Charbone Hydrogen Corporation has agreed to buy three operating hydropower plants in Michigan with a combined capacity of 2.76MW in a $3.6 million deal.
Charbone concluded the final negotiations and executed the Purchase and Sale Agreement on 17 January between its wholly owned subsidiary, Charbone Corporation USA, and Northwoods Hydropower Inc for the acquisition of all of the general partner and limited partner interests of Tower Kleber Limited Partnership (TKLP) a Michigan Limited Partnership and Black River Limited Partnership, (BRLP), respectively the owner of the Tower 560kW, Kleber 1200kW and Alverno 1000kW operating hydropower plants in the Onaway, Michigan area.
The Limited Partnerships are parties to long-term Power Purchase Agreements with large local utilities and it is expected to increase Charbone USA’s recurrent revenues for 2023 and beyond for the duration of the PPA’s. The Michigan plants are also generating revenues from the sale of Renewable Energy Certificates.
Charbone’s strategy is to acquire its own hydropower plants, modernize and optimize them to increase their production capacity and, consequently, the value of the assets for Charbone and our shareholders, and to further assist Charbone with its deployment of a green hydrogen regional hub in Michigan and other locations.
Charbone plans to develop and construct modular and scalable green hydrogen production facilities in both Wisconsin and Michigan within the next few years. All plants provide land space to accommodate green hydrogen facilities or increase capacities by the automation and modernization of the facilities with newer hydro turbines and other technologies that would allow Charbone USA to produce power at one end and then to transmit its own power via utilities’ power lines, subject to a transmission fee, to a hydrogen production facility in a large industrial or urban center close to end users of such hydrogen.
The Northwoods management and operation teams have agreed to continue to perform their duties under Charbone’s ownership and will work and assist Charbone’s engineering team to implement optimisation, modernization, and automation projects at each of the plants.
“This acquisition consolidates Charbone’s strategy into the Midwest. These hydropower plants are well located to produce green hydrogen and deliver it to Detroit, the heart of automotive construction in North America, which is adopting more and more hydrogen technologies,” said Dave B. Gagnon, Chairman and CEO of Charbone. “Charbone’s strategy to produce its green hydrogen from modular and scalable facilities has been allowing us to discuss directly with local utilities and governments about distributed generation interconnection, rather than increasing costs for interconnection on transmission or distribution networks and adding costs to local utilities and customers”.
