Houston firm announces $650 million equity fund to finance hydrogen project near Delta

Haddington Ventures LLC, a Houston-based banking and financial services, has formed Haddington ESP I LP, an equity fund designed specifically to provide construction equity for projects developed by the Advanced Clean Energy Storage joint venture (ACES Delta). ACES Delta is a massive hydrogen producing and storage project in Millard County. The initial $650 million in the fund allowed construction at the site to begin immediately. Operations at the hydrogen hub operations are scheduled to commence in 2025.{mprestriction ids="1,3"}

The investors in Haddington ESP are Alberta Investment Management Corp., one of Canada’s largest and most diversified institutional investment managers; global investment firm GIC, based in Singapore; Toronto-based international financial services provider Manulife Financial Corp.; and Ontario Teachers’ Pension Plan Board. In addition to the investors’ initial $650 million equity commitment, they have additional rights to increase their collective investment to $1.5 billion, according to a release from Haddington Ventures.

ACES Delta is developing the green hydrogen storage hub electrolyzer capacity to produce up to 100 metric tons per day of green hydrogen under a long-term contract with the Intermountain Power Agency (IPA). IPA is comprised of 23 Utah municipalities and owns the Intermountain Power Project (IPP). IPP supplies power to the IPA members, six rural electric cooperatives and municipal utilities in Southern California, including Los Angeles, Burbank and Glendale.

The initial funding from Haddington ESP will finance a project to use renewable energy resources to power 220 megawatts of electrolyzers that will split water into hydrogen and oxygen. The resulting zero-carbon green hydrogen will be stored in salt-dome storage caverns and made available on demand to IPA, which intends to utilize the hydrogen in its combined-cycle natural gas plant to generate electricity for its project participants.

Construction of the initial phase of the hub, which is now underway, will help create up to 400 local construction jobs throughout the three-year construction cycle and is expected to contribute significant property tax revenue to the local county services such as law enforcement, infrastructure and others, according to previous reporting about the project.

“This is a pivotal investment for western states seeking to meet their aggressive decarbonization goals,” said John Strom, managing director of Haddington Ventures. “The ACES Delta hub will be larger than any existing green-hydrogen production and storage site by a factor of 10, which is the scale needed for electric utilities. The project uniquely leverages readily scalable electrolyzer technologies with multiple large salt-dome storage caverns to make a meaningful environmental contribution.”

ACES Delta is a joint venture between Mitsubishi Power Americas and Magnum Development, a managed portfolio company of Haddington Ventures. The Haddington/Magnum team brings experience in underground salt storage development, construction and operation while Mitsubishi Power Americas brings experience and technological support for the electrolyzers and other power related elements, the joint project has said.{/mprestriction}