The U.S. Department of Energy’s (DOE) Loan Programs Office (LPO) has financed more than $88 billion of innovative large-scale energy projects to date, casting a far-reaching net across a wide range of technologies from coast to coast, in hopes of hauling in a few winners that will spur the energy transition along.
Deemed the “Biden Energy Slush Fund” in The Wall Street Journal, the LPO has dabbled in everything from biofuels to hydrogen production, from onshoring electric vehicle wiring manufacturing to disseminating distributed energy resources.
Project IceBrick, LPO’s latest endeavor, is unique even by its standards.
Not just another brick in the wall
This week, LPO announced a conditional commitment to IceBrick Energy Assets I, LLC, a subsidiary of Nostromo Energy, for a loan guarantee of up to $305.54 million (including $303.69 million of principal and $1.85 million of capitalized interest) to finance Project IceBrick.
Project IceBrick is a virtual power plant (VPP) of up to 193 cold thermal energy storage (TES) installations at commercial buildings across California. The TES cells, a technology Nostromo has been touting since 2018 and the main component of the IceBrick systems, will be manufactured for this project and future U.S. installations entirely domestically by contractors in Texas, Iowa, and California.
The technology is hilariously simple. Basically, it utilizes ice to cool buildings rather than relying solely on air conditioning.
Project IceBrick would provide customers with efficiency as a service by freezing a water-based solution during prime solar generation hours when electricity is at its cheapest and cleanest. The IceBrick system would store and later use the ice to support cooling of the building during hours of peak power demand when electricity production is dirtiest and most expensive.
Nostromo says its nonflammable (duh) IceBrick cells are suitable for both new buildings and retrofits, and their compact and modular design makes them easy to configure into spaces of all sizes.
The company’s Cirrus software platform enables the IceBrick systems to operate as a VPP by orchestrating multiple energy assets to function in concert with one other or participating as individual assets. The resulting flexibility of this load shift technology provides resilient power capacity and serves as a load-stabilizing complement to intermittent clean energy assets, Nostromo contends. Project IceBrick also supports a higher rate of grid asset utilization, tempering electricity costs in a state facing some of the highest electricity bills in the nation.
Nostromo asserts its IceBrick systems would allow California’s bulk power system to avoid up to 500 thousand tons of CO2 emissions over the project’s lifetime. Nostromo plans to share with its customers a portion of the expected cost savings attributable to this aggregate shift in building cooling load and intends to earn additional revenue by having the VPP participate in wholesale energy and capacity markets. At full scale, the project could provide the equivalent of approximately 170 MW (450 MWh) of behind-the-meter storage capacity for hotels, offices, data centers, and other commercial buildings.
Impact and next steps
DOE’s LPO believes the project can create more than 200 jobs, including at least 170 peak construction jobs. Over its five-year construction period, Nostromo Energy says it will create more than 870 annual job equivalents.
LPO’s investment supports the Biden-Harris Administration’s Justice40 Initiative, which sets a goal that 40% of the overall benefits of certain federal investments in clean energy and other areas flow to disadvantaged communities marginalized by underinvestment and overburdened by pollution. Some energy justice advocates fear Justice40 will be among the first items on the chopping block under the incoming Trump Administration, which could butcher provisions of the Inflation Reduction Act.
Project IceBrick is the third VPP project LPO has announced and the first to use cold TES. VPPs are aggregations of electrified, grid-connected devices, including grid-interactive efficient buildings, that reduce utilities’ reliance on natural gas peaker plants and reduce the strain on transmission and distribution infrastructure by intelligently time-shifting and shaving electricity demand.
If Nostromo Energy’s loan guarantee is finalized, it will be offered through the Innovation Energy category of LPO’s Title 17 Clean Energy Financing Program, which includes financing opportunities for projects that deploy new or significantly improved high-impact clean energy technologies. Interest in projects like IceBrick is also supported by the IRA’s Section 48 Investment Tax Credit, which allows businesses to deduct a significant percentage of the installation costs of TES and other clean technology installations from their federal taxes.
DOE must still complete an environmental review and Nostromo must satisfy certain technical, legal, environmental, commercial, and financial conditions before the feds can decide whether to enter into definitive financing documents and fund the loan guarantee.
