Chevron looks to join green hydrogen venture

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Fossil fuel company Chevron said it has agreed on a framework to acquire an equity interest in ACES Delta, a joint venture between Mitsubishi Power Americas and Magnum Development that owns the Advanced Clean Energy Storage project.

The project would produce, store, and transport green hydrogen in salt dome caverns at utility scale for power generation, transportation, and industrial applications in the western United States.

The joint venture is located in Delta, Utah, next to the Intermountain Power Plant (IPP), which would be converted from coal to natural gas and green hydrogen to produce electricity. The Los Angeles Department of Water and Power (LADWP) is leading the power plant conversion. The plant would use a gas turbine designed and built to operate on 100% green hydrogen.

Dubbed “IPP Renewed,” the Intermountain project includes retiring existing coal-fired units and installing new natural gas-fired electricity generating units capable of using hydrogen for 840 MW net generation output. Additional investment will modernize the power plant’s transmission system to southern California, and develop hydrogen production and long-term storage capabilities.

ACES Delta concept drawing.

Image: Mitsubishi Power

The natural gas generating units will be provided by Mitsubishi Power and designed to use 30% hydrogen fuel at start-up, transitioning to 100% hydrogen fuel by 2045 as technology improves.

Salt dome storage of hydrogen is being evaluated at other U.S. locations by a partnership between Mitsubishi Power and Texas Brine.

In May, the Green Hydrogen Coalition, LADWP,  and other partners launched HyDeal LA, an initiative to achieve at-scale green hydrogen procurement at $1.50/kilogram in the Los Angeles Basin by 2030. HyDeal LA aims to overcome the biggest barrier to the green hydrogen economy—its high cost—by launching a commercial green hydrogen cluster at scale.

Phase 1 is planned to design the supply chain needed to achieve $1.50/kg delivered green hydrogen in the LA Basin. It also will strive to agree on terms and conditions to achieve production, storage, transport, and delivery of green hydrogen at scale.

Demand growth

Future anticipated projects under the ACES Delta umbrella include expanding green hydrogen supply to other Western states and the construction of connecting hydrogen infrastructure to build a regional hydrogen production, transportation, and supply network.

Chevron said it is working to build demand for hydrogen in heavy-duty transportation and industrial sectors where greenhouse gas emissions have been hard to abate.

ACES Delta is co-owned by Magnum, which is a Haddington Ventures portfolio company, and Mitsubishi Power. Chevron, Magnum, and Mitsubishi Power are negotiating definitive documentation outlining Chevron’s participation. Terms of the transaction are subject to the negotiation of definitive agreements, and closing is expected to be subject to customary closing conditions.

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