Ground broken, Utah hydrogen plant gets $500M DOJ financing
The Advanced Clean Energy Storage project near Delta, expected to be the world’s largest industrial hydrogen production and storage facility, has received a commitment for over $500 million in debt financing from the U.S. Department of Energy. The agency’s Loan Programs Office announced that it has issued the conditional commitment to Advanced Clean Energy Storage I LLC, Mitsubishi Power Americas Inc., Magnum Development LLC and Haddington Ventures LLC, developing partners in the venture. The project broke ground last month.
The Millard County hydrogen hub was announced in May 2019 and is in the final stages of debt and equity closing. Currently, the hub has secured all major contracts including offtake, engineering, procurement and construction contractors; major equipment suppliers; and operations and maintenance providers. Haddington Ventures, the financial advisor for the hub and equity sponsor of Magnum Development, is securing $650 million through its equity syndication program.
“We are unbelievably excited to reach this important milestone, not just for our hub, but for the hydrogen industry as a whole,” said Michael Ducker, senior vice president of hydrogen infrastructure for Mitsubishi Power Americas and president of Advanced Clean Energy Storage I. “Equally rewarding is having spent the past year partnering and working with such a forward-thinking and incredibly talented team from the Intermountain Power Agency to trailblaze this market-leading facility. We are honored to be sharing this industry moment with them along with all of our world-class partners joining this effort.”
The hub will initially be designed to convert renewable energy through 220 megawatts of electrolyzers to produce up to 100 metric tons per day of green hydrogen, which will then be stored in two massive salt caverns, each capable of storing 150 gigawatt-hours of energy. Financed with support from the DOE loan guarantee, this facility will supply hydrogen feedstock to the Intermountain Power Agency’s (IPA) IPP Renewed project — an 840 megawatt hydrogen-capable gas turbine power plant — that will initially run on a blend of 30 percent green hydrogen and 70 percent natural gas starting in 2025 and will increase to 100 percent by 2045. IPP Renewed is a rebuild of IPA’s coal-fired power plant at the site.
“The IPP Renewed project is committed to helping the region meet its carbon targets by utilizing green hydrogen as a tool to integrate affordably and reliably with the significant build-out of renewables. The scale, experience and collaboration offered by the Advanced Clean Energy Storage hydrogen hub made their team the ideal partner for us to work with as we realize our vision towards 100 percent green hydrogen at the site,” said Greg Huynh, operating agent for IPA.
“The Advanced Clean Energy Storage Project is well on its way to achieving its goal in the creation of a world-class green hydrogen hub,” said Craig Broussard, CEO of the joint venture. “Through our network of partners, we have the potential to provide low-cost green hydrogen to verticals in addition to power, including refineries, heavy industrials and the transportation sector.”