DOE Earmarks $305 Million for Energy Storage in California Buildings

Nostromo Energy, provider of the IceBrick thermal energy storage (TES) technology, said the company has received a conditional commitment for a loan guarantee of up to $305.5 million from the U.S. Dept. of Energy's (DOE) Loan Programs Office (LPO). The proposed financing would be used by Nostromo for Project IceBrick, the first wide-scale deployment of Nostromo’s technology to reduce costs, emissions, and grid strain related to electricity for commercial cooling. IceBrick is a virtual power plant (VPP)-enabled thermal energy storage solution for commercial and industrial buildings. The funding if finalized will finance the deployment of IceBrick installations at as many as 193 commercial buildings and facilities across California. Several energy projects outside of the fossil fuel sector are moving to secure funding due to concerns the incoming Trump administration will try to pull back money earmarked for renewable energy and energy efficiency initiatives. Nostromo will also target installing at least 20% of these projects in disadvantaged communities, further improving the reliability of local systems. Project IceBrick has the potential to create more than 200 jobs, including more than 170 peak construction jobs. Over the 5-year construction period, the project will also create more than 874 annual job equivalents, including hiring installation contractors from disadvantaged communities when possible. The project could also enable California’s bulk power system to avoid up to 500,000 tons of CO2 emissions over its lifetime by installing a potential equivalent of 170 MW (450 MWh) of behind-the-meter, or on-site, storage capacity in buildings—while making power more reliable and affordable. [caption id="attachment_226532" align="alignnone" width="640"]

This image provides a detailed look at the Icebrick thermal energy storage system. Source: Nostromo Energy[/caption] Seventy-four percent of all electricity in the U.S. is consumed by buildings, with approximately half used to maintain thermal conditions, representing the largest load on both buildings and the power grid. California is the second-largest total energy consumer by state in the U.S. and has set a target of being a 60% clean energy grid by 2030 and 100% by 2045. Nostromo’s IceBrick ice-based TES technology reduces costs, emissions, and grid-congestion associated with the largest energy use in large commercial buildings––HVAC, or heating, ventilation, and air conditioning. The IceBrick systems charge when electricity is cheap and clean (when renewables are available) and discharge later for use when power is both expensive and polluting. The IceBrick storage cells are 100% U.S.-made from recycled or recyclable materials. All IceBrick systems are centrally managed for grid-integration as a VPP. They are compatible for new buildings or retrofitting on properties including hotels, offices, data centers, and hospitals. Host building owners can install IceBrick systems without any capital or other upfront costs under Nostromo’s “Energy Storage-as-a-Service” (ESaaS) program. Project IceBrick is the third VPP project that the LPO has announced and the first to use TES. The potential for VPPs to alleviate grid load is significant as air conditioning accounts for about 50% of U.S. electricity load during peak hours. VPPs are aggregations of electrified, grid-connected devices, including grid-interactive efficient buildings. They reduce utilities’ reliance on natural gas peaker plants and the strain on transmission and distribution infrastructure by intelligently time-shifting cooling loads to shave electricity demand from times of peak usage, when electricity is most carbon-intensive. As a VPP, Project IceBrick supports a higher rate of grid asset utilization, further tempering cost increases for Californians, who face some of the highest electricity bills in the nation. “We’re excited to help fulfill the vision of the DOE and LPO to make VPPs a key resource of the modern grid by serving up to 20% of its peak loads and making power more secure, affordable and clean,” said Yoram Ashery, CEO of Nostromo Energy. “This project will benefit not only commercial buildings, but also electricity consumers in general, create hundreds of good paying domestic jobs, and reduce emissions from gas peaker plants which mostly impact disadvantaged communities around them.” The loan guarantee for Project IceBrick would be issued under the Title 17 Clean Energy Financing Program, of the Energy Policy Act of 2005. Financing for the first Project IceBrick will be provided, subject to the outstanding required approval, by the DOE guaranteed loan of up to $305.5 million (inclusive of $1.85 million of capitalized interest), and in addition project equity, for which a term sheet has been executed with a private equity management firm, and investment tax credits (ITC). Nostromo has recently completed the sale of the ITC earned on its first IceBrick system. In conjunction with Project IceBrick, Independence Point Securities is the exclusive financial advisor to Nostromo Energy. This conditional commitment indicates DOE’s intent to finance the project, however, DOE must complete an environmental review, and the company must satisfy certain technical, legal, environmental, commercial, and financial conditions before the DOE can decide whether to enter into definitive financing documents and fund the loan guarantee. For more information, review the DOE’s announcement blog. —POWER edited this content, which was contributed by the media relations team for Nostromo Energy.