Trafigura’s global success is founded on our ability to evolve traditional supply chains to develop new markets. This expertise is profoundly relevant in today’s shifting energy landscape.
We are building our presence and position in the fast-evolving power and renewables sector through a series of strategic, targeted engagements.
Power and renewables trading
Our power and renewables trading desk builds on our capabilities and understanding of other energy markets.
We are establishing an active presence by trading key derivative contracts, primarily in US and European markets. This activity complements growth in physical transactions as demand develops for merchant and intermediary services in electricity markets.
Investing in renewable energy
Nala Renewables is a newly-formed joint venture between Trafigura and global institutional fund manager IFM Investors, that aims to develop solar, wind and power storage projects globally, with a total generation capacity of 2-gigawatts over the next five years.
The company will have immediate access to 250-megawatts of Trafigura Group renewable energy projects currently in the pipeline, and will build on this existing portfolio by investing in renewable projects and companies at varying stages of development. It will also build and operate projects adjacent to the Trafigura Group’s mining, port and smelting infrastructure assets worldwide and the renewable energy generated will be used to power some of those facilities.
Nala Renewables will also provide an opportunity for Trafigura and selected third-party investors to invest into further renewable projects via the Renewables Fund of our investment subsidiary Galena Asset Management.
Through our part-ownership of renewable energy developer PASH Global, Trafigura also has a separate investment in a new 50-megawatt solar photovoltaic project in Mali. As West Africa’s largest solar farm, it will provide green electricity to over 91,000 households, saving nearly 52,000 metric tonnes of carbon emissions every year.
Development is underway for large-scale installations of photovoltaic panels at energy-intensive Trafigura investments and owned assets, including mines and logistics terminals. Metal processing is one of the most energy-intensive of all industrial activities. Trafigura's zinc and lead smelting operation Nyrstar is investing in large-scale batteries and renewable energy generation at its global network of plants.
It is developing over 100-megawatts of sustainable energy for its own operations, with surplus power to be sold back to the grid, assisting in the expansion of its trading business.
Investing in disruptive renewable technologies
Trafigura has created a venture capital-type fund to invest in a number of early-stage disruptive renewable technologies including hydrogen power and alternative fuels, renewable energy storage technologies and carbon utilisation.
Trafigura will support these companies by leveraging its expertise and global network, all in an effort to bring their technologies to market at scale and help accelerate the energy transition.
Strategic investments in the hydrogen sector
Hydrogen, especially green hydrogen, which is produced from renewable energy sources, has significant potential to accelerate the energy transition as the world moves towards lower-carbon economies. Its greater energy density-to-weight ratio makes it more suitable for higher energy industrial uses than the lithium-ion based technologies that feature in many of today’s electric vehicles.
Hydrogen fuel-cell powered electric engines also benefit from higher efficiencies than internal combustion engines and the market for this type of technology has grown substantially in recent years. In addition, we see potential applications for hydrogen in running off-grid mines and producing chemicals.
We have taken an equity stake in start-up Hy2gen. The German-based company brings together specialists with experience of developing, building and operating plants for the production of green hydrogen and hydrogen-based e-fuels, offering better ways to achieve CO2-free or CO2 neutral fuels and storage solutions. The first plants will be built in Canada, followed by other plants in France, Mexico, Norway and South Africa. The company aims to become a leader in the hydrogen and e-fuels market for mobility and industry, areas where it is currently proving difficult to significantly reduce emissions.
Trafigura has also made significant investments with H2 Energy Holding AG, a business innovator in green hydrogen solutions for use in heavy duty transport. In partnerships with large industrial players and market leaders such as Hyundai, Alpiq and Linde, H2 Energy are the first in the world to deliver fuel cell trucks to commercial users and to create an ecosystem based on green hydrogen, while operating with a strong commercial focus. The trucks are already in operation for large transporters and retailers in Switzerland.
We have committed to invest an initial USD62 million, with USD20 million as capital injection into H2 Energy Holding AG to further support the development of the production, storage and distribution of green hydrogen for refuelling stations and industrial customers. The remaining part of the investment will be provided to seed and fund the development of a 50:50 joint venture based in Zurich that will roll out green hydrogen-based ecosystems and to invest in hydrogen infrastructure and hydrogen application-related projects across Europe, excluding Switzerland.
Investing in energy storage
Efficient energy storage has a critical role in the low carbon economy. Effective storage systems are essential in integrating intermittent renewable energy into grids by aligning peaks and troughs in power generation with changing patterns of demand. Our strategic investment in Quidnet Energy, a clean energy business, is helping to deliver a cost-effective alternative to hydro-pump storage, the only existing long-duration storage solution at the moment. Quidnet’s geomechanical pumped storage (GPS) system is based on hydro-power principles. It pumps water underground to be stored in rock formations at high pressure. At times of high demand this is released to the surface, where it powers electricity turbines.