U.S. Energy Department Announces Conditional Commitment of Over $300 Million to Thermal Energy Storage Company

The U.S. Energy Department on Dec. 9 announced a conditional commitment for a loan guarantee of up to $305.54 million for Nostromo Energy’s Project IceBrick, which involves thermal energy storage installations at commercial buildings in California. During its lifetime, the project could help California’s commercial buildings avoid around 500,000 tonnes of carbon emissions. Once operating at full capacity, the system could provide around 170 MW (450 MWh) of behind-the-meter storage capacity for commercial buildings with high energy consumption such as hotels and data centers.

Nostromo Energy’s novel cooling system utilizes a virtual power plant, or VPP, comprising 193 thermal storage cells. A VPP is a network of electric grid-connected components that strategically manage the electric load to reduce the burden on transmission systems. These cells use electricity during times of low demand to freeze a water-based solution, which then melts and cools the buildings at times of peak electricity demand. This helps to distribute electricity more evenly throughout the day, leading to efficient cooling and lower emissions.

The company filed its loan application with the Loan Programs Office in 2022, through the Innovation Energy category of the office’s Title 17 Clean Energy Financing Program. This program funds projects that use novel technology to significantly reduce carbon emissions and improve energy efficiency. Last week, the department announced a $303.5 million loan guarantee through the program to Eos Energy, to manufacture long-duration energy storage batteries for households.

The conditional commitment to Project IceBrick is also the third project to utilize VPPs. In November, the department announced a conditional loan of almost $300 million for Sunwealth to operate a virtual power plant with 1,000 solar photovoltaic systems and battery energy storage systems.

Commercial entities that use Project IceBrick would also be eligible for the 2022 Inflation Reduction Act’s Section 48 Investment Tax Credit. The tax credit incentivizes businesses to invest in clean energy systems by deducting a significant percentage of the installation costs of clean energy devices and installations.