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BFD Expert Voices - Climate Deals

BFD Expert Voices

Rising costs keep weighing down America's nascent offshore wind industry, Alan writes.

Why it matters: A host of issues, from supply chain constraints to broken turbines, have developers threatening to pull the plug on projects unless they get more money.

Driving the news: Danish developer Ørsted told New Jersey regulators this month that it needs more money for its Ocean Wind 1 project off the South Jersey coast.

It's seeking a $1.50 increase to the average resident's electric bill — a move that's inflamed local opposition.

Co-owner PSEG is washing its hands of the project. The electric utility in January announced plans to unload its 25% stake to Ørsted.

Meanwhile, developer Avangrid this winter took steps to scrap and re-bid contracts for its 2+ GW Commonwealth Wind project serving Massachusetts.

What they're saying: "The process takes so long that a lot of things can happen in the middle and there should be some adjustments,” Avangrid CEO Pedro Azagra Blázquez told analysts in February.

Plus: The Trump administration's reticence to greenlight offshore wind projects means some contracts were negotiated years ago.

The big picture: No one's saying this will halt offshore wind investment. The U.S. last summer had more than 40 GW in development.

Yes, but: With policymakers focused on energy security — and offshore wind opponents getting more organized — repeated delays and price hikes aren't ideal.

Our thought bubble: Ørsted and Avangrid are savvy developers. Ørsted is among the world's largest offshore wind developers and built the first offshore wind farm in the U.S. If they're having trouble, so too will the rest of the sector.

1 big thing: Costs keep mounting for offshore wind

Illustration of offshore wind turbines in a sea made of money.

Amogy, a Brooklyn-based alternative fuels maker, raised $139 million in Series B-1 funding, the company tells Megan.

Why it's the BFD: Alternative fuels are still a long way from broad commercialization, but the Amogy funding shows investors are willing to write big checks to get the technology off the ground.

Details: SK Innovation led the all-equity round and will "closely collaborate" with Amogy, though Amogy CEO Seonghoon Woo declined to share whether SK Innovation was joining the startup's board.

Temasek, Korea Zinc, Aramco Ventures, AP Ventures, Mol Plus, Yanmar Ventures, Zeon Ventures and DCVC also participated in the round, which closed in mid-March.

How it works: Amogy (pronounced "ah-moe-jee," a play on combining the words "ammonia" and "energy") makes ammonia-based fuels for heavy-duty vehicles and maritime vessels, Woo says.

Its technology converts all types of ammonia to electricity, which can then be used to power large vehicles.

The company built an ammonia-powered tugboat that it plans to demonstrate in New York later this year.

2. The BFD: Alt fuel maker nabs $139M

Illustration of a large gas tank and ammonia molecules made from quarters.

Alcove, a software startup that lets companies manage and track carbon credits, raised $3 million in seed funding, the company exclusively tells Megan.

Why it matters: Some tech investors are willing to step in on early-stage rounds even amid a broader slowdown in funding for climate-software companies.

Details: Seven Seven Six led the all-equity round but is not getting a board seat, Alcove co-CEO Mariana Garza tells Megan.

XYZ Venture Capital and a Sequoia scout also participated in the round. Garza declined to share the company's valuation.

How it works: Alcove makes enterprise software that allows companies to track and catalog carbon credits.

Nashville-based clean energy company Clearloop is the startup's first customer, co-CEO Marley Rafson says.

3. Carbon-credit tracking startup raises $3M

Illustration of a calculator that reads CO2

💰 Hey big spender: TotalEnergies for the first time plans to spend more on "low-carbon" sources in 2023 than on new oil and gas projects, Axios' Ben Geman writes in Generate.

Between now and 2030, the oil major sees capex split roughly into thirds: low-carbon projects; new oil and gas projects; maintenance of the current fossil portfolio.

🍔 Fast food gets into fast charging: Several major fast food and convenience store chains have announced a big push into EV charging, a trend that could accelerate efforts to expand the country's embryonic charging infrastructure, Axios' Alex Fitzpatrick reports in What's Next.

You'll remember 7-Eleven's announcement from last week, plus Starbucks, Subway and Taco Bell.

📈 Big gains ahead for solar and wind: The renewables are on track to generate 40%-62% of U.S. electricity as soon as 2030, per a new National Renewable Energy Laboratory report.

The predictions align with Wood Mackenzie's outlook. Both found that the Inflation Reduction Act is turbocharging development. The remaining challenge: clearing bottlenecks.

🏗️ Concrete and carbon removal: Block-Lite, a family-owned masonry business in Arizona, said it will begin making concrete that incorporates captured carbon emissions.

Canary Media's Maria Gallucci has the details. The company is using tech from CarbonBuilt and Aircapture.

4. 🌡️ Temperature check

Illustration of a pattern of repeating thermometers with different temperature levels.

