NetworkNewsWire Editorial Coverage
New York, NY – January 31, 2023 – The market for renewable energy enjoys considerable tailwinds due to growing concerns about climate change, energy security and global initiatives to reign in carbon emissions. The tailwinds turned into a tempest late in 2022 when the Inflation Reduction Act (IRA) was signed into law. The IRA is the largest investment ever by the U.S. government in renewable energies, earmarking $369 billion to accelerate efforts to reduce dependence on fossil fuels. According to some experts, the IRA is expected to more than triple America’s clean-energy production by 2030, resulting in about 40% of the nation’s energy coming from sources such as wind, solar and renewable natural gas (RNG). For this to happen, about 550 gigawatts of new energy supply from green sources will come online over the next seven years. Against the backdrop of this generational opportunity, EverGen Infrastructure Corp. (TSX.V: EVGN) (OTCQX: EVGIF) (Profile), a specialist in RNG, has positioned itself as an emerging leader in the booming renewables sector. Others in the space that are recognized as leaders include oil juggernaut BP plc (NYSE: BP), utility Fortis Inc. (NYSE: FTS), cleantech 347Water Inc. (NASDAQ: SCWO) and Anaergia Inc. (TSX: ANRG).
- To achieve net-zero carbon emissions by 2050, it is estimated that $100 trillion in capital investment is necessary, creating unprecedented upside for innovators.
- EverGen Infrastructure, which owns and operates the first grid-connected renewable natural gas facility in North America that has been producing RNG for more than a decade, has a growing portfolio of projects.
- Expansion at EVGN’s three flagship facilities will result in the generation of ~480,000 gigajoules of energy annually.
- The company expects to significantly grow its Adjusted EBITDA to $13M from its core portfolio versus ~$3M in existing adjusted EBITDA, placing it at an attractive EV/EBITDA ratio compared to peers.
Click here to view the custom infographic of the EverGen Infrastructure Corp. editorial.
The Global Green-Energy Transformation
According to a BNY Melon study, it will take investments of approximately $100 trillion to reduce the current 30 billion tons of carbon emissions to reach net zero by 2050, a figure that closely mirrors estimates from the International Energy Agency (IEA). While that figure may seem astronomical, it actually is not out of line with global fixed capital investments every year, which currently run around $20 trillion. More than $1 trillion annually is already being invested in clean energy pre-IRA, a figure the IEA says needs to rise to $4 trillion.
Former Bank of England Governor Mark Carney calls this the “greatest commercial opportunity of our age.” It is anticipated that additional capital will pour into the space, lending to pricing certainty for projects as well as supporting merger and acquisition activity across the RNG sector. In 2022, jockeying for green-energy market share was on full display in several high-profile acquisitions, including BlackRock buying Vanguard Renewables for $700 million, BP acquiring Archaea Energy for $4.1 billion and Shell paying $2 billion for Nature Energy Biogas.
RNG is a renewable clean energy derived from decomposing organic matter, such as wastewater, food waste, agriculture waste, etc. It is pipeline-quality refined biogas that is indistinguishable from and completely interchangeable with conventional natural gas extracted from the earth.
At the epicenter of the green-energy transformation, EverGen Infrastructure Corp. (TSX.V: EVGN) (OTCQX: EVGIF) is an emerging leader in the renewable energy space, owning and operating a portfolio of biogas and RNG projects across Canada. Joining the growing chorus of RNG projects planned or under construction in North America, EverGen’s subsidiary, Fraser Valley Biogas, was the first facility to produce renewable natural gas in Canada, running since 2011. EverGen’s initial operations consisted of its Fraser Valley Biogas, Net Zero Waste Abbotsford and Sea to Sky Soils businesses, all operating in British Colombia. In 2022, EverGen began to expand across Canada and acquired a majority position in GrowTEC in Alberta and a 50% stake in a large joint venture in Ontario comprised of three high-quality, on-farm RNG projects.
EverGen is Canada’s leading RNG platform capitalizing on strong decarbonization initiatives, while providing a solution to one of the main greenhouse gas (GHG) emitting sources for municipalities: organic waste. To capture these emissions and produce RNG from organic waste, there is a significant need for additional RNG projects and room for growth in the industry, with only about 27% of organic waste in Canada currently being diverted from landfill. Corporations, governments and utilities are supporting EverGen’s growth through attractive, low-risk, long-term, off-take agreements to purchase RNG and achieve greenhouse gas emission reduction goals.
At EverGen facilities, organic waste goes into an aerobic digester where it exits as digestate — where organic nutrients are recovered and recycled as fertilizer and soil amendments — and biogas, which is further refined into RNG and sold to utility partners. The company faces an abundance of feedstock supply considering that more than 144 million metric tons of food waste are produced annually and there are more than 19,000 large farms and dairies in North America.
