June 16, 2022 • Paul Rodden • Season: 2022 • Episode: 122
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In episode 122, An Italian electrolyzer manufacturer is going for their IPO. And a huge loan from the US Department of Energy could finally launch the green hydrogen hub in Utah. All of this on today's hydrogen podcast.
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An Italian electrolyzer manufacturer is going for their IPO. And a huge loan from the US Department of Energy could finally launch the green hydrogen hub in Utah. All of this on today's hydrogen podcast.
So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where's capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen, and this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
In an article from the Financial Times, Sylvia Borelli writes De Nora sticks to IPO plan as hydrogen rush Trump's market chaos. Italian electrochemistry group industry De Nora will push ahead with a Milan listing this month despite market turbulence as its performance exceeds even the most optimistic forecast amid a global rush to hydrogen base power. The IPO which analysts and bankers say could value the family owned company at four to 5 billion euros comes as many businesses in Europe and the US postpone their IPO plans because of rising inflation, monetary policy shifts and the war in Ukraine. According to Paolo Dellachà, we can press ahead with our plans in spite of what is happening around us because the company is performing well. And we have the highest order backlog in our history, which is a clear sign of our growth trajectory.
De Nora, which was founded in Milan in 1923 is the world's leading manufacturer of electrodes traditionally employed in chlorine soda production that are now an important part of the technology used to produce green hydrogen. The group reported revenues last year of 616 million euros with a core profit of 127 million euros. Hydrogen is set to play an important role in the push to decarbonize and wean European energy off its dependence on Russia. The European Commission has increased its renewable hydrogen targets fivefold by 2030. Terry Britain, EU commissioner for the internal market and a group of chief executives including Dellachà signed a joint declaration last month committing the industry to a tenfold increase of its electrolyzer manufacturing capacity by 2025. Again, according to Dellachà, what is happening in Europe will greatly support our growth, but we clear EU wide targets and regulations. The continent can't afford the same mistakes it made on solar energy. And Brussels knows this.
He continues by saying the good news for us is that technology, which is what we do isn't dependent on renewable energy. All we need is clean electricity, which can also be sourced through nuclear energy or biomass. Under the listing plan, at least 25% of the company will be floated with the De Nora family and Italian energy infrastructure companies SNAM, reducing their stakes. SNAM bought a 36% stake in the company from Blackstone for a little more than 400 million euros in 2020, which valued the company at about 1.2 billion euros. The De Nora brothers own the remaining 64%. The IPOs prospects and the price range will be published this week. When the IPO was first announced analysts said De Nora's equity value would be in the range of four to 7 billion euros depending on the valuation of its hydrogen business.
But the expectation now is that the listing will be in the lower range because of the market turbulence on this topic Dellachà said that our pipeline of green hydrogen projects worldwide has significantly increased since gas prices have begun to soar. The company's largest markets are in Europe, the US and Middle East and De Noras portfolio also includes a 34% stake in the thyssenkrupp new Sarah joint venture, which specializes in green hydrogen production processes. New Sara which is another IPO candidate this year is also working on the construction of the world's largest green hydrogen plant in Saudi Arabia. And let's expect the traditional electrodes and hydrogen businesses to be valued at about one and a half billion euros each and the water treatment technology at about 1 billion euros while the thyssenkrupp joint venture stake would be valued at roughly 1 billion euros.
Lastly, Dellachà just said this IPO is the natural evolution of our growth trajectory. It will give us more recognizability and the peace of mind to be able to always say yes when the time to sustain further and larger acquisitions comes. Okay, so an interesting move for De Nora to go public right now. And for going for an IPO right now just how much of their valuation are they leaving on the table? Well, according to analysts, it could be up to 2 billion euros and that's not a small amount. And so with that being the case, they must be extremely confident that they're going to see massive growth in the next 10 years. And if we take a step back and look at the electrolyzer market overall, the demand is absolutely staggering. And it also seems like they want to be an early mover in this space, but either way, good luck to De Nora and their upcoming IPO efforts. Next on a press release on June 9, the US Department of Energy closes a $504.4 million loan to advanced clean energy storage project for hydrogen production and storage. Advanced Clean Energy Storage One LLC will develop the world's largest industrial green hydrogen facility in central Utah.
