teaming up

Australian renewable energy company taps Houston partner for first US project

GGS Energy and Vast Renewables Limited announced their agreement to work together on Project Bravo, Vast’s first deployment in the U.S. Photo via vast.energy

Houston-based project developer focused on energy transition has signed a new agreement to work on a synthetic fuels project in the Southwest United States.

GGS Energy and Australian company, Vast Renewables Limited, a renewable energy company specializing in concentrated solar thermal power systems, announced their agreement to work together on Project Bravo, Vast’s first deployment in the U.S. The company's CSP v3.0 technology will be deployed to create carbon-free heat and electricity for a co-located refinery that will generate green methanol and/or electrically powered sustainable aviation fuel, or e-SAF.

“CSP has the potential to unlock low-cost green fuel production in the U.S., and it can play a significant role in helping decarbonise shipping and aviation," Craig Wood, CEO of Vast, says in a news release. "We are delighted to have GGS Energy as a development partner to advance our plans in the U.S., which is a key market for Vast’s technology.”

Vast is currently building Solar Methanol 1, a CSP-powered green methanol reference plant that will be located in Australia at the Port Augusta Green Energy Hub. Project Bravo will build upon that plant here in the U.S. The location is still to be decided but will be in the Southwestern part of the country.

GGS Energy, which is founded in 2020 as a subsidiary of Glacier Global Partners that was formed in 2020, has infrastructure development experience across technologies, including utility scale CSP, coal-to-liquids projects, PV solar, wind, and more.

“GGS Energy is excited to partner with Vast and work to develop Project Bravo," Tommy Soriero from GGS Energy says in the release. "This collaboration marks a significant step toward a sustainable future, harnessing advanced technology to produce low-cost green fuels. We are eager to combine our expertise and resources to ensure the success and impact of future innovative projects starting with Project Bravo.”

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A View From HETI

Lawyers for a Tesla shareholder who sued to block the pay package contended that shareholders who had voted for the 10-year plan in 2018 had been given misleading and incomplete information. Photo via cdn.britannica.com

For a second time, a Delaware judge has nullified a pay package that Tesla had awarded its CEO, Elon Musk, that once was valued at $56 billion.

Last week, Chancellor Kathaleen St. Jude McCormick turned aside a request from Musk's lawyers to reverse a ruling she announced in January that had thrown out the compensation plan. The judge ruled then that Musk effectively controlled Tesla's board and had engineered the outsize pay package during sham negotiations.

Lawyers for a Tesla shareholder who sued to block the pay package contended that shareholders who had voted for the 10-year plan in 2018 had been given misleading and incomplete information.

In their defense, Tesla's board members asserted that the shareholders who ratified the pay plan a second time in June had done so after receiving full disclosures, thereby curing all the problems the judge had cited in her January ruling. As a result, they argued, Musk deserved the pay package for having raised Tesla's market value by billions of dollars.

McCormick rejected that argument. In her 103-page opinion, she ruled that under Delaware law, Tesla's lawyers had no grounds to reverse her January ruling “based on evidence they created after trial.”

What will Musk and Tesla do now?

On Monday night, Tesla posted on X, the social media platform owned by Musk, that the company will appeal. The appeal would be filed with the Delaware Supreme Court, the only state appellate court Tesla can pursue. Experts say a ruling would likely come in less than a year.

“The ruling, if not overturned, means that judges and plaintiffs' lawyers run Delaware companies rather than their rightful owners — the shareholders,” Tesla argued.

Later, on X, Musk unleashed a blistering attack on the judge, asserting that McCormick is “a radical far left activist cosplaying as a judge.”

What do experts say about the case?

Legal authorities generally suggest that McCormick’s ruling was sound and followed the law. Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware, said that in his view, McCormick was right to rule that after Tesla lost its case in the original trial, it created improper new evidence by asking shareholders to ratify the pay package a second time.

Had she allowed such a claim, he said, it would cause a major shift in Delaware’s laws against conflicts of interest given the unusually close relationship between Musk and Tesla’s board.

“Delaware protects investors — that’s what she did,” said Elson, who has followed the court for more than three decades. “Just because you’re a ‘superstar CEO’ doesn’t put you in a separate category.”

Elson said he thinks investors would be reluctant to put money into Delaware companies if there were exceptions to the law for “special people.”

What will the Delaware Supreme Court do?

Elson said that in his opinion, the court is likely to uphold McCormick's ruling.

Can Tesla appeal to federal courts?

Experts say no. Rulings on state laws are normally left to state courts. Brian Dunn, program director for the Institute of Compensation Studies at Cornell University, said it's been his experience that Tesla has no choice but to stay in the Delaware courts for this compensation package.

Tesla has moved its legal headquarters to Texas. Does that matter?

The company could try to reconstitute the pay package and seek approval in Texas, where it may expect more friendlier judges. But Dunn, who has spent 40 years as an executive compensation consultant, said it's likely that some other shareholder would challenge the award in Texas because it's excessive compared with other CEOs' pay plans.

“If they just want to turn around and deliver him $56 billion, I can't believe somebody wouldn't want to litigate it,” Dunn said. “It's an unconscionable amount of money.”

Would a new pay package be even larger?

Almost certainly. Tesla stock is trading at 15 times the exercise price of stock options in the current package in Delaware, Morgan Stanley analyst Adam Jonas wrote in a note to investors. Tesla's share price has doubled in the past six months, Jonas wrote. At Monday’s closing stock price, the Musk package is now worth $101.4 billion, according to Equilar, an executive data firm.

And Musk has asked for a subsequent pay package that would give him 25 percent of Tesla's voting shares. Musk has said he is uncomfortable moving further into artificial intelligence with the company if he doesn't have 25 percent control. He currently holds about 13 percent of Tesla's outstanding shares.

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