EverGen’s flagship assets are in British Columbia. Fraser Valley Biogas (FVB) uses blended feedstock from agricultural and commercial organic waste, and the operation has a current capacity of 50,000 tonnes annually generating about 80,000 gigajoules of energy. Expansion is underway to increase capacity to 100,000 tonnes per year for 160,000 gigajoules output.
Net Zero Waste Abbotsford (NZWA) is an operational organics-processing facility utilizing agricultural, municipal and commercial organic waste. The plant has capacity of 40,000 tonnes per year, which is being expanded to 135,000 tonnes. At capacity, following the construction of an anerobic digestor, the plant will produce RNG equal to 180,000 gigajoules of energy. (Note: To lend some reference, consider one gigajoule is equivalent to about 277 kilowatt-hours of electricity. As a fuel, RNG is equivalent to 26 liters of gasoline.) FortisBC has a 20-year offtake agreement for the RNG produced at NZWA.
Also in British Columbia is EverGen’s Sea to Sky Soils, an organics-processing facility that produces up to 40,000 tonnes of municipal and agricultural waste annually, with expansion plans to increase to 60,000 tonnes.
Last year was a watershed year for EverGen as it expanded to cement its position as a market leader. The company acquired a 67% stake in GrowTEC, a multifaceted bioenergy venture of sustainable agriculture near Lethbridge, Alberta. The facility is a biogas operation with an anaerobic digester; additions are being made to upgrade the system to process the biogas into RNG. An agreement is already in place for FortisBC to buy the RNG, where it will be tied into the local natural gas pipeline.
In aggregate, these facilities will generate approximately 480,000 gigajoules of energy annually when expansion is complete. That’s about 133 million kilowatt-hours of electricity and compelling upside with the current spot price for RNG above $60 per gigajoule. According to the Energy Information Agency, the average annual electricity consumption for a U.S. residential utility customer was 10,632 kilowatt-hours, meaning the RNG from EverGen’s three plants could power an estimated 12,509 homes with clean energy.
Project Radius in Ontario is a model for growth at EverGen. The cluster of projects is a late-development-stage portfolio of three high-quality, agricultural RNG projects serving as the cornerstone of EverGen’s RNG presence in Ontario. Collectively, these projects are expected to produce about 1.7 million gigajoules of RNG per year. EverGen is expected to announce a final investment decision and notice-to-proceed early this year with construction targeted across 2023 and 2024. EverGen is a 50-50 partner on Project Radius with Northeast Renewables LP.
EverGen forecasts RNG production from portfolio projects collectively at more than 2 million gigajoules per year, with the potential to grow to 8 million gigajoules with consideration for the 25-plus projects it is evaluating in its pipeline. Some of those projects are abandoned plans in the fragmented industry that EverGen can scoop up at attractive prices and integrate into its ecosystem. The company has access to capital and the technical expertise to optimize projects at any stage or condition.
EBITDA on the Rise
In its latest quarterly report, covering the quarter and nine months ended Sept. 30, 2022, EverGen showed adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.7 million year to date. Management has guided EBITDA of ~$2 million for 2022, which it expects to grow to $13 million from its fully funded three core expansion projects.
A look at the EverGen corporate presentation is enlightening to the importance of its EBITDA estimate. The company’s RNG peers are trading at 13-times multiple of enterprise value to EBITDA. EverGen is trading at a substantial discount to peers at only three times 2023 analyst forecasts, despite its strong and funded growth profile.
Utility Partners Onboard
The $369 billion commitment by the U.S. government is catalyzing investments throughout the energy market, including gas utilities hustling to catch up with electric utilities. In North America, renewables currently comprise less than 1% of the gas market, a figure that is expected to change dramatically soon. This change is evidenced through legislation such as Oregon’s SB98 setting a volumetric goal of 30% RNG by 2030. Utilities are on board, including EverGen partner FortisBC, which is aiming for 15% of its volume to come from RNG by 2030.
FortisBC is not alone with its climate-friendly ambitions. Energir in Quebec has a similar sustainability goal, and American counterparts such as NW Natural and Vermont Gas are spearheading an energy transition in the United States. As governments and corporations strive for decarbonization targets, the shift to RNG is logical and cost effective, putting EverGen in a position to thrive.
Incredible Headroom for Growth
According to Rested Energy, the oil exploration and production industry generated $2.47 trillion in revenues worldwide in 2019. Fossil fuels (crude, coal, and natural gas) comprise the lion’s share of the industry, evidenced by renewable energy sources only accounting for approximately 12.4% of total U.S. energy consumption in 2021.
