Illustrated graphic of Advanced Clean Energy Storage Project

With nearly 80 active applications across a variety of technology sectors submitted since March 2021, the Department’s Loan Programs Office (LPO) has been picking up steam. Today it is making two important announcements that highlight the level of interest in the market for loan guarantees for innovative energy projects.

Advanced Clean Energy Storage Conditional Commitment

First, LPO offered a conditional commitment for a $504.4M loan guarantee to the Advanced Clean Energy Storage Project, which would be a first-of-its-kind clean hydrogen production and storage facility capable of providing long-term seasonal energy storage. The facility in Delta, Utah, will combine alkaline electrolysis with salt cavern storage for grid scale energy conversion and storage using hydrogen as the energy carrier.

The Project has the potential to build on LPO’s track record of catalyzing innovative energy sectors and accelerating the clean energy transition in several ways:

  • Advanced Clean Energy Storage could accelerate the commercial deployment of the clean hydrogen sector as the 220-megawatt electrolyzer bank would be one the largest deployments in the world. While industries are beginning to implement clean hydrogen to reduce emissions, many hurdles remain for deploying it at scale. According to DOE’s Hydrogen and Fuel Cell Technology Office, hydrogen from renewable energy costs about $5 per kilogram. Achieving the DOE Hydrogen Shot’s 80% cost reduction goal can unlock new markets for hydrogen, including energy storage. Additionally, DOE is working to implement the Infrastructure Investment and Jobs Act’s hydrogen initiatives, which includes $8 billion for Regional Clean Hydrogen Hubs that will create jobs to expand use of clean hydrogen in the industrial sector and beyond.    
  • Advanced Clean Energy Storage could help reduce curtailment of renewable energy in the Western United States by providing long-term energy storage that is currently not available, supporting DOE’s Long-Duration Storage Shot. Participants in the existing Intermountain Power Project (IPP) in Utah have excess supplies of renewable energy, particularly in the spring. This results in the curtailment of renewable energy during those months and a shortage of renewable energy during subsequent months. Advanced Clean Energy Storage would convert that excess renewable energy to hydrogen that can be stored and until needed. This will help to seasonally balance supply with demand and further stabilize the grid.
  • Advanced Clean Energy Storage will convert and store excess electricity to provide the hydrogen fuel to the Intermountain Power Agency’s IPP Renewed Project, replacing a coal fired power plant with a hybrid Combined Cycle Gas Turbine capable of operating on hydrogen fuel. By converting and storing excess electricity via hydrogen to fuel the IPP Renewed Project, Advanced Clean Energy Storage will be able to provide long duration, seasonal storage necessary to support the increasing penetration of intermittent renewable electricity generation. The IPP Renewed Project is scheduled for start-up in 2025 when existing coal-fueled generating units at the site shut down and will be operating on a 30% hydrogen blended fuel (provided by Advanced Clean Energy Storage). The IPP Renewed Project will use increasing amounts of hydrogen as feedstock, eventually transitioning to 100% hydrogen by 2045.

In addition to its potential impact on the Western United States, Advanced Clean Energy Storage is expected to benefit Utah by creating up to 400 construction and 25 operations jobs and could help catalyze long-term job opportunities and transition the state to a new, clean energy economy for the future.

While this conditional commitment demonstrates the Department’s intent to finance the project, several steps remain, and certain conditions must be satisfied before the Department issues a final loan guarantee.

Making it Easier to Navigate Innovative Clean Energy Loan Guarantees

In addition to the Advanced Clean Energy Storage conditional commitment, LPO is issuing updates to the Title 17 loan guarantee program solicitations, which builds on its work to be more accessible to borrowers and address legislative changes from the Energy Act of 2020.

To help applicants better navigate the Title 17 loan guarantee program, LPO is modifying the names of each solicitation under the umbrella of “Innovative Clean Energy.” Moving forward, the Renewable Energy and Efficient Energy Projects Solicitation will be called the Innovative Clean Energy Solicitation to better reflect its scope. The Innovative Clean Energy Solicitation is applicable to projects from a variety of categories under Title 17, including efficient electrical generation, transmission, and distribution technologies or carbon capture, utilization, and sequestration practices and technologies that meet the Title 17 eligibility and programmatic requirements but would not otherwise qualify under the Innovative Clean Energy: Nuclear Solicitation (formerly named the Advanced Nuclear Energy Projects) or the Innovative Clean Energy: Fossil Solicitation (formerly named the Advanced Fossil Energy Projects).

