Energy Transition in Motion (Week of Oct. 18, 2024)

Fervo Energy’s Cape Station geothermal power project in Utah has been approved by the U.S. Bureau of Land Management (BLM), lifting the amount of approved clean energy power projects on federal lands to nearly 32 gigawatts (GW).

Located in Utah’s Beaver County, Houston-based Fervo’s Project Cape will be capable of generating up to 2 GW of baseload power, which the BLM said is enough to supply more than 2 million homes, if fully developed. Fervo uses existing oil and gas technologies to harness heat and unlock geothermal energy. Its enhanced geothermal system injects water into hot rock formations belowground and extracts the heated water to generate electricity.

“The BLM is committed to supporting the responsible growth of geothermal energy on public lands,” BLM Director Tracy Stone-Manning said in a Oct. 17 release. “We need all the tools in the toolbox to reach a clean energy future, and this proposed categorical exclusion will be helpful in accelerating the process of locating new geothermal resources.”

If fully developed, Fervo’s project will span some 631 acres, including 148 acres on public lands.

The approval followed the Oct. 8 BLM Nevada geothermal lease sale, which brought in more than $7.8 million in high bids for 64 parcels covering nearly 218,000 acres. The BLM called the sale one of the most successful since 2008.

The BLM also proposed this week a new categorical exclusion to help accelerate the discovery of geothermal resources. The proposal, centered on required environmental reviews, aims to reduce permitting timelines and capital costs. It would apply to geothermal resource confirmation operations plans of up to 20 acres for drilling and other operations.

Here’s a look at other renewable energy news.

Bioenergy

Canada Awards EverGen’s GrowTEC $2MM for RNG Project

Biogas facility Grow the Energy Circle (GrowTEC) has landed up to $2 million from a Canadian regulatory agency to expand and increase production of renewable natural gas (RNG) at the facility, EverGen Infrastructure Corp. said Oct. 15.

The funding, awarded by the Agriculture and Agri-Food Canada (AAFC), will go toward Phase 2 of the Lethbridge, Alberta-facility’s anaerobic digester expansion project. By installing preprocessing and de-packaging equipment to address existing bottlenecks, EverGen said it aims to boost the facility’s production capacity to up to 120,000 gigajoules annually. Plans also include enhancing the facility’s RNG upgrading system.

“We appreciate the support from AAFC, which will allow us to significantly increase our RNG production and improve the efficiency of our GrowTEC operations,” said Mischa Zajtmann, CEO of EverGen Infrastructure. “By addressing key bottlenecks and expanding our feedstock capabilities, we are now positioned and well-equipped to replicate the success of our Fraser Valley Biogas expansion project.”

Vision RNG Secures $207MM to Convert Landfill Gas to RNG

Renewable natural gas company Vision RNG closed on an aggregate $207 million in project financing with climate investment firm HASI as the RNG company pursues a growth strategy to advance sustainable energy solutions and reducing carbon emissions.

HASI’s financing package includes a $130 million construction facility and a $77 million investment tax credit (ITC) bridge loan. The funds will be used to develop facilities to convert landfill gas into RNG from WIN Waste Innovations’ landfills and recycling services in Ohio.

“Our partnership with HASI is a major milestone for Vision RNG,” said Kevin Johnson, Vision RNG’s CFO. “This funding enables us to continue moving forward with our ambitious plans to produce more renewable natural gas, ultimately reducing greenhouse gas emissions and supporting the transition to cleaner energy sources.”

With an initial output expected to exceed 2 billion Btu of RNG annually, the projects aim to double this production within 11 years, positioning the project among the largest RNG developments in the country.

Vision RNG anticipates annual reduction of approximately 120,000 tons of fossil-based CO2.

The RNG produced will provide a cleaner alternative for end users seeking to lower their carbon footprint. The projected emissions reductions from these initiatives equate to the estimated CO2 emissions produced by over 12 million gallons of gasoline or 250,000 bbl of oil each year.

Southwest Airlines Taps Valero for SAF

Dallas-headquartered Southwest Airlines has sealed a deal with Valero Marketing and Supply Co. (Valero) to supply sustainable aviation fuel (SAF) to Chicago Midway International Airport (MDW), the airlines said Oct. 17.

