US DOE Closes $504.4 Million Loan to Advanced Clean Energy Storage Project for Hydrogen Production and Storage

SALT LAKE CITY--(BUSINESS WIRE)--Mitsubishi Power Americas and Magnum Development today announced the closing of a $504.4 million loan guarantee from U.S. Department of Energy’s (DOE) Loan Programs Office to Advanced Clean Energy Storage I, LLC to develop the world’s largest industrial green hydrogen facility in central Utah. DOE’s loan is its first in more than ten years for a renewable energy project.

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In April 2022, DOE’s Loan Programs Office issued a conditional commitment for ACES I. The loan closed on June 3, 2022, highlighting the Administration and the Energy Department’s commitment towards supporting the clean hydrogen sector. This loan helps generate a viable market for hydrogen and will make it scalable in the western United States and electrical grid, creating the fundamental infrastructure necessary to deploy this zero-carbon energy source.

“The Advanced Clean Energy Storage team, with its world-class industry partners, is excited to secure this loan by DOE to develop the first phase of the world’s largest renewable hydrogen energy hub,” said Michael Ducker, Senior Vice President of Hydrogen Infrastructure for Mitsubishi Power Americas and President of Advanced Clean Energy Storage I. “This step creates a path to accelerate the long-term hydrogen market and clean energy landscape to expand decarbonization across the United States.”

U.S. Secretary of Energy Jennifer M. Granholm said, “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. 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 hub will help the clean energy transition by supporting the Intermountain Power Agency’s IPP Renewed Project—upgrading to an 840 megawatt (MW) hydrogen-capable gas turbine combined cycle power plant. The plant will initially run on a blend of 30% green hydrogen and 70% natural gas starting in 2025 and incrementally expand to 100% green hydrogen by 2045.

The hub will produce up to 100 metric tonnes per day of green hydrogen from renewable energy using electrolysis. Green hydrogen can then be stored in two massive salt caverns, each capable of storing 150 gigawatt hours (GWh) of energy, resulting in the world’s single largest hydrogen storage site and providing capabilities for seasonal shifting of excess renewable energy. The long-duration energy storage capability of the salt caverns will help improve resource adequacy and decrease costs by capturing excess renewable power when it is abundant and dispatching it back on the grid when it is needed.

“This joint venture is historic for Mitsubishi Power Americas and the future of global hydrogen deployment,” says Bill Newsom, President and CEO of Mitsubishi Power Americas. “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 help spur economic development locally by creating up to 400 local construction jobs throughout the 3-year construction cycle, and it will employ a projected 25 full-time operations and maintenance personnel to provide 24/7 operations and maintenance of the facility. Additionally, property tax revenue collected by Millard County, Utah, will contribute to services that benefit all nearby Utahns, which typically include law enforcement and emergency response, infrastructure, and other services.

“Magnum Development has enjoyed a synergistic relationship with the City of Delta and Millard County since 2008,” said Craig Broussard, CEO of Magnum Development and ACES Delta. “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.”

For more information and to stay up to date with the development of the hydrogen hub, visit www.aces-delta.com.

About Mitsubishi Power Americas, Inc.

Mitsubishi Power Americas, Inc. (Mitsubishi Power) headquartered in Lake Mary, Florida, employs more than 2,300 power generation, energy storage, and digital solutions experts and professionals. Our employees are focused on empowering customers to affordably and reliably combat climate change while also advancing human prosperity throughout North, Central, and South America. Mitsubishi Power’s power generation solutions include gas, steam, and aero-derivative turbines; power trains and power islands; geothermal systems; PV solar project development; environmental controls; and services. Energy storage solutions include green hydrogen, battery energy storage systems, and services. Mitsubishi Power also offers intelligent solutions that use artificial intelligence to enable autonomous operation of power plants. Mitsubishi Power is a power solutions brand of Mitsubishi Heavy Industries, Ltd. (MHI). Headquartered in Tokyo, Japan, MHI is one of the world’s leading heavy machinery manufacturers with engineering and manufacturing businesses spanning energy, infrastructure, transport, aerospace, and defense. For more information, visit the Mitsubishi Power Americas website and follow us on LinkedIn.

About Magnum Development

Magnum Development, LLC is developing the only known “Gulf Coast” style domal-quality salt formation in the western United States. Magnum was founded in 2008 to create an energy hub centered around a large, little known salt body near Delta, Utah. Site viability and profitability has been proven with one business, Magnum NGLs, LLC, which was successfully developed, brought to commercialization, and sold in 2015. In March 2018, Magnum Development entered into a joint venture with Sawtooth by contributing its refined products business for an 8% ownership interest in the Sawtooth JV. A second JV was formed with Mitsubishi Power Americas, Inc. in 2019 to add the production and storage of fossil-free energy to the energy hub’s portfolio of products. As the Delta, Utah, energy hub grows Magnum will pursue additional strategic partners to broaden the strengths and products of the enterprise.

About ACES Delta

ACES Delta is a joint venture between Mitsubishi Power Americas and Magnum Development. ACES Delta is developing the world’s largest renewable energy hub to produce, store, and deliver green hydrogen to the western United States. Located in Delta, Utah, the Advanced Clean Energy Storage hub will serve as the country’s largest hydrogen gas and storage hub, initially providing over 300 GWh of clean renewable energy storage to the region. For more information, visit www.aces-delta.com.