For Innovative Clean Energy projects, up to $3 billion is available and, consistent with the Energy Act of 2020 and existing implementation plans, expressly lists the following Title 17 technology categories:

  • Renewable energy systems
  • Hydrogen fuel cell technology for residential, industrial, or transportation applications
  • Carbon capture, utilization, and sequestration practices and technologies including agricultural and forestry practices that store and sequester carbon and synthetic technologies to remove carbon from the air and oceans
  • Efficient electrical generation, transmission, and distribution technologies
  • Efficient end-use energy technologies
  • Production facilities for the manufacture of fuel-efficient vehicles or parts of those vehicles, including electric drive vehicles and advanced diesel vehicles
  • Pollution control equipment
  • Energy storage technologies for residential, industrial, transportation, and power generation applications
  • Technologies or processes for reducing greenhouse gas emissions from industrial applications, including iron, steel, cement, and ammonia production, hydrogen production, and the generation of high-temperature heat.

For Innovative Clean Energy: Nuclear projects, $10.9 billion is available, with $2 billion of that amount specifically for front-end nuclear projects. Consistent with the Energy Act of 2020, the solicitation expressly includes projects that manufacture nuclear supply components for advanced nuclear reactors as “advanced nuclear energy facilities” and lists the following technology categories for projects associated with nuclear energy:

  • Advanced nuclear energy facilities, including manufacturing of nuclear supply components for advanced nuclear facilities;
  • Hydrogen fuel cell technology for residential, industrial, or transportation applications;
  • Efficient electrical generation, transmission, and distribution technologies;
  • Efficient end-use energy technologies;
  • Energy storage technologies for residential, industrial, transportation, and power generation applications; or
  • Technologies or processes for reducing greenhouse gas emissions from industrial applications, including iron, steel, cement, and ammonia production, hydrogen production, and the generation of high-temperature heat.

For Innovative Clean Energy: Fossil projects, $8.5 billion is available. Consistent with the Energy Act of 2020 and existing implementation plans, the solicitation now expressly lists the following technologies categories:

  • Advanced fossil energy technology;
  • Hydrogen fuel cell technology for residential, industrial, or transportation applications;
  • Carbon capture, utilization, and sequestration practices and technologies including agricultural and forestry practices that store and sequester carbon and synthetic technologies to remove carbon from the air and oceans;
  • Efficient electrical generation, transmission, and distribution technologies;
  • Efficient end-use energy technologies;
  • Production facilities for the manufacture of fuel-efficient vehicles or parts of those vehicles, including advanced diesel vehicles;
  • Pollution control equipment;
  • Energy storage technologies for residential, industrial, transportation, and power generation applications;
  • Refineries, meaning facilities at which crude oil is refined into gasoline; or
  • Technologies or processes for reducing greenhouse gas emissions from industrial applications, including iron, steel, cement, and ammonia production, hydrogen production, and the generation of high-temperature heat.

In addition to generally streamlining the solicitations, additional improvements include:

  • Clarifying the information requests for Part I and Part II and aligning the timing of information requests with the timing of the review, including moving the detailed financial information requirements from Part I to Part II of the application. Practically, this means that the Part I application will generally focus on whether a project is from an eligible category, employs innovative technology, and avoids, reduces, or sequesters greenhouse gas emissions or air pollutants.
  • Capturing the technology eligibility for projects that employ elements of Commercial Technologies in combination with New or Significantly Improved Technologies.
  • Clarifying that supply chain projects (i.e., projects involving the manufacturing of components with end-uses that fall within one or more of the eligible categories under the solicitations) may be eligible under the applicable solicitation.
  • Capturing policy factors related to job quality, responsible contractor standards, workforce diversity, equity, inclusion, and accessibility goals, and underserved or disadvantaged community hiring goals included in recent Executive Orders.
  • Capturing the regional variation exemption for deployment of same or similar technologies, per the Energy Act of 2020.

Today’s announcements reflect LPO’s forward progress and its efforts to continue working with the private sector to advance commercial deployments of innovative clean energy technologies in the United States.

Jigar Shah
Jigar Shah, Director of the Loan Programs Office
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