DOE closes on $504M loan to fund clean hydrogen storage project in Utah
The U.S. Department of Energy (DOE) closed on a $504.4 million loan guarantee to help finance the construction of the largest clean hydrogen storage facility in the world, the Advanced Clean Energy Storage project in Utah.
This is the first loan guarantee for a new clean energy technology project from DOE’s Loan Programs Office (LPO) since 2014.
“Since President Biden’s first day in office, DOE has made it a priority to leverage the potential of the Loan Programs Office to fund emerging technologies that will deploy clean and reliable energy to Americans,” U.S. Secretary of Energy Jennifer Granholm said. “Accelerating the commercial deployment of clean hydrogen as a zero-emission, long-term energy storage solution is the first step in harnessing its potential to decarbonize our economy, create good-paying clean energy jobs and enable more renewables to be added to the grid.”
The Advanced Clean Energy Storage project in Delta, Utah, will combine 220 megawatts of alkaline electrolysis with two massive 4.5-million-barrel salt caverns to store clean hydrogen. Advanced Clean Energy Storage will capture excess renewable energy when it is most abundant, store it as hydrogen, then deploy it as fuel for the Intermountain Power Agency’s (IPA) IPP Renewed Project — a hydrogen-capable gas turbine combined cycle power plant.
The $504 million loan was closed on by Mitsubishi Power Americas and Magnum Development, who will develop the project.
“This joint venture is historic for Mitsubishi Power Americas and the future of global hydrogen deployment,” Bill Newsom, president and CEO of Mitsubishi Power Americas, said. “We’re proud to partner with Magnum Development and provide the hydrogen equipment to further advance carbon-free hydrogen as a cornerstone of our future energy supply and help chart the path towards net zero. This project sets the industry gold standard for hydrogen deployment, helping to combat the impacts of climate change and advance human prosperity.”
The development and operation of the Advanced Clean Energy Storage hub will create up to 400 local construction jobs throughout the 3-year construction cycle. Further, it will employ a projected 25 full-time operations and maintenance personnel.
“Magnum Development has enjoyed a synergistic relationship with the City of Delta and Millard County since 2008,” Craig Broussard, CEO of Magnum Development and ACES Delta, said. “In addition, royalties paid from our operations go to our mineral estate partner, the Utah School and Institutional Trust Lands Administration, to provide funding for the Utah educational system. Over the next three decades, significant taxes and royalties will flow from this initial phase of green hydrogen development at our site.”
As of June 1, the LPO has attracted more than 70 applications for projects in 24 states, totaling nearly $79 billion in requested loans and loan guarantees.
