Investment Accelerates U.S. Green Hydrogen Development
(October 17, 2023) Durham, NC, and Golden, CO – Modern Energy announced today a $20 million equity commitment to Colorado-based NovoHydrogen, the premiere North American green hydrogen developer.
NovoHydrogen is addressing a crucial need in the global energy transition and decarbonization efforts. Although today’s global hydrogen industry is already massive with demand totaling 95 million mt/year in 2022 or roughly 2.5% of global final energy consumption, more than 95% of current hydrogen production is dependent on fossil fuel feedstocks (primarily natural gas and coal). This fossil fuel dependence and associated energy- and emissions-intensive processes present a significant decarbonization problem.
NovoHydrogen, founded in 2021 by Matt McMonagle, develops onsite and near-site green hydrogen projects for its customers across a variety of sectors. This capital will enable NovoHydrogen to continue strengthening its team and bring its development portfolio of green hydrogen projects to final investment decision and into construction. Prior to closing Modern Energy’s investment, NovoHydrogen had raised initial seed funding of $3.5 million and formed a strategic partnership with Ohmium, a leading Proton Exchange Membrane (PEM) electrolyzer manufacturer.
“NovoHydrogen’s Matt McMonagle has assembled an impressive executive team, and their early-market presence and thoughtful go-to-market strategy have earned them significant development momentum,” said Chris Hamilton, Chief Investment Officer at Modern Energy. “Green hydrogen is emerging as an essential piece of the energy transition. NovoHydrogen has both the demonstrated experience and excellent partnership network necessary to help push the industry forward,” said Hamilton. “We are tremendously excited to partner with them to accelerate green hydrogen adoption in North America.”
Green hydrogen is produced by using clean energy to split water molecules through electrolysis, producing a versatile, storable, and transportable fuel with no greenhouse gas emissions. Green hydrogen has the potential to significantly reduce carbon emissions in critical sectors such as heavy industry (e.g., ammonia, refining, glass, metal, cement and steel), dispatchable power (e.g., grid-connected peakers, backup power, resiliency and microgrid), and transportation (e.g., aviation, heavy-duty fleets), making it an essential component of the ongoing energy transition. In the United States, there is considerable regulatory support for green hydrogen, with the Inflation Reduction Act offering a Production Tax Credit worth up to $3/kg and the Infrastructure Investment and Jobs Act providing $8 billion for clean hydrogen hub development. As a member of the Pacific Northwest Hydrogen Hub, NovoHydrogen was also recently selected to begin award negotiations for the development of this site.
“During our fundraising process, we sought not only corporate capital but also a partner who shared our mission to deploy distributed green hydrogen infrastructure and could help accelerate our growth. We were fortunate enough to find such a partner in Modern Energy who also provides core business operations support to NovoHydrogen as we scale our key functions like origination, project development, and project finance,” said Matt McMonagle, CEO of NovoHydrogen. “We are grateful to the first-class teams at GreenFront Energy Partners and Vinson & Elkins, who advised us during this process, and we look forward to continuing to bring cost-effective, resilient, and green hydrogen to our North American customers. Finally, I wish to thank my current Board and investors for their continued support and counsel throughout this exciting process.”
About Modern Energy
Modern Energy® is a diversified clean energy company that invests in, builds and operates energy transition businesses to drive progress toward a zero-carbon economy. Our portfolio includes platforms that deliver distributed energy solutions to customers in the United States and Brazil. Through our Capital + Capabilities + Culture model, Modern Energy invests development equity in emerging developers and provides operational services to accelerate growth. With offices in Durham, NC, Austin, TX, New York, NY and Sao Paulo, Brazil, Modern Energy® is a certified B-Corp with a mission to advance affordable, reliable, sustainable energy for all. For more information: https://modern.energy
NovoHydrogen is a green hydrogen project developer. NovoHydrogen’s mission is to accelerate the energy transition with a focus on the tough-to-decarbonize industrial, transportation, and power sectors through green hydrogen where it is the best decarbonization solution. We are led by the conviction that green hydrogen is a key piece of the decarbonization puzzle. This drives our passion for our work. NovoHydrogen focuses on the origination, project development, and financial structuring of green hydrogen projects to serve our customers. We leverage our deep energy sector knowledge to provide green hydrogen infrastructure solutions. NovoHydrogen is experienced at deploying and commercializing successful innovative energy transition technologies. Our extensive learnings from across the energy sector include developing solar, wind, and battery storage assets and oil & gas operations. This track record has given us real project experience that customers can trust. For more information: https://novohydrogen.com