LPO offers $504M loan guarantees for Utah project
The Department of Energy's Loan Programs Office on Tuesday made a conditional commitment to provide up to $504.4 million in loan guarantees for the massive Advanced Clean Energy Storage hub in Utah.
Why it matters: The project aims to develop 100 metric tonnes of green hydrogen per day, which would then be stored in two enormous salt caverns, each capable of storing 150 gigawatt-hours (GWh) of energy. In short: gigantic, long-duration energy storage.
The details: The conditional loan guarantees were made to Advanced Clean Energy Storage I, Mitsubishi Power Americas, Magnum Development and Haddington Ventures.
- The hub, announced in 2019, "is in the final stages of debt and equity closing," Mitsubishi says.
- Haddington Ventures — a financial adviser for the hub and an equity sponsor of Magnum Development — is securing another $650 million through its Equity Syndication Program.
Driving the news: The hub, if successful, will supply hydrogen to the IPP Renewed Project, an 840-megawatt (MW) combined-cycle power plant being built by the Intermountain Power Agency.
- The project developers hope the plant will run on a 30%/70% blend of hydrogen and natural gas starting in 2025, and transition to 100% hydrogen by 2045.
By the numbers: The project, if successful, promises to be hundreds of times larger than the current biggest energy storage projects in the U.S.
- Moss Landing in California has capacity of 400 MW and can store 1,600 megawatt-hours (MWh), according to data provided by American Clean Power.
- Manatee Energy Storage Center in Florida has storage capacity of 409 MW and can hold 900 MWh.
- The Blythe and McCoy energy storage projects in California each have capacity of 230 MW and can store 920 MWh.
Between the lines: In backing the hydrogen hub, DOE is hoping to help bring down the cost of green hydrogen.
Yes, and: The Biden administration's Infrastructure Investment and Jobs Act, signed by President Biden in November, includes $8 billion for Regional Clean Hydrogen Hubs.
What they're saying: The project provides a potential answer to seasonal imbalances in renewable energy generation. The Intermountain Power Project, for example, typically has too much renewable energy during the spring — forcing grid operators to curtail generation — and too little other times of the year.
- "Advanced Clean Energy Storage would convert that excess renewable energy to hydrogen that can be stored until needed," LPO director Jigar Shah said in a statement. "This will help to seasonally balance supply with demand and further stabilize the grid."