DOE’s $750mm hydrogen grant and $2bn lithium loan

AT&T to buy carbon removal credits from 1PointFive’s STRATOS project

• 1PointFive and AT&T announce agreement for AT&T to purchase carbon dioxide removal (CDR) credits from STRATOS, 1PointFive’s large-scale Direct Air Capture (DAC) facility under construction in Texas.

• STRATOS designed to capture up to 500,000 metric tons of CO2 annually, aiming to be the world’s largest facility of its kind.

• AT&T’s purchase aligns with its commitment to become carbon neutral in global operations by 2035.

• Captured CO2 will be stored through durable saline sequestration.

• 1PointFive joins AT&T’s Connected Climate Initiative (CCI) to collaborate on connectivity-based solutions to reduce greenhouse gas emissions.

• CCI aims to reduce emissions by one gigaton by 2035, bringing together diverse organizations for Smart Climate Solutions utilizing AT&T connectivity.

DAC startup CarbonCapture raises $80 million Series A

• CarbonCapture Inc. closes $80 million Series A financing led by Prime Movers Lab, with strategic investments from Amazon’s Climate Pledge Fund, Aramco Ventures, and Siemens Financial Services.

• Funds to be utilized for technology development and field deployments of direct air capture (DAC) systems.

• CarbonCapture’s modular DAC systems based on patented open systems architecture aim for scalability and efficiency.

• Company has pre-sold over $26 million in carbon removal credits to major corporations like Microsoft, Alphabet, and JPMorgan Chase & Co.

• Investors highlight CarbonCapture’s progress and potential impact in decarbonizing the atmosphere.

• Amazon’s Climate Pledge Fund sees CarbonCapture’s DAC system as crucial for achieving a net-zero carbon future, complementing its existing carbon reduction efforts.

• Aramco Ventures supports CarbonCapture’s unique DAC platform.

• Siemens Financial Services collaborates with CarbonCapture to commercialize DAC in the US, leveraging expertise in digital process simulation, automation, and control solutions.

DOE announces $750 million for 52 hydrogen projects across 24 states

• The DOE announces $750 million investment in the American hydrogen industry as part of the Investing in America agenda.

• 52 projects across 24 states funded to advance clean hydrogen technology, create jobs, and reinforce global leadership.

• Funding aims to reduce costs, improve manufacturing, and support electrolysis technologies, directly creating over 1,500 jobs.

• Projects aligned with U.S. National Clean Hydrogen Strategy and Roadmap, targeting 14 gigawatts of fuel cells and 10 gigawatts of electrolyzers per year.

• Investments complement Regional Clean Hydrogen Hubs, tax incentives, and ongoing research for hydrogen production.

• Clean hydrogen crucial for reducing emissions in heavy-duty transportation, industrial processes, and energy storage.

• Projects categorized into areas like electrolyzer manufacturing, component development, and fuel cell supply chain enhancement.

• Emphasis on job creation, economic growth, and environmental sustainability.

Primergy snags $588mm in debt to build Ash Creek Solar for Microsoft

• Primergy Solar LLC secures $588 million in debt financing for the 408 MWac Ash Creek Solar project in Hill County, Texas.

• The company signs a long-term power purchase agreement (PPA) with Microsoft for the entire capacity of the plant.

• The Ash Creek Solar site is strategically located near existing fossil fuel plants and high energy demand areas.

• Once operational, the project is expected to generate enough carbon-free energy for approximately 90,000 homes annually.

• Financing includes a construction loan, tax credit transfer bridge loan, and related facilities led by MUFG Bank, Ltd. and SMBC, along with other coordinating lead arrangers.

• Ash Creek Solar was originally developed by Orion Power Generation, LLC, acquired by Primergy in 2021.

Ørsted sells stake in four US onshore wind farms to Stonepeak for $300 million

• Ørsted signs deal with Stonepeak to divest an equity stake in four US onshore wind farms, totaling 957 MW capacity.

• Transaction valued at approximately USD 300 million, with previous tax equity proceeds totaling USD 700 million, bringing total proceeds to USD 1 billion.

