In this post, I will explore how the DOE Loan Programs Office (LPO) is supporting U.S. energy storage projects.
U.S. energy storage capacity will need to scale rapidly over the next two decades to achieve the Biden-Harris Administration’s goal of achieving a net-zero economy by 2050. DOE’s recently published Long Duration Energy Storage (LDES) Liftoff Report found that the U.S. grid may need between 225 and 460 gigawatts of LDES by 2050, requiring $330 billion in capital on the same timeline. These figures are in addition to the nation’s utility scale short duration storage needs, which will be about 160 gigawatts by 2050, according to the reference case from the U.S. Energy Information Administration’s 2023 Annual Energy Outlook.
As we discuss in our Tech Talk, energy storage encompasses an array of technologies that enable energy produced at one time, such as during daylight or windy hours, to be stored for later use. LPO can finance both energy storage manufacturing and supply chain projects as well as deployment of a range of storage technologies, including flywheel, mechanical, electrochemical, thermal, and chemical storage technologies.
LPO can support these technologies through its loan programs in a few different ways. Title 17 Clean Energy Financing Program’s Innovative Energy and Innovative Supply Chain category (Section 1703) can provide financing for deployment of storage technologies, or supply chain projects supporting energy storage, that use innovative technologies or processes; if qualifying storage projects receive meaningful support from a State Energy Financing Institution, they do not need to be innovative. Separately, the Title 17 Energy Infrastructure Reinvestment (Section 1706) category provides financing for eligible storage technologies deployed in projects that retool, repower, repurpose, or replace energy infrastructure that has ceased operations or to enable operating energy infrastructure to avoid, reduce, utilize, or sequester air pollutants or anthropogenic emissions of greenhouse gases. Finally, the Tribal Energy Financing program can support energy storage technologies in eligible projects to federally recognized tribes and qualified tribal energy development organizations.
As of the end of June 2023, requested financing from LPO for energy storage projects via active loan applications totaled nearly $8 billion. For more current details, view LPO’s Monthly Application Activity Report, which explains the level of interest from applicants for LPO financing and what technology sectors have been most actively engaged with LPO.
ENERGY STORAGE – ADVANCED CLEAN ENERGY STORAGE
In June 2022, DOE announced it closed on a $504.4 million loan guarantee to the Advanced Clean Energy Storage project in Delta, Utah — marking the first loan guarantee for a new clean energy technology project from LPO since 2014. The loan guarantee will help finance construction of the largest clean hydrogen storage facility in the world, capable of providing long-term low-cost, seasonal energy storage, furthering grid stability. The project is expected to create up to 400 construction and 25 operations jobs, advancing President Biden’s climate and clean energy deployment goal of net zero emissions by 2050.
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 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 until needed. This will help to seasonally balance supply with demand and further stabilize the grid.
Energy Storage News Roundup
- US green hydrogen hub will put long-haul energy storage to the test (Canary Media)
- LPO loan commitments for Utah hydrogen storage project (Axios)
- DOE closes on $504M loan guarantee for Utah hydrogen storage project with 150 GWh seasonal capacity (Utility Dive)
- Pathways to Commercial Liftoff: Long Duration Energy Storage Webinar (U.S. Department of Energy)