to provide an update during its fourth-quarter earnings presentation March 5.

Egypt Signs 7 Green Hydrogen MOUs Worth Potential $40B

Egypt has signed seven memoranda of understanding (MOUs) with international developers in the fields of green hydrogen and renewable energy in the Suez Canal Economic Zone that could lead to a total investment worth around $40 billion over 10 years, a cabinet statement said Feb. 28.

Investment of about $12 billion is expected for a pilot phase, followed by a further $29 billion for the first phase, Planning Minister Hala al-Said said according to the statement.

Egypt has signed a series of MOUs and framework agreements for the development of green hydrogen over the past two years.

The North African nation is trying to position itself as a green hydrogen and renewable energy hub, but faces competition from other countries in North Africa and the Middle East.

EU Awards Italian Energy Groups $402MM for Green Hydrogen

The European Commission awarded financing of up to 370 million euros (US$402 million) to set up a “Green Hydrogen Valley” in Italy’s Puglia region, the energy groups involved said.

Edison, Saipem and financial group Generali’s green transition investment manager Sosteneo SGR said that the commission had included the green hydrogen initiative among its important projects of common European interest (IPCEI), unlocking European Union funds.

Green hydrogen, which is produced using renewable forms of energy, is due to replace fossil fuels in some energy-intensive industries in the EU as the bloc moves to cut carbon emissions.

The plan will provide 260 MW of solar photovoltaic (PV) generation capacity and 160 MW of electrolysis capacity to produce green hydrogen around the cities of Brindisi and Taranto, the groups said in a statement Feb. 26.

The fuel will be used in a production process known as direct reduced iron (DRI) to decarbonize the steel-making process in Italy’s largest steel plant in Taranto, and a consortium of other Italian steel mills.

Italy's grid operator Snam said in a separate statement that Brussels had also included the group’s project to renovate existing pipelines and install new ones for the hydrogen project in the southern Italian region in its IPCEI list.

Snam’s project, whose operational phase is expected in 2028, involves total investments of around 100 million euros (US$108.35 million).

RNG

Clean Fuels Opens RNG Fueling Stations in DFW

Clean Energy Fuels Corp., which produces renewable natural gas (RNG) at dairy farms, opened two RNG fueling stations in the Dallas-Fort Worth area, the company said Feb. 26.

One station is located in North Fort Worth near the Alliance and Dallas-Fort Worth International airports and the other is located in South Dallas near three major highways. The stations join Clean Energy Fuel’s network of more than 600 stations.

“The Dallas-Fort Worth area is already one of the biggest transportation hubs in the country and it is only getting bigger,” said Chad Lindholm, senior vice president of sales at Clean Energy. “These two new stations will provide heavy-duty truck fleets with the ease of fueling with RNG, which is becoming more recognized as the cleanest, most affordable and readily available alternative fuel for the transportation market.”

Solar

EDF Renewables, SCPPA Sign PPA for Bonanza Solar

Independent power producer EDF Renewables sealed a 20-year power purchase agreement with the Southern California Public Power Authority (SCPPA) for electricity generated from the Bonanza Solar and Storage project, according to a Feb. 27 news release.

The solar project, located on federal land in the southern Nevada Desert, will have a total capacity of 300 MW with a 195-MW, four-hour battery energy storage system.

“Bonanza adds to SCPPA’s current portfolio of renewable energy projects, bringing the total to over 3,000 MW that will be supplied through SCPPA to Southern California Public Power Utilities to support their transition to a carbon-free energy future,” said Michael Webster, SCPPA’s executive director.

The site is expected to start delivering electricity to SCPPA’s customers by Dec. 31, 2028, the release states.

China Solar Industry’s Record-breaking Growth to Stall in 2024

China’s solar capacity growth could slow in 2024 to 31%, a solar manufacturing association said Feb. 28, following a record 55% increase last year as the industry struggles with renewable power overcapacity and curtailment.

China has the world’s largest renewable power capacity, but its breakneck expansion has put a toll on the country’s transmission systems, forcing some plants to curb output, a condition known as curtailment.

The world’s largest producer of solar modules and other components could add 190 GW of new solar capacity in 2024 under a conservative growth estimate, down from a record-breaking 216 GW in 2023, Wang Bohua, honorary chairman of the China Photovoltaic Industry Association (CPIA) said at a conference organized by the industry group in Beijing.

Under a more optimistic scenario, the industry could build as much as 220 GW, all but flat with last year, Wang said.

CPIA’s deputy secretary Liu Yiyang said at the event that last year’s 55% growth in solar capacity had caught the industry by surprise, exceeding previous forecasts.

Wang's presentation showed that at least 38.8 GW of planned PV manufacturing capacity has been cancelled or suspended, as well as 3.2 GW of other solar components.

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Wind

BayWa Marks Completion of California’s First Coastal Wind Farm

Renewable energy developer BayWa this week celebrated the completion of its 95-megawatt Strauss Wind Farm, a project that was approximately 22 years in the making on California’s Santa Barbara coastline.

Strauss, which features 27 turbines and a camera-based AI visual system that detects birds, is the first wind energy project on the California coastline. The developer said the wind farm, formerly known as the Lompoc Wind Project, provides enough electricity to power 36,000 homes in the region.

“As a project, it is providing a lot more than just renewable energy,” BayWa Wind LLC CEO Gordan McDougall said during a virtual news conference Feb. 28. “It provides resilience to the local grid. It bolsters the local economy with tax revenues. It creates ... job opportunities for local people in a community that needs that, and it’s there for the long term. It’s going to play a pivotal role in California achieving very ambitious and very demanding climate goals.”

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Reuters and Hart Energy Staff contributed to this report.