Green Hydrogen Startup NovoHydrogen Raises $20 Million
Diversified clean energy company Modern Energy announced today a $20 million equity commitment to Colorado-based green hydrogen developer NovoHydrogen, with proceeds from the investment to support the company’s growth and green hydrogen project development.
Colorado-based NovoHydrogen, founded in 2021, develops onsite and near-site green hydrogen projects for its customers across a variety of sectors. 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.
Hydrogen is viewed as one of the key building blocks of the transition to a cleaner energy future, particularly for sectors with difficult to abate emissions, in which renewable energy solutions such as wind or solar are less practical.
Around 10 million metric tonnes (MMT) of hydrogen are currently produced in the U.S., and approximately 94 million metric tonnes globally, although the vast majority is extracted using fossil fuels, which create pollutants and GHG emissions. U.S. hydrogen production, for example, is primarily based on extraction from natural gas through steam methane reforming, and currently generates around 100 million tonnes of greenhouse gas emissions per year.
According to the company, the new 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.
Matt McMonagle, CEO of NovoHydrogen said:
“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.”
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, one of seven selected by the Department of Energy to help form a national hydrogen network.
Chris Hamilton, Chief Investment Officer at Modern Energy, said:
“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. 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.”