The Silicon Valley of Energy

PLUS: DOE's $6bn investment, Big Tech's energy obsession, Microsoft carbon removal, Alabama CCS, Enbridge and Summit announcing nat gas deals, LEGO carbon removal, Technip-LanzaTech score $200mm

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.

Here’s what we have for you today:

  • Tenaska announces the Longleaf CCS Hub project in Mobile County, Alabama, for carbon capture and storage (CCS) to assist industries in meeting emissions regulations and climate mandates.

  • The Longleaf CCS Hub has received funding from the U.S. Department of Energy's Office of Fossil Energy and Carbon Management (FECM) to support geologic characterization and permitting efforts.

  • The project involves various organizations, including Southern States Energy Board, Advanced Resources International, Crescent Resource Innovation, ENTECH Strategies, and others.

  • Tenaska's initial development of the Longleaf CCS Hub began in 2022, with construction expected to start in late 2025 and commercial injection a year later, pending necessary approvals.

  • Tenaska's Longleaf CCS Hub is part of its broader portfolio of CCS projects in the US

  • The Next 150 has signed a six-year agreement with Microsoft to supply 95,000 tons of high-quality Carbon Dioxide Removal (CDR) credits from its biochar plant in Guanajuato, Mexico.

  • The Next 150 is a Swiss climate-forward venture developer and operator, with its first biochar production facility in Mexico operational within a year of its founding in late 2022.

  • The biochar produced is integrated into quarry rehabilitation efforts to restore degraded landscapes, enhance biodiversity, and provide sustainable soil amendment to local farmers.

  • The company aims to deliver CDR credits by mid-2024 on the Puro.Earth registry and plans to have two more operational plants in Latin America by 2025.

  • Climeworks has secured a significant 9-year agreement with the LEGO Group and KIRKBI A/S for the permanent removal of CO₂ from the air.

  • The agreement is valued at USD 2.4 million for the LEGO Group and USD 405,000 for KIRKBI A/S.

  • Climeworks' technology targets hard-to-abate CO₂ emissions, aiming to remove CO₂ at megaton and gigaton scales by 2050.

  • This strategic collaboration underscores both companies' commitment to drive positive environmental change and contribute to a sustainable future.

  • Big Tech's focus on artificial intelligence (AI) is driving an immense demand for electricity, raising concerns about strain on the power grid and the transition to cleaner energy sources.

  • At the 2024 CERAWeek conference in Houston, executives discussed AI's significant electricity needs, with estimates suggesting that data centers for AI could strain the power grid and hinder the shift to cleaner energy.

  • Tech companies like Amazon and Microsoft are adding new data centers rapidly, emphasizing the critical role of electricity in data center profitability and the staggering power consumption of AI.

  • There's uncertainty about where the required electricity will come from, especially with challenges in building new wind and solar farms quickly enough to meet the demand.

  • Utilities may rely more on natural gas, coal, and nuclear plants to meet the rising power demand, despite the push for cleaner energy sources.

  • The surge in electricity demand is also driven by other factors like manufacturing expansion and the increasing use of electric power in transportation and industry.

  • Utilities are revising their power-demand forecasts significantly upward, necessitating a mix of resources to meet the growing demand.

  • The global expansion of data centers and AI usage is expected to double electricity consumption in these sectors by 2026, presenting challenges for power resources worldwide.

  • The Administration has allocated up to $6 billion for 33 projects across more than 20 states to decarbonize energy-intensive industries.

  • These projects are funded by the Bipartisan Infrastructure Law and Inflation Reduction Act.

  • The projects will focus on industries with high emissions such as aluminum, metals, cement, concrete, chemicals, refining, iron, steel, and more, aiming to reduce the equivalent of more than 14 million metric tons of CO2 emissions annually.

  • The projects include: seven chemicals and refining projects, six cement

    and concrete projects, six iron and steel projects, five aluminum and metals projects, three food and beverage projects, three glass projects, two process heat-focused projects and one pulp and paper project

  • The investment is matched by the selected projects to leverage more than $20 billion in total, cutting carbon emissions by an average of 77% and focusing on energy efficiency, electrification, clean hydrogen, and alternative fuels and feedstocks.

  • Technip Energies and LanzaTech have been selected by the U.S. Department of Energy (DOE) for up to $200 million in funding from the Bipartisan Infrastructure Law and Inflation Reduction Act (IRA) to develop a breakthrough technology for sustainable ethylene production.

  • The project SECURE (Sustainable Ethylene from CO2 Utilization with Renewable Energy) aims to produce sustainable ethylene from captured CO2, targeting a market estimated to reach $200 billion by 2030 with a global demand of over 231 million tons per year.

  • Ethylene is a key building block for chemicals and materials, and this technology will capture CO2 emissions and convert them into sustainable ethylene, integrated into existing commercial ethylene crackers.

  • If awarded, the funding will support the design, engineering, construction, and equipment for a commercial-scale integrated technology unit, creating 200 construction jobs and 40 permanent jobs with benefits and training opportunities.

  • Enbridge has formed a joint venture with WhiteWater/I Squared Capital and MPLX LP to develop natural gas pipeline and storage assets connecting Permian Basin supply to LNG and USGC demand.

  • Enbridge will acquire a strategic equity interest in the JV, with approximately 90% contracted cash flows and minimal commodity exposure.

  • The joint venture includes assets such as the Whistler pipeline, Rio Bravo pipeline project, ADCC pipeline, and Waha Gas Storage, with long-term contracts and investment-grade counterparties.

  • Enbridge will contribute its Rio Bravo pipeline project and cash to the joint venture, receiving a 19% equity interest and retaining a 25% economic interest in the Rio Bravo project.

  • This transaction aims to enhance Enbridge's super-system approach, providing last-mile connectivity to domestic and export customers and unlocking growth opportunities in sustainable natural gas production for export markets.

  • Summit Midstream Partners is selling its Utica assets to MPLX LP for approximately $625 million in cash.

  • This deal has caused Summit's shares to surge by about 38% to $26.88, reaching their highest point since December 2021.

  • The sale will shift Summit's portfolio focus to crude oil-rich basins, which will now make up more than half of the company's assets.

  • The Marcellus and Utica shale regions have seen gas rig reductions due to low prices, prompting Summit to seek value-optimizing strategies in other segments like Permian and Rockies.

  • The assets being sold include Summit's natural gas gathering system in southeastern Ohio and its equity interests in Ohio Gathering and Ohio Condensate, operated in partnership with MPLX.

McKinsey, BCG and S&P Global Commodity Insights all project electricity demand tied to data centers to increase at a compound annual growth rate of between 13% and 15% through 2030.

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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.

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