The 400 billion dollar man

HYDROGEN

Tallgrass and Korea Western Power team up for green hydrogen and ammonia

• Tallgrass and Korea Western Power (KOWEPO) have announced a cooperation agreement for the development of gigawatt-scale green hydrogen and ammonia production.

• The agreement includes a comprehensive feasibility study for green hydrogen production using renewable energy and electrolysis.

• KOWEPO plans to convert the green hydrogen to clean ammonia, utilizing Tallgrass infrastructure, to support South Korean decarbonization and global clean energy demand.

• This collaboration builds on a previous memorandum of understanding between Tallgrass, KOWEPO, and Hanwha PSM for a hydrogen co-firing gas-turbine project in the United States.

• The agreement signifies the first Korean company’s involvement in promoting green hydrogen and ammonia production in the U.S., supported by U.S. government initiatives like the Inflation Reduction Act.

• KOWEPO aims to expand Korean renewable energy capacity and increase the use of hydrogen and ammonia as co-firing fuels in its power plants to achieve carbon neutrality goals.

• Kang Se-hoon, Head of the Overseas New Business Division at Korea Western Power, emphasizes the importance of procuring clean hydrogen and ammonia from overseas to support the government’s carbon neutral goals and boost the hydrogen economy.

RENEWABLES

Duke Energy sells commercial power generation assets to ArcLight

• Duke Energy has announced plans to sell its commercial distributed generation business to private equity firm ArcLight Capital Partners in a $364 million deal.

• The business includes assets of REC Solar, a company acquired by Duke in 2015, as well as a development pipeline, operations and maintenance portfolio, and distributed fuel cell projects managed by Bloom Energy.

• Duke expects to receive about $259 million in proceeds from the sale, which will be used to support the incorporation of over 30,000 megawatts of regulated renewable energy into its system by 2035.

• The sale is part of Duke’s effort to streamline its portfolio and focus on its regulated territories.

• The deal is anticipated to close by the end of 2023.

DOE

WSJ report on Jigar Shah – DOE’s $400 billion dollar man

• Jigar Shah, head of the Energy Department’s Loan Programs Office, has $400 billion in government funds to invest in green-energy projects.

• Shah faces challenges from critical lawmakers, cautious bureaucrats, and the White House, which has clashed with him on lending politics.

• The office has received loan requests from 150 companies seeking $127.7 billion, including startups and large corporations like General Motors and PG&E.

• Shah has started approving larger loans, including a record $9.2 billion commitment to a Ford joint venture for battery production.

• The Energy Department’s Loan Programs Office aims to finance businesses important to the energy transition that can’t borrow from traditional lenders.

• The office’s funding was significantly increased by the Inflation Reduction Act, giving Shah a major role in shaping the American energy landscape.

• Shah has been actively reaching out to clean-energy startups and larger businesses to offer loans, even encouraging hesitant applicants to apply.

• The Loan Programs Office faces criticism and skepticism due to the failed loan to Solyndra, a solar-panel startup.

• Critics, including Rep. Cathy McMorris Rodgers, have raised concerns about the increased funding and the potential for waste, fraud, and abuse.

• Shah has approved loans to companies like Monolith and Syrah Resources, despite staff concerns about risks.

• There have been discussions about a loan for an Occidental Petroleum project involving carbon removal, but concerns about environmental backlash remain.

• Despite being based in Washington, D.C., Shah has a background more akin to Silicon Valley, having co-founded a solar-energy company called SunEdison in 2003.

FUNDRAISING

NextEnergy Capital raises $500 million for solar

• NextEnergy Capital (NEC) has announced the first close of its fifth investment vehicle, NextPower V ESG (NPV ESG).

• NPV ESG is a solar strategy targeting capital commitments of $1.5 billion with a $2 billion hard cap.

• The first close commitments amounted to $480 million, with investors including KLP and a large Nordic pension fund.

• NPV ESG aims to earn attractive risk-adjusted returns from investments in solar PV and energy storage infrastructure assets in OECD geographies.

• The fund primarily targets Europe, North America, and Chile, where NEC manages an extensive solar PV infrastructure portfolio.

• NPV ESG is classified as an Article 9 Fund under the EU SFDR and is forecasted to produce enough clean energy to power up to 750,000 households per year.

• NEC has a track record of investments in nearly 400 utility-scale solar assets across OECD markets since 2007.

• The NextEnergy Group provides expertise across the entire solar value chain, including investment management, asset management, and development.

BATTERY MATERIALS

The Economist reports on deep-sea mining of nickel

• Deep-sea mining may alleviate the global battery-metal shortage.

• Nickel obtained from rainforests destroys 30 times more life than mining it from the deep sea.

• The demand for battery minerals, especially nickel, is increasing due to the electrification project and renewable energy transition.

• Indonesia currently meets a significant portion of the nickel demand but is unable to keep up with rising demand, leading to deforestation.

• The Clarion-Clipperton Zone (ccz) in the Pacific Ocean contains trillions of nickel nodules, offering a potential alternative source.

• The mining company The Metals Company (tmc) plans to mine a portion of the ccz using underwater robots to collect nodules from the seabed.

• Other companies, including Global Sea Mineral Resources and Chinese firms, are also interested in deep-sea mining.

• Deep-sea mining will impact the surrounding ecosystem but may have a smaller environmental footprint compared to land-based mining.

• The ccz supports diverse species, although in low abundance, while rainforests have higher biomass but lower nickel concentration.

• Seabed nodules have higher metal concentrations and require less energy for processing, resulting in lower greenhouse gas emissions.

• Deep-sea mining can potentially ease the pressure on Indonesian rainforests, but it is unlikely to replace all land-based mining.

• The Metals Company aims to start producing nickel from the seabed by the end of next year.

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.