$650M equity syndication program to finance green hydrogen platform

Haddington Ventures has established Haddington ESP I to offer construction equity for projects created by the Advanced Clean Energy Storage Joint Venture, which when completed will be the world’s biggest green hydrogen platform. Construction can begin in June 2022 with this equity finance, and hydrogen hub activities are expected to begin in 2025.

Alberta Investment Management Corporation, GIC, Manulife Financial Corporation (Manulife), and Ontario Teachers’ Pension Plan Board (Ontario Teachers’) are among the Haddington ESP’s investors. In addition to the $650 million equity commitment, the investors have the option to expand their total investment to $1.5 billion.

“This is a critical investment for western states aiming to reach their high decarbonization ambitions,” said Haddington Ventures’ Managing Director, John Strom. “By a factor of ten, the ACES Delta hub will dwarf any current green-hydrogen production and storage site, which is the size required for power utilities.” The project makes a significant environmental benefit by combining readily scalable electrolyzer technology with many massive salt dome storage caverns.”

Under a long-term contract with the Intermountain Power Agency, ACES Delta is creating a green hydrogen storage center near Delta, Utah, with electrolyzer capability to create up to 100 metric tonnes of green hydrogen per day (IPA). The Intermountain Power Project is owned by IPA, which is made up of 23 Utah towns (IPP). In Southern California, encompassing Los Angeles, Burbank, and Glendale, IPP provides electricity to IPA members, six rural electric cooperatives, and municipal utilities.

Haddington ESP’s initial financing will go toward a project that will use renewable energy to power 220 megawatts of electrolyzers that will split water into hydrogen and oxygen. The zero-carbon green hydrogen produced will be kept in salt-dome storage caverns and made accessible to IPA on demand, with the hydrogen being used in IPA’s combined-cycle natural gas plant to create power for project participants.

The initial phase of the hub, which is now under construction, is expected to generate up to 400 local construction employment over the course of the project’s three years, as well as considerable property tax income for local county services such as police enforcement, infrastructure, and others.

ACES Delta is a partnership between Mitsubishi Power Americas and Magnum Development, a Haddington Ventures managed portfolio business. The Haddington/Magnum team has experience in underground salt storage development, construction, and operation, while Mitsubishi Power Americas has experience with electrolyzers and other power-related features, as well as technological assistance. Please visit aces-delta.com for further details.

“AIMCo is pleased to be a member of the ACES Delta Platform alongside critical partners that are committed to the Delta site’s development as a vital hydrogen production and storage hub for the Western United States. Hydrogen is predicted to play a critical role in addressing the present and future decarbonization goals of numerous sectors and stakeholders. The first Project’s long-term contract nature fits well with the strategic objectives of our client’s portfolios, as well as the possibility for future investment in this burgeoning area.”

“We firmly believe that green hydrogen will play a key role in decarbonization in the US, where long-duration storage will be essential for higher renewable power penetration and to meet fluctuating inter-season power demand,” says Ben Hawkins, Head, Infrastructure, Renewables & Sustainable Investing AIMCo. We are thrilled to collaborate with this strong collection of like-minded developers and equity partners as a long-term investor in order to position ourselves advantageously for the burgeoning hydrogen economy.”

“Manulife is happy to deepen its longtime investment partnership with Haddington Ventures and collaborate alongside these important investors in projects created by ACES Delta,” said Ang Eng Seng, GIC’s Chief Investment Officer of Infrastructure. ACES Delta, we think, is in a unique position to construct a large-scale green hydrogen production and storage infrastructure to meet expanding customer demand. This investment furthers our goals of assisting in the decarbonization of energy sources and expanding our $42 billion green investment portfolio.”

“We’re thrilled to be investing in one of the largest and most sophisticated green hydrogen projects in the United States,” says Adam Wise, Manulife’s Head of Natural Resources and Sustainable Solutions. The Ontario Teachers’ Federation is dedicated to decarbonization and the energy transition, and we think that green hydrogen generation and storage will be critical in this process. “We see the ACES Delta platform as the start of a long-term relationship with a high-quality developer,” said Chris Ireland, Ontario Teachers’ Managing Director, Greenfield and Renewables.

Sidley Austin LLP provided legal assistance to Haddington ESP investors, while Willkie Farr & Gallagher LLP represented Haddington Ventures.