Energy Transition in Motion (Week of May 25, 2023): Advancing Projects, Investment

The Battery Belt in the U.S. is getting bigger, with Hyundai Motor Group and LG Energy Solution (LGES) saying May 26 they will build a $4.3 billion EV battery cell manufacturing plant in Georgia.

Located in Savannah adjacent to the Hyundai Motor Group Metaplant America under construction, the battery cell joint venture (JV) will be 50-50 owned by the two companies. Plans are to start production by year-end 2025, targeting an annual capacity of 30 gigawatt-hour (GWh)—enough to support the production of 300,000 EVs, according to Hyundai.

“Two strong leaders in the auto and battery industries have joined hands, and together we are ready to drive the EV transition in America,” LG Energy Solution (LGES) CEO Youngsoo Kwon said.

Construction is expected to begin in the second half of 2023.

EVs powered by low-emission electricity is a route being taken to decarbonize the transportation sector and decrease emissions. The Biden administration is aiming for 50% of all new vehicle sales to be electric by 2030—rolling out incentives, including in the Inflation Reduction Act (IRA), to hit the goal.

However, manufacturers must meet sourcing requirements for both the critical minerals and battery components contained in the vehicle to be eligible for a $7,500 credit.

Battery packs using cells from the new facility will be assembled by Hyundai Mobis and used in the production of Hyundai, Kia and Genesis EV models.

“The new facility will help create a stable supply of batteries in the region and allow the [Hyundai Motor] Group to respond fast to the soaring EV demand in the U.S. market,” Hyundai said.

At least $45 billion in private-sector investments have been announced across the U.S. clean vehicle and battery supply chain since the IRA was enacted, according to the U.S. Treasury Department.

The latest JV bumps the LGES battery plant count up to seven, either operating or being constructed in the U.S. It will be the second battery manufacturing JV between Hyundai Motor Group and LGES.

Here’s a look at other renewable energy news.

Biogas

TotalEnergies Buys Stake in Ductor Startup to Advance Biogas Production

TotalEnergies is gearing up for several biomethane production projects starting in the U.S. after acquiring a 20% stake in Ductor, a company behind technology that processes poultry manure and other high-nitrogen organic waste.

The partnership with the Finland-based startup was announced May 24.

TotalEnergies said Ductor’s technology will enable the company to seize new market opportunities as it strengthens its biogas segment.

“By accelerating the biogas chain, this technology contributes directly to the energy transition and to TotalEnergies' ambition of producing 20 TWh [terawatt-hour] of biogas worldwide by 2030,” Olivier Guerrini, vice president of biogas at TotalEnergies, said in a news release.

Ductor’s process involves removing nitrogen in pre-fermentation before the biogas process to avoid nitrogen inhibition in the main fermenter, the company explained on its website. “The recovered nitrogen liquid phase can be used as fertilizer,” Ductor said, while “the nitrogen-reduced slurry can be fermented in a standard anaerobic digester.”

With up to 20 projects already in the works, Ductor will work with TotalEnergies to develop their first facility in Ohio. TotalEnergies said it will market the biomethane production, while Ductor will produce biofertilizers.

“In today’s world, local energy production, food security and global warming are essential concerns for everyone,” said Ductor CEO Bernard Fenner. “Ductor’s solution for repurposing high-grade organic residues into renewable energy and sustainable fertilizer is part of the answer. The markets for organic fertilizer and biogas are expected to grow strongly in the years to come.”

Energy Storage

EnergySource Minerals Secures Contract with Ford for Geothermal Lithium

Ford Motor Co. has tapped EnergySource Minerals (ESM) for lithium hydroxide that will be produced from ESM’s Project ATLiS in Imperial Valley California.

The project, scheduled to start operations in 2025, features the company’s breakthrough ILiAD technology separating lithium from an underlying geothermal brine resource, ESM said in a news release May 22.

“We are working with promising companies such as ESM to help support our ability to scale EV production and make EVs more accessible for customers over time,” said Lisa Drake, vice president of EV Industrialization for Ford’s Model e. “The work we are doing with ESM is key to growing our access to minerals such as lithium, which is essential to Ford’s EV growth.”

Located in California’s Salton Sea, Project ATLiS is expected to produce about 20,000 metric tons per annum (mtpa) of lithium, quadrupling the current U.S. supply of domestic lithium, according to ESM. That amount is enough to build about 500,000 EVs per year.

Lyten Lands Battery Technology Investment from Stellantis

The corporate venture fund of Stellantis, the parent company of Chrysler, has invested in Lyten Inc., a materials innovation and applications company.

The automaker said May 25 it aims to accelerate the commercialization of Lyten’s 3D Graphene applications, including the company’s LytCell lithium-sulfur EV battery, lightweighting components and novel onboard sensing, for the transportation sector.

Lyten’s batteries do not use nickel, cobalt or manganese and provide an alternative to batteries that rely on traditional lithium-ion battery materials that are in critically short supply for EV manufacturing, Stellantis said.

