The loan intends to finance Project IceBrick, a virtual power plant consisting of up to 193 cold thermal energy storage installations at commercial buildings across California.
The U.S. Department of Energy’s (DOE) Loan Programs Office (LPO) announced a conditional commitment to IceBrick Energy Assets I, LLC, a subsidiary of Nostromo Energy, Inc., for a loan guarantee of up to $305.54 million to finance Project IceBrick, a virtual power plant (VPP) consisting of up to 193 cold thermal energy storage (TES) installations at commercial buildings across California.
The company’s patented IceBrick system is a 12-foot by 20-inch rectangular energy storage block with a 132 gallon volume.
Project IceBrick is designed to provide customers with efficiency as a service by freezing a water-based solution during hours when electricity supply is at its most abundant and clean. The IceBrick system stores and later uses the ice to support cooling of the building during hours of peak demand, when the power grid faces highest demand.
The IceBrick systems use Nostromo’s Cirrus software platform to operate as a VPP by orchestrating multiple energy assets to function together or as individual assets.
At full scale, Nostromo reports that 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.
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 DOE reports that peak hours air conditioning accounts for approximately 50% of U.S. electricity load during those 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 time-shifting cooling loads to shave electricity demand from times of peak usage, when electricity is most carbon-intensive.
“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 TES cells, the main component of the IceBrick systems, will be manufactured for this and future U.S. projects in the U.S. by contractors in Texas, Iowa, and California. The project has the potential to create more than 200 jobs, including over 170 peak construction jobs. Over the five-year construction period, Nostromo reports that it will create more than 870 annual job equivalents.
LPO borrowers are required to develop and implement aCommunity Benefits Planthat ensures borrowers meaningfully engage with communities and labor groups to create good-paying jobs and improve the well-being of residents and workers. Nostromo plans to install at least 20% of these projects in disadvantaged communities, further improving the reliability of local systems.
In addition, Nostromo indicates it will share with its customers a portion of the expected cost savings attributable to this aggregate shift in building cooling load and plans to earn additional revenue by having the VPP participate in wholesale energy and capacity markets.
While thisconditional commitmentindicates DOE’s intent to finance the project, DOE must complete an environmental review, and the company must satisfy certain technical, legal, environmental, commercial, and financial conditions before the Department can decide whether to enter into definitive financing documents and fund the loan guarantee.
Nostromo Energy was formed in 2016 in Shdema, Israel, and has a U.S. office in Irvine, California.
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