The Hub will use Utah's unique geological salt domes to store green hydrogen across two massive salt caverns, each capable of storing 150 gigawatt hours of energy. The long duration energy storage capability of the salt caverns will help improve resource adequacy and decreased costs by capturing excess renewable power when it is abundant and dispatching it back on the grid when it's needed. The US Department of Energy's Loan Programs Office has closed a $504.4 million loan to the project. The loan closed on June 3 of 2022, highlighting the administration and the Energy Department's commitments towards supporting the clean hydrogen sector. This loan helps generate a viable market for hydrogen and will make it scalable in the western United States and electrical grid, creating a fundamental infrastructure necessary to deploy the zero carbon energy source. In a quote from Michael Ducker, Senior Vice President of hydrogen infrastructure for Mitsubishi power, Americas and president of advanced clean energy storage one, the advanced clean energy storage team with a world class industry partners is excited to secure this loan by the Department of Energy to develop the first phase of the world's largest renewable hydrogen energy hub.
This step creates a path to accelerate the long term hydrogen market and clean energy landscape to expand decarbonisation across the United States. And in a quote from the US Secretary of Energy, Jennifer Granholm. Since President Biden's first day in office, the DOE has made it a priority to leverage the potential of the loan programs office to fund emerging technologies that will deploy clean energy and reliable energy to Americans. Accelerating the commercial deployment of clean hydrogen as a zero emission long term energy storage solution is the first step in harnessing its potential to decarbonize our economy, creating good paying clean energy jobs, and enable more renewables to be added to the grid. The advanced clean energy storage hub will help the clean energy transition by supporting the Inter Mountain Power Agency's IPP renewed project, upgrading to an 840 megawatt hydrogen capable gas turbine combined cycle power plant, the plant will initially run on a blend of 30% Green hydrogen and 70% natural gas starting in 2025, and incrementally expand to 100% Green hydrogen by 2045.
The Hub will produce up to 100 metric tons per day of green hydrogen from renewable energy using electrolysis. Green hydrogen can then be stored in two massive salt caverns, each capable of storing 150 gigawatt hours of energy, resulting in the world's largest single hydrogen storage site and providing capabilities for seasonal shifting of excess renewable energy. The long duration energy storage capability of the salt caverns will help improve resource adequacy and decreased costs by capturing excess renewable power when it is abundant and dispatching it back on the grid when it's needed. According to Bill Newsom, President and CEO of Mitsubishi power Americas this joint venture is historic for Mitsubishi power, Americas and the future of global hydrogen deployment. We're proud to partner with Magnum Development and provide the hydrogen equipment to further advance carbon free hydrogen as the cornerstone of our future energy supply and help chart the path towards net zero. This project sets the industry gold standard for hydrogen deployment, helping to combat the impacts of climate change and advanced human prosperity.
The development and operation of the advanced clean energy storage hub will help spur economic development locally by creating up to 400 local construction jobs throughout the three year construction cycle, and will employ a projected 25 full time operations and maintenance personnel to provide 24/7 operations and maintenance to the facility. Additionally, property tax revenue collected by Millard county Utah will contribute to services that benefit all nearby Utahns which typically include law enforcement and emergency response infrastructure and other services. And lastly, in a quote from Craig Broussard, CEO of Magnum development and aces Delta Magnum development has enjoyed a synergistic relationship with the city of delta and Miller County since 2008. In addition, royalties paid from our operations go to our mineral estate partner, the Utah school and institutional trust lands administration to provide funding for the Utah Educational System. Over the next three decades, significant taxes and royalties will flow from this initial phase of green hydrogen development at our site. Okay, so if you've listened to this podcast for a while now, you know, we've covered this project in some detail several times.
And this is the first Time, we've mentioned that they finally have enough capital to proceed with construction. And now that it seems like this project is finally going to take off and get constructed, and if everything goes as smoothly as they predict, we could be looking at someone developing the blueprint for green hydrogen development and storage, which could very much have global implications.
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