As concerns about energy security have come to the forefront, some in the mainstream have begun to pump the brakes on the idea of energy transition at any cost and reevaluate the practicality of some proposed solutions. But that hasn’t changed the long-term outlook for energy transition nor the fact that numerous individual projects focused on alternative fuels, carbon capture, hydrogen and renewable energy are in the works, gaining in prominence and attracting a prodigious amount of investment. There is still an anticipation among investors that the market will increasingly demand greener production methods — they just need to be well-conceived, planned and executed. The good thing for Fidelis New Energy — a Houston-based firm focused on climate-impact infrastructure, including low-carbon, sustainable fuels — is that, among renewable producers, they’re building a sustainable cost advantage through efficient, integrated design. In today’s RBN blog we look at what Fidelis calls the Grön Fuels GigaSystem.
The GigaSystem promises to bring sustainable aviation fuel (SAF) and renewable diesel (RD) production together with carbon capture and sequestration (CCS), while utilizing carbon-negative power to reduce the carbon intensity (CI) of its fuels. Even more fundamentally, the system has the enviable capacity to handle multiple transportation options, with rail, pipeline and dock infrastructure, centrally located at the Port of Greater Baton Rouge. Fidelis and Optimized Process Designs (OPD), an affiliate of Koch Engineered Solutions, announced the execution of a lump-sum, turnkey definitive engineering, procurement and construction (EPC) agreement for the renewable fuels facility as well as design considerations enabling the optimized add-on of CCS and carbon-negative power to the site, all of which rely on the use of existing, proven technologies from leading global companies.
We’ve written a lot about RD, SAF and other alternative fuels over the last year, especially in our Come Clean series, which looked at how low-carbon fuel policies are incentivizing major shifts in the transportation sector. Along those same lines, as we said recently in Playin’ by the Rules, a molecule’s pedigree — how it is produced — has become at least as important as its energy content. It’s the fundamental difference in the way value is established in renewable, decarbonized energy markets versus traditional commodities. In traditional energy markets, value is defined by physics, chemistry and geography. But in the world of renewables and decarbonization, value is primarily determined by rules that specify what a type of energy is worth, what is required to prove that worth, and how that value is ultimately captured by market participants. As we see it, the GigaSystem’s backers seem to fully understand not only those rules and how to capture value based on them, but also the driving motivations behind the rules. So even if policies change (which they are prone to do) their fundamental value proposition will likely persist. What’s more, their plan to marry proven, synchronous technologies with high-value terminaling assets ought to make them competitive under just about any regulatory regime. At the business end of the GigaSystem is alternative fuels production, so we’ll start to dig in there.
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