Nostromo lands $305m loan guarantee for VPP project with ice storage

The US Department of Energy’s (DOE) Loan Programs Office (LPO) has 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 VPP consisting of up to 193 cold 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 buildings during hours of peak grid demand.

The IceBrick systems use Nostromo’s Cirrus software platform to operate as a VPP by orchestrating multiple energy resources 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 customer-side, “behind-the-meter” energy storage capacity for hotels, offices, data centers, and other commercial buildings.

Project IceBrick is the third VPP project the LPO has announced and is the first to use TES. The potential for VPPs to alleviate grid load is significant as the DOE has reported air conditioning accounts for approximately half of the United States’ electricity load during peak grid hours.

VPPs are aggregations of electrified, grid-connected devices, including grid interactive efficient buildings. They reduce utilities’ reliance on natural-gas peaker plants to meet grid demand 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, [will] create hundreds of good-paying domestic jobs, and [will] reduce emissions from gas peaker plants, which mostly impact disadvantaged communities around them.”

Made in America

The TES cells, the main component of the IceBrick systems, will be manufactured in the United States by contractors in Texas, Iowa, and California. The project has the potential to create more than 200 jobs, including more than 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 a Community Benefits Plan to ensure borrowers meaningfully engage with communities and labor groups to create well-paid jobs and improve the wellbeing of nearby residents and workers. Nostromo plans to install at least 20% of its community projects in disadvantaged areas. Nostromo said it will share with its customers a portion of the expected cost savings attributable to the aggregate shift in building-cooling load and plans to earn additional revenue by having the VPP participate in wholesale energy and grid capacity markets.

While the DOE’s conditional commitment indicates an intent to finance the project, the department must complete an environmental review of the system and Nostromo must satisfy technical, legal, environmental, commercial, and financial conditions before the department can decide whether to enter into definitive financing to fund the loan guarantee.

Nostromo Energy was formed in 2016 in Shdema, Israel, and has a US office in Irvine, California.

From pv magazine USA.