Lyten CEO Dan Cook said the company’s Lithium-Sulfur batteries have the “potential to deliver more than twice the energy density of lithium-ion, payload-improving lightweighted vehicle composites and new modes of sensing that do not require chips, batteries or wires.”

Cook added that Lyten 3D Graphene has been independently verified to be carbon neutral at scale.

“Lyten’s Lithium-Sulfur battery has the potential to be a key ingredient in enabling mass-market EV adoption globally,” said Stellantis CEO Carlos Tavares, “and their material technology is equally well positioned to help reduce vehicle weight, which is all necessary for our industry to achieve carbon net zero goals.”

Hydrogen

Raven Waste-to-Hydrogen Project Lands Permit

Raven SR Inc.’s first organic waste-to-hydrogen project has been given the green light by local authorities in Richmond, California, the company said May 24, moving the company closer toward a construction start.

The approval of Raven’s California Environmental Quality Act permit by the Richmond City Council gives the company permission to divert organic waste from Republic Services’ West Contra Costa Sanitary Landfill to make hydrogen. The Wyoming-based company said it plans to break ground on the facility this summer after obtaining a permit from the Bay Area Air Quality Management Department.

Raven, which has received equity investments from Chevron New Energies and Hyzon Motors, plans to produce up to 2,400 mtpa of hydrogen using its non-combustion steam/CO₂ reforming process. The technology uses less energy than electrolysis and does not require freshwater, the company said.

The process will utilize up to 99 wet tons of green and food waste per day from the landfill, the company said, possibly eliminating up to 7,200 mtpa of CO₂ emissions from the landfill.

Full commercial operations are expected to start in first-quarter 2024. Raven has already lined up hydrogen offtake agreements with Chevron and Hyzon and will market the hydrogen to fueling stations.

Jurong, Mitsubishi Power to Build Sembcorp Hydrogen-ready Power Plant

Sembcorp Industries has tapped Mitsubishi Power and partner Jurong Engineering Ltd. (JEL) to engineer and build a new 600-megawatt (MW) hydrogen-ready combined cycle power plant.

As part of the engineering, procurement and construction awarded, JEL will provide the construction and balance of the plant, while Mitsubishi will supply a gas turbine, the steam turbine and other equipment, according to a May 24 news release.

Mitsubishi will also provide maintenance for the plant’s major equipment under a separate long-term service agreement.

“The development of the new power plant will improve the performance of our power generation assets on Jurong Island and pave the way for reduction of carbon emissions through hydrogen fuel blending,” Koh Chiap Khiong, CEO of Sembcorp Industries’ Singapore & Southeast Asia unit, said in the release. “We look forward to working closely with partners such as Mitsubishi Power to leverage hydrogen as a major decarbonization pathway and progress towards a sustainable future."

The plant is scheduled to go onstream by 2026.

Plug Power Lands Three Electrolyzer Deals

Plug Power Inc. has secured three 5-MW electrolyzer projects in Europe as companies in glass manufacturing, aluminum recycling and steel manufacturing look to decarbonize.

“Plug is breaking new ground with this series of industry firsts that validate our vision to scale the green hydrogen economy,” Plug CEO Andy Marsh said in a news release. “We were bold enough to design and build the industry’s first 5MW electrolyzer module, and customers are now clambering for its holistic, compact, easy-to-install features.”

Glass manufacturer Ardagh Glass Limmared AB of Sweden plans to produce 2.1 metric tons per day (mt/d) of green hydrogen by year-end, using hydroelectric power to produce hydrogen from Plug’s electrolyzer, according to a news release.

Norsk Hydro’s aluminum unit Hydro Havrand will replace natural gas with hydrogen as it builds a close-loop circular economy for its aluminum recycling plant in Hoyanger, Norway, the release stated. Plans are to produce 2.1 mt/d of green hydrogen.

Plug will deliver two 5-MW electrolyzer modules, with a production capacity of a total 4.2 mt/d, to APEX Group in Germany. The two are working together to demonstrate the feasibility of producing green steel by decarbonizing steel and mining company ArcelorMittal’s local blast furnaces.

Hyphen, Namibia Agree Next Phase of $10B Green Hydrogen Project

(Reuters) Hyphen Hydrogen Energy has agreed to a deal with the government of Namibia for the next phase of a $10 billion green hydrogen project that will export to Europe once complete, the two parties said May 24.

Hyphen, whose shareholders include Germany-headquartered Enertrag, was announced as the preferred bidder in 2021 for the project in the Namib Desert's Tsau/Khaeb National Park.

The feasibility and implementation agreement was officially set to be signed on May 26, officials said, as some community activists raised concerns over a perceived lack of transparency around the huge deal that costs as much as the country's GDP.

The plant, to be built in phases, will eventually produce 2 MMmt of green ammonia a year for regional and global markets when it reaches full-scale output, which is anticipated before 2030.

