LPO Announces Conditional Commitment to Nostromo Energy to Enhance Grid Reliability and Cut Air Conditioning Energy Waste for Large Buildings in California

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As part of the Biden-Harris Administration’s Investing in America agenda, the U.S. Department of Energy’s (DOE) Loan Programs Office (LPO) today 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 (including $303.69 million of principal and $1.85 million of capitalized interest) 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 TES cells, which are the main component of the IceBrick systems, will be manufactured for this project (and future US installations) entirely in the US by contractors located in three states: Texas, Iowa, and California. The project has the potential to create more than 200 jobs, including over 170 peak construction jobs. Over the 5-year construction period, Nostromo will create more than 870 annual job equivalents—reinforcing President Biden’s unprecedented effort to create good-paying, high-quality job opportunities in communities across the country.  

Nostromo Energy submitted its loan application to LPO in Summer 2022. If finalized, Project IceBrick would 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 would then store and later use the ice to support cooling of the building during hours of peak demand, when the power grid faces highest demand and electricity production is dirtiest and most expensive. Nostromo’s Cirrus software platform allows the IceBrick systems to operate as a VPP by orchestrating multiple energy assets to function in concert with one other or participating as individual assets. The flexibility of this load shift technology provides not only resilient power capacity, but also serves as a load stabilizing complement to intermittent clean energy assets that are central to California’s 100% clean energy by 2045 goal. 

This investment supports the Biden-Harris Administration’s Justice40 Initiative, which sets a goal that 40% of the overall benefits of certain federal investments in clean energy and other areas flow to disadvantaged communities that are marginalized by underinvestment and overburdened by pollution.  LPO borrowers are required to develop and ultimately implement a comprehensive Community Benefits Plan that ensures borrowers meaningfully engage with communities and labor groups to create good-paying jobs and improve the well-being of residents and workers. Nostromo will target installing at least 20% of these projects in disadvantaged communities, further improving the reliability of local systems. As a VPP, Project IceBrick also supports a higher rate of grid asset utilization, further tempering cost increases for Californians, a state that faces some of the highest electricity bills in the nation.  

Project IceBrick represents the third VPP project LPO has announced and the first to use cold TES. VPPs are aggregations of electrified, grid-connected devices, including grid interactive efficient buildings. VPPs reduce utilities’ reliance on natural gas peaker plants and reduce the strain on transmission and distribution infrastructure by intelligently time-shifting and shaving electricity demand. By shifting commercial cooling loads away from times of peak usage, when electricity is at its most carbon-intensive, Nostromo’s IceBrick systems would allow California’s bulk power system to avoid up to 500 thousand tonnes of CO2 emissions over the project’s lifetime. With Project IceBrick, Nostromo 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.  

At full scale, 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. Individual IceBrick thermal storage cells are modular and compact, allowing for installation in a variety of building types as well as locations within a building, such as in a basement or on a roof. Nostromo’s VPP software can control operation and performance of IceBrick systems either as standalone systems or in concert as a VPP. 

LPO’s conditional commitment to Nostromo demonstrates the success of President Biden’s Inflation Reduction Act (IRA) in accelerating deployment of clean energy and storage systems. The loan guarantee, if finalized, will be offered through the Innovation Energy category of LPO’s Title 17 Clean Energy Financing Program, which includes financing opportunities for projects that deploy new or significantly improved high-impact clean energy technologies. Interest in projects like IceBrick is also supported by the IRA’s Section 48 Investment Tax Credit, which allows businesses to deduct a significant percentage of the installation costs of TES and other clean technology installations from their federal taxes.  

While this conditional commitment indicates 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.