Green hydrogen project: Term sheet with Softbank subsidiary

Elixir Energy (ASX:EXR) has today announced a key step forward for its green hydrogen project.

EXR reports it has executed a term sheet with Softbank subsidiary, SB Energy, over the co-development of the Gobi H2 green hydrogen project in the South Gobi region of Mongolia.

This term sheet builds on the Memorandum of Understanding (MOU) signed by the parties last June to progress investigations into the project's feasibility.

The Term Sheet provides a pathway to a formal joint development agreement and a 50/50 joint venture once a FEED (Front End Engineering and Design) entry decision is made regarding a green hydrogen pilot project.

EXR and SB Energy aim to reach this FEED stage by the middle of this year.

We note that SB Energy is the ​​vehicle in which Softbank invests in renewable energy assets.

It has a renewable energy asset portfolio that is largely based in Japan, along with the operational 50 MW Tsetsii Wind Farm located in the Gobi region of Mongolia. As a renewable energy resource, SB Energy’s wind farm could be used to produce green hydrogen energy.

Mongolia’s Gobi Desert is blessed with abundant renewable energy sources, with plenty of sunlight for solar energy and the strong winds required for wind farms. This makes it a tier one location globally for green hydrogen production.

Renewable energy is vital in producing green hydrogen energy, which is produced by electrolysing water using renewable energy and which produces zero carbon dioxide emissions, as compared to its less environmentally friendly counterparts, blue and grey hydrogen, that are produced using fossil fuels.

EXR’s MD Neil Young says that the company looks forward to progressing the partnership with SB Energy “in the months ahead”, so we will be keeping an eye out for any developments on this front.