Namibia wants to harness its potential for solar and wind energy to produce green hydrogen and position itself as a renewable energy hub in Africa. But it remains to be seen whether the water-scarce country, relatively far away from key export markets, will be able to deliver a cost competitive product in an emerging global hydrogen sector, analysts said.

“Another big issue is a lack of transparency on the deal and how Hyphen was selected,” said Frederico Links, coordinator of a project that tracks public procurement at Namibia's Institute for Public Policy Research.

Rejecting any suggestion of a lack of transparency, a Hyphen spokesperson said the tender process was open to all bidders and subject to a rigorous adjudication process.

RELATED: Saudi Lines Up Partners, Financing for $8.4 Billion Hydrogen Plant

Solar

Italy's Enel to Invest More Than $1B in Oklahoma Solar Panel Factory

(Reuters) Italy’s Enel SpA said on May 22 it will invest more than $1 billion in a solar cell and panel factory in Oklahoma, seeking to capitalize on a U.S. push to build a homegrown clean energy manufacturing sector to compete with China.

The facility will be among the largest to produce solar equipment in the U.S., where most projects are built with imported panels. It is also one of the first U.S. factories to produce silicon-based solar cells on a large scale.

The investment is one of the biggest in solar manufacturing since the passage of the IRA in 2022. Facilities built with panels containing domestically-made cells may receive a lucrative IRA bonus tax credit worth 10% of a project’s cost.

Enel, which had first said last year it planned to build a U.S. solar factory, selected a site in Inola, Oklahoma, near Tulsa. It will employ 1,000 people by 2025.

The facility will produce 3 GW of solar products annually, with the first panels rolling off the line by the end of 2024. Eventually, production could double to 6 GW per year with an additional 900 jobs created, the company said.

Enel’s U.S. manufacturing arm, 3Sun USA LLC, selected the 300-acre site in Oklahoma because it has water and power utilities and a workforce in the region that can immediately support its large factory. Speed is critical for manufacturers seeking to take advantage of IRA incentives that start to phase out at the end of this decade.

RELATED: IEA: Solar to Overtake Oil Investments for First Time

Wind

Copenhagen Infrastructure Partners, Myrsky Energia Enter Wind Pact

Fund manager Copenhagen Infrastructure Partners (CIP) is teaming up with Finnish renewables developer Myrsky Energia to develop more than 1.8 GW of onshore wind power in Finland, the companies said May 24.

The partnership marks CIP’s onshore wind entry to Nordic countries.

“We believe Finland has excellent conditions for large scale onshore wind projects and a significant ambition to decarbonize by 2035 and achieve energy security,” CIP partner Nischal Agarwal said in a news release.

Finland aims to become carbon neutral by 2035, stepping up the share of renewables in power generation as well as nuclear energy in its energy mix, according to the International Energy Agency, which called the country’s targets one of the “most ambitious” in the world.

CIP said the transaction with Myrsky will put Finland on track to becoming an energy transition leader in Europe.

Focused on Finland, Myrsky has more than 5 GW of wind power and 2 GW of solar power under development, according to the release.

Salamander Signs Exclusivity Agreement for Scottish Floating Wind Lease 

The Simply Blue Group and Subsea7 JV has signed an exclusivity agreement as part of the Crown Estate Scotland’s Innovation and Targeted Oil and Gas (INTOG) leasing round, allowing it to start development work on the 100-MW Salamander floating wind project.

In a news release May 22, developers said the project will provide “an early opportunity to deliver floating offshore wind ahead of the larger-scale ScotWind buildout” and serve as a “stepping-stone to ensure local supply chains are ready.”

Turbines will be installed in water about 100 m deep.

The project, located off Scotland’s East Coast, is expected to help Scotland reach a targeted 11 GW of installed offshore wind by 2030.

Eversource Energy to Sell Stake in Offshore Wind Site to JV Partner Ørsted

(Reuters) Eversource Energy on May 25 agreed to sell its 50% stake in a wind development site off the south coast of Massachusetts to JV partner Ørsted for $625 million in cash.

The agreement to sell the lease area of about 175,000 developable acres is expected to close in the third quarter of 2023 and will require the approval of the Committee on Foreign Investment in the United States, the company said.

Eversource expects its second-quarter results to reflect an after-tax impairment charge of between $220 million and $280 million.

The company also said it was looking to advance the sale of its three jointly owned contracted offshore wind projects in North America, with a total capacity of 1,758 MW.

The Biden administration is hoping to grow U.S. offshore wind power as part of its multipronged effort to decarbonize the economy to fight climate change.

It has auctioned leases in federal waters. But most of the interest in those leases has so far come from European companies with years of experience in the offshore wind sector, which took off in Europe decades ago.

Goldman Sachs served as financial adviser to Eversource and Ropes & Gray was its legal counsel.

Reuters contributed to this report.