Called neat SAF, the fuel is produced from waste-based feedstocks such as used cooking oil and animal tallow. Airlines willing to pay a green premium to help shrink their carbon footprint are turning to SAF, which has fewer greenhouse-gas emissions compared to conventional jet fuel.

As part of Southwest’s two-year agreement with Valero, the airlines will purchase at least 3.6 million gallons of neat SAF as early as fourth-quarter 2024, with the option to purchase up to 25 million gallons of neat SAF over the agreement’s term, according to Southwest’s news release. On a blended basis, the amount represents up to 35% of its jet fuel out of MDW based on the carrier’s usage in the last year, the company said.

US Offers Conditional Loan Guarantees Worth About $3B for Two SAF Projects

The U.S. Department of Energy (DOE) said on Oct. 16 it has approved conditional loan guarantee commitments totaling nearly $3 billion for two SAF projects.

The agency’s Loan Programs Office said the funding of up to $1.44 billion to Calumet’s unit would support the expansion of its facility in Montana. The facility will utilize vegetable oils, fats and greases to produce SAF, renewable diesel and renewable naphtha.

If finalized, the loan guarantee would fund facility expansion to produce about 315 million gallons per year of biofuels, most of which will be SAF, the agency said.

The White House aims to meet all of the U.S.’ aviation fuel demand with SAF by 2050 and to supply at least 3 billion gallons of SAF annually by 2030.

Once the Montana facility reaches full capacity, its output would represent 10% of the SAF Grand Challenge goal of 3 billion gallons annually by 2030, DOE said.

The government body also approved an up to $1.46 billion loan guarantee to renewable fuels company Gevo to help finance a cornstarch-to-jet fuel facility in Lake Preston, South Dakota.

Gevo would be the first integrated, commercial-scale facility in the U.S. to convert corn starch to SAF with carbon capture and renewable power, DOE said.

The U.S. Energy Information Administration expects domestic production of biofuels to increase by about 50% in 2024, led by rising SAF production.

Energy storage

Lyten Unveils Plans for $1B Battery Gigafactory in Nevada

Supermaterial applications company Lyten said on Oct. 15 it will invest more than $1 billion to build what it called the world’s first lithium-sulfur battery gigafactory.

The plans were announced amid continued efforts in the U.S. to increase domestic battery cell production and reduce reliance on foreign countries.

Located near Reno, Nevada, the manufacturing facility will be capable of producing up to 10 gigawatt hours of batteries annually when it reaches full scale, the California-headquartered company said. Targeting a 2027 first phase startup, the factory will produce cathode active materials (CAM) and lithium metal anodes. Lithium-sulfur battery cells will be assembled on-site in cylindrical and pouch formats.

“Today is the latest milestone in Lyten’s nine-year history,” Lyten Co-Founder and CEO Dan Cook said. “Lithium-sulfur is a leap in battery technology, delivering a high energy density, light weight battery built with abundantly available local materials and 100% U.S. manufacturing.”

Lyten’s lithium-sulfur battery doesn’t contain nickel, cobalt or manganese—which are tight in the supply chain. The company said its cells are up to 40% lighter in weight than lithium-ion batteries, and they pack a high energy density using materials that include waste product sulfur and natural gas. Sourced from natural gas, Lyten’s 3D Graphene is a key ingredient of its lithium-sulfur batteries.

The company has been manufacturing CAM and lithium metal anodes and assembling batteries at its semi-automated pilot facility in San Jose, California, since May 2023.

The 1.25 million-sq-ft Nevada facility will be located in the Reno AirLogistics Park on land owned by the Reno-Tahoe Airport Authority, according to a news release. Lyten said it is working with Dermody Properties and the Reno-Tahoe Airport Authority to finalize contractual terms to support breaking ground in early 2025.

The Reno factory is part of the company’s plans to expand in the micromobility, space, drone and defense markets in 2024 and 2025. Lyten announced in September that its lithium-sulfur battery cells were selected by the U.S. Department of Defense for demonstration aboard the International Space Station. The batteries will be tested for applications such as satellites, space suits and extravehicular activities, the company said.

