Apex CEO discusses renewable shift to ERCOT, MISO and green hydrogen expansion

Apex Clean Energy expects to concentrate on ERCOT and MISO in both the shorter term and longer term as some of its other core markets have started to struggle, while continuing its expansion into green hydrogen, said the company’s CEO Mark Goodwin in an interview with NPM.

The Charlottesville, Virginia is shifting gears away from PJM due to its ongoing queue reform and SPP’s challenging queue, despite Apex building up a presence in each of those markets.

According to NPM data, Apex is already the sixth-ranked developer in ERCOT with 4.72 GW and 24 projects in the queue. This includes the 600 MW Young Wind project, 500 MW White Mesa Wind project, and 300 MW El Sauz Ranch wind project, all of which have reached the construction phase. Apex is developing White Mesa Wind on a behalf of consortium including NextEra Energy and Ontario Teachers Pension Plan, and building El Sauz Ranch on behalf of JERA Americas.

Apex is also starting to make strides in the burgeoning green hydrogen market. Earlier this year, Apex announced a partnership with Ares Management, EPIC Midstream and the Port of Corpus Christi for a 1 GW-scale green fuels hub on the Texas Gulf Coast. This multifaceted project will include hydrogen production, storage, transportation, and export operations including a newly constructed, dedicated pipeline and green fuels hub to be located at the Corpus Christi port. Goodwin says the project will “produce green fuel in volumes not yet seen in the US with additional scale possible by the end of the decade.”

This project follows Apex’s close on what Goodwin says is the largest green hydrogen PPA in the US, a 345 MW agreement for a project in Virginia being co-developed by Apex and Plug Power.

Goodwin says Apex’s entrance into the hydrogen market was a “natural evolution” for the firm given the “overlap in our existing expertise from transmission to new markets to procurement.” He says the firm’s interest in hydrogen was born out of ongoing transmission congestion issues the firm is facing in top markets like PJM.

“Green fuels represent an opportunity to deliver renewable energy projects without being constrained by the grid,” Goodwin said.

Supply Chain Issues

Apex has not been immune from supply challenges facing the industry resulting in project delays. However, Goodwin says he does applaud the Biden Administration’s efforts to get solar projects back on track by pausing tariffs for two years as well as its encouragement for domestic manufacturing. Goodwin says Apex is currently engaged with major suppliers both aboard and in the US to “restore near-term project plans” and anticipates more solar manufacturing in the US moving forward.

The onshore wind sector, separately, is being directly affected by a recent COVID shutdown in Shanghai. Beyond this, Goodwin says the turbine supply market is being hit by “significant inflation.”

Goodwin says the ramification for these supply issues is “simple;” he anticipates fewer MW of clean energy will be built in the remainder of this year as well as 2023. However, as ballooning project costs are getting “baked in” to project capital, Goodwin says Apex is finding that power purchasers are moving forward anyway.

“Many power buyers have committed to renewable energy targets that will come due in the next several years and many purchasers’ energy usage is growing,” Goodwin said. “So, we are seeing continued demand for renewable power despite challenging overall market conditions.”

As supply issues threaten many projects across the industry, Goodwin says Apex is “actively pursuing” strong projects for acquisition as the company pursues “several strategies” for managing cost increases in its own projects including negotiating longer-term deals. In the meantime, Goodwin says he is “optimistic” the supply chain will adjust to ongoing challenges and normalize the market moving forward.

“We’re already seeing some light at the end of the tunnel on a number of these issues and I’m hopeful we’ll see a better 2023 than some currently anticipate,” Goodwin said. “Ultimately, when we reemerge from these supply chain issues, we’ll be in a strong position to continue fulfilling market demand for these projects.”

*This story was originally published exclusively for NPM subscribers last month.


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