The U.S. Dept. of Energy closed on a $504.4-million loan guarantee for a hydrogen storage hub in Utah, helping advance a project to replace a coal-fired power plant with a facility using renewable energy sources. Officials say the loan signals the Energy Dept. Loan Programs Office's commitment to ramping up support for clean energy technology projects.

The Advanced Clean Energy Storage project in Delta will be the world’s largest clean hydrogen storage facility, DOE officials say. As ENR previously reported, the estimated $1-billion project will “capture” surplus renewable energy to power electrolysis equipment converting water into hydrogen. The facility will then store the hydrogen underground in a pair of 4.5-million-barrel salt caverns until it is needed to generate power.

The hydrogen will be used by Intermountain Power Agency’s future power plant nearby. The plant will initially use a mix of natural gas and 30% hydrogen for power generation, and ramp up to using 100% hydrogen fuel by 2045, according to the power agency, which transmits electricity to six states. The plant is scheduled to go on line in 2025.

The loan guarantee will help finance construction of the hydrogen hub.

“This step creates a path to accelerate the long-term hydrogen market and clean energy landscape to expand decarbonization across the United States,” Michael Ducker, senior vice president of hydrogen infrastructure for Mitsubishi Power Americas and president of Advanced Clean Energy Storage I, said in a statement. Mitsubishi Power is one of the partners behind the hub plan.

Supporting More Clean Energy Projects

The loan guarantee is the department’s first for a new clean energy technology project since 2014, officials say. But more are coming.

Since December, DOE has also issued conditional approval for a $1-billion loan guarantee for a Nebraska plant that would produce hydrogen and carbon black with a lower-emissions process, and a $107-million guarantee for a Louisiana project to produce graphite for lithium-ion electric vehicle batteries.

As of May the department’s Loan Programs Office had 77 active applications seeking $78.8 billion in loans, Jigar Shah, office director, said in a June 8 briefing.

“As today’s announcement shows, we’re back in a big way,” he said. “Over the past 15 months, the Loan Programs Office has gone from a largely dormant office to a hub of activity.”

Shah said funding interest "already is exceeding the $11 billion we have left.”

DOE is ramping up the loan office to meet climate goals set by President Joe Biden, Energy Secretary Jennifer Granholm told reporters.

“President Biden set this series of bold clean energy goals—100% clean electricity by 2035, net zero [carbon emissions] by 2050,” she said. “The only way to hit those goals is to scale deployment of clean energy technologies as quickly as possible.”

The office has grown from fewer than 100 people to more than 150, Shah added.

“The goal of our effort is not to just provide stimulus in the short term, but to create an institution that entrepreneurs and energy leaders can rely upon to help commercialize their technologies and build robust industries right here in the United States,” he said.