GM Acquires Stake in Lithium Americas’ Thacker Pass Project

Lithium Americas said Oct. 16 it will form a joint venture (JV) with U.S. automaker GM to fund, develop and operate the Thacker Pass lithium mine project in Nevada.

As part of the agreement, GM will acquire a 38% asset-level ownership stake in Thacker Pass for $625 million in cash and letters of credit. The amount includes $430 million of direct cash funding to the JV to support the construction of Phase 1 and a $195 million letter of credit facility that can be used as collateral to support reserve account requirements under the $2.3 billion conditional DOE loan commitment announced earlier this year, according to a news release.

“Our relationship with GM has been significantly strengthened with this joint venture as we continue to pursue a mutual goal to develop a robust domestic lithium supply chain by advancing the development of Thacker Pass,” said Jonathan Evans, president and CEO of Lithium Americas. He called the JV a “win-win for GM and Lithium Americas.”

The JV transaction replaces the $330 million Tranche 2 common equity investment commitment from GM under its original investment agreement with Lithium Americas announced in January 2023.

Located in Humboldt County, Nevada, Thacker Pass Phase 1 aims to produce about 40,000 metric tons per annum (mtpa) of battery-quality lithium carbonate. The project’s Phase 2 will double capacity to 80,000 mtpa. Construction started in March 2023, and Phase 1 mechanical completion is expected in 2027.

The company said it has an offtake agreement in place with GM for 100% of production volumes from Phase 1 for 20 years, plus 38% of Phase 2 production volumes for 20 years. GM also a right of first offer on the remaining Phase 2 production volumes, Lithium Americas said.

Hydrogen

Geologic Hydrogen Startup Koloma Lands Investment from MHI

Koloma, a startup focused on geologic hydrogen, has landed Mitsubishi Heavy Industries Ltd. (MHI) as an investor, according to an Oct. 16 news release.

The Colorado-based startup is exploring and appraising assets where natural occurring hydrogen gas can be found and produced at commercial scale.

“Partnerships with industrial leaders like MHI will maximize the positive impact geologic hydrogen can have as a new clean primary energy source,” Koloma CEO Pete Johnson said. “We look forward to collaborating and innovating together to drive progress in this field and in the broader energy transition."

Hydrogen fits into MHI’s energy transition business.

“In MHI’s role as a value chain solutions provider, we are aiming to accelerate the hydrogen economy by both offering cutting-edge technologies and enabling breakthrough innovations in the hydrogen space through investments into startups,” said Takajiro Ishikawa, president and CEO of Mitsubishi Heavy Industries America.

MHI joins other Koloma backers, including Amazon’s Climate Pledge Fund, Bill Gates-founded Breakthrough Energy Ventures, Energy Impact Partners and United Airline's Sustainable Flight Fund.

Solar

AES, TotalEnergies Subsidiary Secures $861MM Loan for Solar+Storage Projects

Clean Flexible Energy, an indirect subsidiary of The AES Corp. and TotalEnergies Holdings, secured an $861.3 million loan from the U.S. government for two solar photovoltaic (PV) farms and two battery energy storage systems (BESS) in Puerto Rico.

The loans, financed through the Energy Infrastructure Reinvestment program, were announced Oct. 15 by the Department of Energy (DOE).

Together, the Project Marahu solar projects will bring about 200 megawatts (MW) of solar energy and 285 MW of stand-alone BESS capacity to the island, strengthening its electricity grid.

“President (Joe) Biden and Vice President (Kamala) Harris understand that access to reliable energy is a matter of life or death—especially in the face of climate-change fueled natural disasters that are increasing in intensity and frequency,” U.S. Secretary of Energy Jennifer M. Granholm said.

Puerto Rico’s grid has been damaged in recent years by several hurricanes, including Irma and Maria. The storms caused most of the transmission and distribution system in Puerto Rico to collapse. It led to one of longest blackouts in U.S. history, according to the DOE, and some residents were without electricity for nearly one year. More than 3,000 people died during Hurricane Maria.