• Windfall Bio, a Menlo Park, Calif.-based methane-to-fertilizer developer, raised $9m in seed funding. Mayfield and Untitled led, joined by B37 Ventures, Baruch Future Ventures, Breakthrough Energy Ventures, Bessemer Venture Partners and Cavallo Ventures. https://axios.link/3FDFakv

• Excelsior Energy Capital, an Excelsior, Minn.-based firm focused on middle-market solar, wind and storage investments, announced the $502m first close of its second flagship fund. Excelsior Renewable Energy Investment Fund II is ultimately targeting $750m. https://axios.link/408EqfJ

• Argosy Private Equity acquired Vac2Go, a Louisville, Ky.-based provider of equipment to industrial, utility and municipal customers. https://axios.link/3JVQl9V

• Nickel 28 Capital, a Toronto-based nickel and cobalt producer, is fending off a mini-tender offer from Pelham Investment. https://axios.link/3FE9yLW

• Standard Solar, a Rockville, Md.-based solar and storage developer in the commercial- and community-scale sectors, acquired a 21 MW portfolio of planned solar projects in New York and Massachusetts from New Leaf Energy. https://axios.link/3K8Or7b

• Alfa Laval, the Swedish heavy industry manufacturer, completed its acquisition of Marine Performance Systems, a Dutch developer of “micro bubble” generators that reduce ship hulls’ friction and improve fuel efficiency. https://axios.link/3lv957T

• Cirba Solutions, the Charlotte, N.C.-based battery recycler, announced a $300m phase-one investment in an EV battery recycling facility in South Carolina. https://axios.link/3JYOcv5

The site will be the company's eighth in North America and its fourth in the emerging Battery Belt in the U.S. Southeast.

• Milestone Carbon, a Houston-based carbon sequestration developer, plans to evaluate 46,000 acres in Louisiana’s Terrebonne Parish for a potential CCS site. https://axios.link/3TwHeAR

• The Virginia State Corporation Commission approved a five-year RNG interconnection pilot by distributor Virginia Natural Gas. https://axios.link/40vzHVb

• Avangrid signed a PPA with Meta to supply energy from the 240 MW True North solar farm in Falls County, Texas. The project is Avangrid’s first solar development in the state. https://axios.link/42tFBYC

• EDF Renewables North America entered a 20-year PPA with the Southern California Public Power Authority for EDF’s 148 MW Sapphire Solar project in Riverside County. https://axios.link/408qu59

• CarbonCapture, an LA-based developer of modular DAC systems, announced an agreement with Microsoft to provide engineered carbon removal credits. https://axios.link/3Zbrvbo

• StoneX Group, an NYC-based financial services firm, and AirCarbon Exchange, a voluntary carbon market exchange, signed an agreement to create a U.S. digital carbon marketplace. https://axios.link/3Z9cBCq

• BioTown Biogas, a Reynolds, Ind.-based waste-to-energy developer, announced plans to activate its digester and processing facility on a farm in Reynolds. https://axios.link/3JYOYIz

• Silicon Ranch, the Nashville-based renewables developer, and the Bolivar Energy Authority in Tennessee announced that the 3.25 MWac Bolivar Solar Farm in Hardeman County is operational. https://axios.link/407I7SC

• Bloom Energy, the San Jose, Calif.-based fuel cell manufacturer, and SK Ecoplant Americas completed the installation of fuel cell systems at two Stamford Health locations in Connecticut. https://axios.link/40r6Dy1

• Alkegen, a specialty materials manufacturer, began commercial production of silicon fiber anode materials for batteries. https://axios.link/3nga9wH

• Luna Innovations, a Roanoke, Va.-based optical technology provider, received a power line monitoring contract for an undisclosed “innovative power generation project” serving a “major metropolitan area in the Northeast U.S.” https://axios.link/3yVVWYr

5. Hot deals

• Molly Wood founded Molly Wood Media, a climate communications and consulting firm. She previously led climate tech investing at Launch and will continue to invest in early-stage climate startups as an angel investor. https://axios.link/3JxB7rq

Wood joined Megan for one of our weekly Expert Voices Q&As last May. 

• Enfinium, the U.K.-based waste-to-energy company, hired Jenny Harrison as CFO. Harrison was previously finance director at UK Power Networks. https://axios.link/3Jvi5lk

• Black & Veatch, the Overland Park, Kan.-based engineering and construction company, hired Silas Dulan as associate VP and global director of diversity, equity, and inclusion. Dulan was previously director of DEI at Evergy. https://axios.link/40pzNNP

• GreenPower Motor Company, a Vancouver-based manufacturer of electric medium- and heavy-duty vehicles, hired John McDavid as production manager for its school bus factory in South Charleston, W.Va. McDavid was previously production engineer at a Toyota Motor Manufacturing facility in Buffalo, W.Va. https://axios.link/3TCdwuj

6. It's personnel

Happy Wednesday, and Ramadan Mubarak to everyone celebrating the holiday.

✈️ Megan is flying to Chicago for her brother's wedding and will try to eat as much deep dish pizza and drink as much Old Style as physically possible while she's there.

📦 Alan has started packing, slowly, ahead of the family's move to Rhode Island next month. Thoughts and prayers welcome.

Thanks to Michael Flaherty and Phoebe Neidl for today's edits.

And thank you for reading Climate Deals! Please share with your friends, family and wedding party members.

March 22, 2023

1 big thing: Costs keep mounting for offshore wind