BP plc (NYSE: BP), one of the biggest oil companies in the world, is a pioneer in low-carbon energy. The company has a broad spectrum of initiatives centered on decarbonization, including bioenergy, EV charging, renewables, and hydrogen and carbon capture and storage. Its renewables pipeline has more than quadrupled in three years. In addition, the company added 5,000 EV charging points in 12 months, decreased its oil and gas production emissions by 16% while shrinking its overall operational emissions by 35%, growing its offshore wind energy from zero to 5.2 gigawatts, and kickstarting 10 different hydrogen projects, among other things.
Fortis Inc. (NYSE: FTS) is a pioneer in the RNG business, working with local farms, landfills, green-energy companies and municipalities for more than a decade to capture methane from waste and purify it to make RNG. In 2019, Fortis announced its first-ever emissions reduction goal, its “30BY30” target. This is an ambitious target to reduce Fortis customers’ GHG emissions by 30% overall by 2030. The company’s Clean Growth Pathway to 2050 sets out four key areas to help achieve substantial GHG emissions reductions, including supporting the growth of renewable gas.
347Water Inc. (NASDAQ: SCWO) is a global clean-tech, social-impact company whose mission is to preserve a clean and healthy environment. The company is pioneering a new era of sustainable waste management that supports a circular economy and enables organizations to achieve their environmental, social, and governance (ESG) and sustainability goals. 347Water was selected by the U.S. Navy to utilize 374Water’s AirSCWO technology to validate its efficacy in the destruction of “forever chemicals” for potential remediation efforts at military bases worldwide.
Anaergia Inc. (TSX: ANRG) was created to eliminate a major source of greenhouse gases by cost effectively turning organic waste into RNG, fertilizer and water, using proprietary technologies. With a proven track record from delivering world-leading projects on four continents, Anaergia is uniquely positioned to provide end-to-end solutions for extracting organics from waste, implementing high efficiency anaerobic digestion, upgrading biogas, producing fertilizer and cleaning water. Anaergia has built many successful plants, including some of the largest in the world.
A carbon time bomb is ticking, and the world can’t wait. A titanic energy shift has begun, and it’s time to recognize the opportunities at hand and the companies that are stewards of this change.
For more information about EverGen Infrastructure Corp., please visit EverGen Infrastructure Corp.
NetworkNewsWire (“NNW”) is a financial news and content distribution company, one of 50+ brands within the InvestorBrandNetwork (“IBN”), that provides: (1) access to a network of wire solutions via NetworkWire to reach all target markets, industries and demographics in the most effective manner possible; (2) article and editorial syndication to 5,000+ news outlets; (3) enhanced press release solutions to ensure maximum impact; (4) social media distribution via IBN millions of social media followers; and (5) a full array of corporate communications solutions. As a multifaceted organization with an extensive team of contributing journalists and writers, NNW is uniquely positioned to best serve private and public companies that desire to reach a wide audience comprising investors, consumers, journalists and the general public. By cutting through the overload of information in today’s market, NNW brings its clients unparalleled visibility, recognition and brand awareness. NNW is where news, content and information converge.
To receive SMS text alerts from NetworkNewsWire, text “STOCKS” to 77948 (U.S. Mobile Phones Only)
For more information, please visit: https://www.NetworkNewsWire.com
NetworkNewsWire is part of the InvestorBrandNetwork
DISCLAIMER: NetworkNewsWire (NNW) is the source of the Article and content set forth above. References to any issuer other than the profiled issuer are intended solely to identify industry participants and do not constitute an endorsement of any issuer and do not constitute a comparison to the profiled issuer. FN Media Group (FNM) is a third-party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels. FNM is NOT affiliated with NNW or any company mentioned herein. The commentary, views and opinions expressed in this release by NNW are solely those of NNW and are not shared by and do not reflect in any manner the views or opinions of FNM. Readers of this Article and content agree that they cannot and will not seek to hold liable NNW and FNM for any investment decisions by their readers or subscribers. NNW and FNM and their respective affiliated companies are a news dissemination and financial marketing solutions provider and are NOT registered broker-dealers/analysts/investment advisers, hold no investment licenses and may NOT sell, offer to sell or offer to buy any security.
The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, NNW, FNM, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer’s filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer’s securities, including, but not limited to, the complete loss of your investment.
NNW & FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.
This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and NNW and FNM undertake no obligation to update such statements.
Corporate Communications Contact:
New York, New York
FN Media Group, LLC
The post Inflation Reduction Act Fans Red-Hot Trend in Renewable Energy Market appeared first on Financial News Media.