The solar installations will produce about 460,000 megawatt hours of energy, which the DOE said is enough to power about 43,000 homes.

Serbia, US-South Korean Consortium Sign Solar Plants Deal

Serbia and a U.S.-South Korean consortium comprising of UTG Renewables and Hyundai Engineering & Technology have signed a deal to build six solar power plants with a total capacity of 1,000 MW, a statement from the energy and mining ministry said.

Serbian energy and mining minister Dubravka Djedovic Handanovic and the CEO of state-run power utility EPS Dusan Zivkovic signed the agreement on the Serbian side, the statement said.

The solar plants will have battery storage with a total capacity of 200 MW, the ministry said in the statement.

Serbia, a candidate to join the EU, produces two-thirds of its electricity in ailing coal power plants and is seeking to increase the share of renewable energy sources in its energy mix to cut down its carbon footprint.

Toyo Plans to Build 2-GW Solar Cell Manufacturing Plant in Ethiopia

Japan-headquartered Toyo Co. said Oct. 14 it will invest $60 million to establish a solar cell manufacturing facility in Ethiopia with an annual capacity of 2 GW.

Attracted by the country’s investment policies, tariff status and ample hydropower supply, Toyo said it signed a lease agreement for an existing facility to be modified. The company will start fitting out the 31,500-sq m facility in November as it targets a production start by the end of first-quarter 2025.

“We are thrilled to embark on this ambitious project, which will enable us to rapidly scale up solar cell production to meet the needs of our planned module facility in the United States,” said Toyo CEO Junsei Ryu. “Establishing this manufacturing plant is a key step in our strategic vision to diversify our supply chain and enhance our sourcing capabilities for solar solutions in the global market.”

The investment came after the U.S. Commerce Department imposed duties on solar imports from Cambodia, Malaysia, Thailand and Vietnam following an investigation into illegal dumping into the countries.

RELATED

J.P. Morgan, Capital One Commit $260MM to Arizona Solar Project

Wind

EDF Generates First Power at Wind Farm Off UK

EDF Renewables has generated first power from the Neart na Gaoithe (NnG) wind farm off the coast of Fife in the U.K., the company said Oct. 18.

The wind farm, when complete, will feature 54 wind turbines that will generate up to 450 MW of electricity, which EDF said is enough to power about 370,000 homes. EDF is developing the wind farm with partner ESB Group.

“This is great for the project and is a positive step in achieving the country’s net zero targets,” said Matthias Haag, project director.

NnG is scheduled for full commissioning by summer 2025.

France Plans Tender for 9.2 GW Offshore Wind Projects

France will launch tenders in the coming months for two fixed and three floating wind farms totaling 9.2 GW, the energy ministry said in a decision published on Oct 18.

The projects will be built off the coast of Fecamp, northwest France, as well as in waters off Brittany, the western Gascogne Gulf and the southern Mediterranean coast.

The new installations are part of national plans to have 45 GW by 2050, energy minister Olga Givernet told reporters during a visit to Fecamp.

BP Weighs Sale of Minority Stake in Offshore Wind Business, Sources Say

BP is considering selling a minority stake in its offshore wind business, according to four sources with knowledge of the matter, the latest effort by CEO Murray Auchincloss to scale back the energy company’s focus on renewables.

The company has faced pressure from shareholders over its energy transition strategy, first launched in 2020, as renewables profit thinned while margins from oil and gas rose.

The London-listed oil company has lined up Bank of America to find partners for the business, the sources said, speaking on a condition of anonymity because the process is private. BP wants to reduce its share of the hefty investments required to develop these projects, two of the sources said.

A spokesperson for BP declined to comment.

BP remains committed to developing its major offshore wind projects, one source said. The company has also invested in solar, biofuels and low-carbon hydrogen in recent months.

Auchincloss, who took up the job in January, has vowed to revamp the company's plans to focus on the high-margin businesses, distancing himself from predecessor Bernard Looney's strategy to rapidly expand renewables and reduce oil and gas output.

Reuters and Hart Energy Staff contributed to this report.