• Stonepeak to receive 80% of cash distributions from the projects, while Ørsted continues to operate them.

• Ørsted retains a call option for Stonepeak’s interests post-transaction.

• Deal aligns with Ørsted’s strategy of recycling capital for future renewable energy projects while retaining operational control.

• Portfolio includes wind farms in Illinois, Texas, and Kansas, with total capacity across three markets: ERCOT, MISO, and SPP.

• All projects are operational with power purchase agreements in place.

• Ørsted maintains management of the partnership and asset management services for the projects.

• Ørsted currently manages nearly 6 GW of onshore wind, solar, and battery storage projects in the US.

KKR launches $3 billion takeover of German renewable platform Encavis

• Private equity firm KKR launches a €2.8 billion ($3.06 billion) takeover offer for German electricity and energy producer Encavis.

• Offer made through Elbe Bidco, an investment vehicle owned by KKR, at €17.50 ($19.13) per Encavis share.

• Encavis shares surge by 27% in early Frankfurt trading following the announcement.

• Encavis management and supervisory boards express support for the offer after confirming talks with KKR last week.

• German family business Viessmann to invest as a shareholder in the KKR-led consortium, holding a significant minority stake.

• KKR and management board plan to delist Encavis post-closure, with management remaining onboard under new ownership.

• KKR secures 31% of Encavis shares from major shareholders, offering a 30% premium over the MDAX small cap index closing price.

• Takeover aims to bolster Encavis’s role in Europe’s green energy transition by strengthening project pipeline, expanding capacity, and market presence.

• Encavis operates 40 onshore wind farms and 190 solar farms across Europe, with activities including construction and maintenance of wind and solar parks through an Italian subsidiary.

Li-Cycle secures another $75 million from Glencore via convertible note

• Li-Cycle secures a $75 million strategic investment from Glencore, a significant player in battery materials.

• Glencore reaffirms commitment to Li-Cycle’s Spoke & Hub model and patented recycling technology.

• Agreement extends maturity, reprices market-based conditions, and adds security interest in future tranches.

• Investment complements existing partnership, following Glencore’s $200 million investment in June 2022.

• Formation of a Special Committee, engaging Moelis & Company, led to the agreement with Glencore.

• Glencore designated Li-Cycle as a preferred recycling partner, supporting a global customer base and aligns with efforts to promote sustainable circularity in battery material supply chains.

• Glencore to purchase a senior secured convertible note of $75 million, convertible into Li-Cycle common shares.

• Terms include options for cash or in-kind interest payments, with mandatory redemption provisions.

DOE to lend Lithium Americas $2.26 billion for Nevada lithium project

• U.S. Department of Energy to lend Lithium Americas up to $2.26 billion for Nevada’s Thacker Pass lithium project.

• Thacker Pass mine to become North America’s largest source of electric vehicle battery metal, supplying General Motors.

• Initial construction started in March 2023 after winning a court case against conservationists and Indigenous communities.

• Major construction expected to start after loan closure, targeting three years for completion of first phase producing 40,000 metric tons of lithium carbonate annually.

• Project cost increased to nearly $2.93 billion due to various factors including higher engineering costs and housing facility construction.

• GM’s $650 million investment last year, making it the largest shareholder, combined with DOE loan, to fund most of the first phase.

• Full capacity expected in 2028, aiming to produce 80,000 metric tons per year from a clay deposit.

• Project involves building a rail terminal 60 miles away to import sulfur and other materials necessary for lithium extraction.

• DOE loan includes an estimated $290 million of interest over three years.

• Previous DOE loan went to ioneer for Rhyolite Ridge lithium project last year.

• Shell weakens 2030 carbon emissions reduction target

• Google commits to at least $35 million of carbon removal credits in the next 12 months

• Furno raises a $6.5 million seed round

• Latest Sunya Stories podcast with Steve Trauber

• Sunya Stories podcast with Chesapeake’s Jim Grant

• Tuesday’s edition – Vertically-integrated volumes

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.