Energy Dept. Finalizes Loan Guarantee for Green H2 Storage, Power Project

By Christian Roselund

On 8 June, the U.S. Department of Energy (DOE) finalized its first loan guarantee in nearly 10 years, providing backing for a $504 million loan to support a green hydrogen project in Utah. The Advanced Clean Energy Storage (ACES) project will utilize 220 megawatts of electrolyzers powered by renewable energy to generate hydrogen, store it in a salt cavern, and supply it to the IPP Renewed power plant. This new power plant will burn a mix of hydrogen and natural gas, transitioning to 100% hydrogen, to help supply electricity to the city of Los Angeles’ municipal utility.

ACES/IPP was the first large green hydrogen-burning electricity project in the United States, meaning that the hydrogen that it uses will be generated via electrolysis powered by renewable energy. Since its announcement multiple other utilities have announced their own projects to produce and burn green hydrogen in modified versions of natural gas-fired power plants. All of these projects will burn a mixture of natural gas and hydrogen, with many planning to transition to pure hydrogen.

As such, the ACES/IPP project provides a potential solution to one of the greatest challenges of the transition to renewable energy: how to supply zero-carbon power during the Dunkelflaute, the extended periods of little wind or sun.

DOE’s Loan Programs Office backs private loans through its loan guarantee program in three areas: innovative clean energy projects, advanced transportation projects, and tribal energy projects. Under the Biden Administration, LPO has received applications for more than 70 projects in 24 state totaling $79 billion in requests. Only one other project has yet reached the stage of a conditional commitment: a $107 million loan guarantee for a facility to produce graphite-based anode materials for EV batteries.