Vast Solar has executed a letter of intent (LOI) with German energy company Mabanaft GmbH & Co. KG for potential offtake and equity investment in Solar Methanol 1 (SM1), Vast’s world-first green methanol demonstration plant.
Vast is a concentrated solar power (CSP) technology and project developer, which boasts technology to generate green, dispatchable utility-scale electricity and industrial process heat.
SM1 will produce up to 7,500 tonnes per annum of green methanol, partly-powered by dispatchable electricity and heat from VS1, Vast’s 30MW/288 MWh CSP project co-located with SM1 in Port Augusta, South Australia.
Mabanaft is active in the import, distribution and marketing of petroleum products, natural gas liquids, chemicals and biofuels, and it is supporting its customers’ green transition with alternative long-term solutions.
It is now lining up to be a German customer for methanol for SM1, which has received joint German-Australian funding under the HyGATE initiative to progress renewables-based hydrogen and solar methanol production facilities at Port Augusta.
The backing was awarded to the Solar Methanol Consortium, comprising Vast and project partners such as industrial technology group Calix and Fichtner.
The Australian Renewable Energy Agency (ARENA) has approved $65 million in funding for VS1.
CEO of Vast Craig Wood said: “Partnering with Mabanaft is an important step forward for SM1 that will unlock significant development of the project.
“Together with the Solar Methanol Consortium, we are excited to partner with a company such as Mabanaft that offers its customers innovative energy solutions for their transportation, heating, industrial and agricultural needs.”
After successful completion of Front End Engineering and Design (FEED) of the project, a Final Investment Decision (FID) will be made, with equity funding expected by Vast to be matched by ARENA and PtJ for a total funding envelope of up to $78 million.
Calix CEO and Managing Director Phil Hodgson said the company welcomed Mabanaft as a partner to the Solar Methanol Consortium.
Hodgson said: “Today’s announcement is testament to the significant demand for more sustainable transport fuels and is an important milestone in the consortium’s journey to use renewable energy, hydrogen and CO2 captured from industry to help decarbonise this hard-to-abate sector.”