Good Morning. This is the Sunya Scoop. The newsletter that takes energy transition news and turns it into an easy-to-read email for you.
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HYDROGEN
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H2B2 Electrolysis Technologies, a global green hydrogen platform, is set to go public on the NASDAQ via a proposed business combination with RMG Acquisition Corp. III.
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H2B2 provides integrated green hydrogen production solutions, including designing, building, owning, and operating production facilities. It also manufactures electrolyzers of varying scales.
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The green hydrogen energy market is expected to surpass 60 million tonnes globally by 2030.
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H2B2 has gained momentum with several recently awarded projects, including an 18MW green hydrogen facility in Rørvik, Norway.
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The proposed business combination is expected to be backed by a private capital raise and/or a PIPE transaction, with an equity value of $750 million ascribed to H2B2.
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The business combination and capital raise are expected to fund H2B2’s near-term project pipeline and assist in scaling its operations.
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H2B2’s stockholders will roll 100% of their equity holdings into the combined public company.
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H2B2 has a role in several strategic projects in the US, Europe, Latin America, and Asia-Pacific, and has been approved to receive up to €25 million from the European Commission for development and manufacturing.
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The California Energy Commission awarded H2B2 a grant for a green hydrogen production facility, which is expected to begin production in May 2023.
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H2B2 has also entered the Indian market via a joint venture, and has been welcomed as a strategic partner by Ecopetrol, Colombia’s leading oil company.
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The proposed transaction is unanimously approved by the boards of directors of RMG and H2B2, and is expected to close in the second half of 2023.
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Upon closing, the surviving corporation will be named “H2B2 Electrolysis Technologies, Inc.” and its shares are expected to be listed on the Nasdaq Capital Market.
CARBON CAPTURE
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The Danish Energy Agency has awarded a 20-year contract to Ørsted for its carbon capture and storage (CCS) project, ‘Ørsted Kalundborg Hub’.
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The project involves establishing carbon capture at the Asnæs Power Station in Kalundborg and the Avedøre Power Station in the Greater Copenhagen area.
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Starting in 2026, the project aims to capture and store 430,000 tonnes of biogenic CO2 annually.
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Ørsted is partnering with Aker Carbon Capture, who will provide carbon capture units to the power stations.
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The captured CO2 will be shipped to the Northern Lights storage reservoir in the Norwegian part of the North Sea.
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The project aims to remove CO2 from the atmosphere, creating negative emissions.
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Microsoft has agreed to purchase 2.76 million tonnes of high-quality, carbon removal over 11 years from the Asnæs Power Station.
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The carbon capture process will be integrated with the power plants, enabling district heating in Kalundborg and the Greater Copenhagen area.
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The project is expected to regenerate surplus heat for approximately 31,000 Danish households in total.
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Construction of carbon capture units at Asnæs and Avedøre combined heat and power stations is expected to begin in June 2023.
RENEWABLES
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European Union (EU) countries are set to finalize a new target to achieve 42.5% of the bloc’s energy from renewable sources by 2030, as indicated in the final version of a new law.
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This initiative is part of the EU’s broader efforts to decarbonize their economies to combat climate change and ensure energy security by developing a European green industry, reducing reliance on any single country for energy.
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The final law, which EU diplomats will review soon, solidifies a political agreement reached with the European Parliament at the end of March.
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Though the final text still requires formal approval from EU countries and the European Parliament, this step is typically a formality that approves the deal without any changes.
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The new law replaces the EU’s existing target of a 32% share of renewable energy by 2030, establishing a binding new goal of 42.5%, and suggests member states should aim for 45%.
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For the transport sector, the law would require member states to reach at least a 29% share of renewables or reduce the greenhouse gas intensity of their transport sector by at least 13%.
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EU states are required to increase renewable energy use in industry by 1.6% a year. By 2030, 42% of the hydrogen used in industrial processes must be derived from renewable energy, increasing to 60% by 2035.
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The final law allows countries to reduce their renewable fuel targets for industry by 20%, if less than 23% of their hydrogen is produced using fossil fuels in 2030. This provision supports countries using nuclear energy to displace fossil fuels from their energy mix.
POWER AND UTILITIES
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Vietnam’s Prime Minister has approved a power plan, known as PDP8, requiring $134.7 billion to develop new power plants and grids between 2021 and 2030.
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The plan is aimed at ensuring energy security for Vietnam, accounting for an anticipated annual gross domestic product growth of 7% during this period.
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By 2030, the plan envisages that half of office buildings and homes in Vietnam will be powered by rooftop solar panels.
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The country also plans to generate green energy for exports, targeting 5-10 gigawatts (GW) by 2030.
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A draft of PDP8 indicates the plan will more than double the country’s power generation capacity to 158 GW by 2030, up from 69 GW at the end of 2020.
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By 2030, power plants using domestic gas and imported liquefied natural gas (LNG) will be the main source of the country’s power generation, accounting for 23.6% (or 37.33 GW) of the total.
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Coal will account for 19% of the energy mix by 2030, followed by hydropower (18.5%), wind energy (17.6%), and solar power (13%).
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The draft plan also indicates that Vietnam aims to stop using coal for power generation by 2050.
POWER AND UTILITIES
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Activist investor Elliott Investment Management LP is advocating for significant changes at NRG Energy, a U.S. power company.
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This is the second time in six years that Elliott has taken a position in NRG and is pushing for reform.
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Elliott wants NRG to appoint five new independent board members and to reverse its recent acquisition of home security firm Vivint Smart Home Inc.
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Elliott disclosed a more than 13% economic interest in NRG, valued at approximately $1 billion.
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Upon news of Elliott’s involvement, NRG’s shares initially rose by 4.5%, before settling at a 3% increase.
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Elliott is urging NRG to implement $500 million worth of cost cuts and to conduct a strategic review to help the company refocus on its core business of supplying power.
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Elliott also suggests selling NRG’s home services unit, including Vivint, which was acquired in a $2.8 billion cash deal completed in March.
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Elliott’s recommendations, along with a new capital allocation framework to return at least 80% of free cash flow to shareholders, could create over $5 billion of shareholder value and potentially raise NRG’s stock price above $55 in the next 18 months.
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In 2017, Elliott and NRG reached a settlement agreement that resulted in the appointment of two board members and a revised business plan for NRG which included asset sales and debt reduction.
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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.