DOE Loan Programs Office is back in action, plus the latest climatetech deals

Global climate change doesn’t take time off, and neither does the global decarbonization industry. 

While many of us were unplugged and winding down one of the more challenging years since 1347, climatetech companies and investors were busy funding, acquiring and constructing new businesses. Here’s a roundup of the news.

First loan from the DOE Loan Programs Office in years

Materials company Monolith has received conditional approval for a $1.04 billion loan from the U.S. Department of Energy to support expansion of its facilities for renewable-powered production of hydrogen, ammonia and carbon black in Hallam, Nebraska. 

This is the first such loan approval from the DOE Loan Programs Office in five years for anything other than nuclear power. Still, certain conditions must be met before a final loan is issued.

Monolith’s expanded facilities will use methane pyrolysis technology to cleanly produce hydrogen and carbon black, which are frequently used in hard-to-decarbonize industrial sectors. Carbon black is most commonly known for its use in tires. According to a release, leading tire manufacturers Goodyear and Michelin have expressed support for the DOE’s conditional approval and Monolith’s technology. Today’s commercial processes to create carbon black release high levels of greenhouse gases. 

Monolith also expects to use much of the clean hydrogen produced at its expanded facilities for the production of ammonia that will be distributed in the U.S. Corn Belt for fertilizer applications.

Monolith is backed by Azimuth Capital Management, Cornell Capital, Imperative Ventures, Warburg Pincus, Perry Creek Capital, Mitsubishi Heavy Industries America, SK Inc. and NextEra Energy Resources. 

The DOE loan program will be extremely active in 2022, sources tell Canary Media. Canary recently interviewed Jigar Shah, director of the Loan Programs Office, about his strategy for reinvigorating the office. 

AES acquires solar developer Community Energy

The AES Corporation acquired U.S. solar developer Community Energy Solar along with its 10-gigawatt project pipeline.

Dave Kirkpatrick, managing director at SJF Ventures, co-led the Series A financing for Community Energy Solar in 2010 with NGP ETP. Community Energy was a wind project developer that was spun out of Iberdrola. SJF’s thesis, according to Kirkpatrick, was that a proven renewables development team could translate its expertise from developing wind to scaling solar in multiple new state markets. Community Energy went on to deliver 3 gigawatts of utility-scale and community solar projects in 15 states. 

Kirkpatrick noted that SJF’s investment in Community Energy informed its subsequent investments in the energy transition, including Nextracker and Terabase in driving down costs in utility solar, PosiGen in residential solar and efficiency, and Voltaiq in energy storage. 

Stem buying AlsoEnergy, a solar asset management platform 

Software-driven energy storage firm Stem is going to acquire solar asset management platform AlsoEnergy, which provides software and monitoring to solar project owners and operators. AlsoEnergy manages more than 32 gigawatts of solar assets. The $695 million purchase will be made with a mixture of cash and stock, according to Stem’s press release.

Stem’s software enables its project-developer customers to ​“meet resource adequacy requirements, optimize wholesale market revenue and participate in wholesale energy markets.” Stem supports enterprise customers with behind-the-meter applications as well. The company will now offer its services to AlsoEnergy’s existing customers. 

Stem has customer projects in the Independent System Operator New England market that can ​“co-optimize seven value streams: day-ahead markets, real-time energy markets, frequency regulation, capacity market, coincident peak reduction, solar shifting incentives and solar [Investment Tax Credit] earnings.”

Solar, storage and distributed-energy deal flurry

• Shell New Energies, a subsidiary of oil and gas behemoth Royal Dutch Shell, is growing its renewable energy business with the acquisition of utility-scale solar and storage developer Savion. Savion has more than 18 gigawatts of commercial- and utility-scale solar power and battery storage in development. Shell also owns a stake in Silicon Ranch Corporation in the U.S., Cleantech Solar in Singapore, and Esco Pacific in Australia, and Shell owns sonnen, an energy storage company in Germany, and Eolfi, a wind and solar developer in France.
• KKR, an investment firm, is launching Stellar Renewable Power, a company that will source, develop and operate utility-scale solar generation and energy storage.
• Opus One Solutions, a software company that helps electric utilities optimize energy planning, operations and market management, is being acquired by GE Digital. Opus One’s planning software can help utilities make decisions about how to integrate renewables and distributed energy resources at scale across the power grid.

NuScale, an innovative nuclear reactor firm, is going public

NuScale Power, the developer of what could be the first U.S. small modular nuclear reactor plant, plans to go public by merging with Spring Valley Acquisition Corp., a special-purpose acquisition company. The new entity will have an estimated value of $1.9 billion, according to a statement.

NuScale is majority-owned by Fluor, an engineering, procurement and construction firm that competes with the likes of Bechtel. 

NuScale is the first and only company to have won approval from the U.S. Nuclear Regulatory Commission for a small modular reactor design. SMRs can produce 10 to 350 megawatts of power or heat and be built in factories and shipped to a site instead of being constructed, expensively and riskily, on-site. The presumption is that the incremental construction scheme of SMRs can mitigate the financial and safety concerns that prevent conventional nuclear power plants from being built in the U.S.

The technology used by NuScale borrows in many cases from existing light-water reactor designs. This is crucial, as it allows the NRC to stay within its regulatory comfort zone. 

As part of the Carbon Free Power Project, Utah Associated Municipal Power Systems has said it plans to build an SMR plant using NuScale reactor modules at the Idaho National Laboratory.

NuScale has raised a total of $1.3 billion including about $500 million from the U.S. DOE and $600 million from Fluor. The company has yet to generate any revenue. 

Meyer Burger selects U.S. solar module manufacturing site

Meyer Burger Technology is establishing a production site for high-performance solar modules in Goodyear, Arizona, with the intention of producing modules near end customers and sourcing material from regional suppliers. The initial annual production capacity of the facility will be 400 megawatts. Production is expected to be operational by the end of 2022, creating an initial 250 manufacturing jobs, and more than 500 jobs when the facility is at its full 1.5-gigawatt capacity.

Domestic solar module production such as the planned Meyer Burger plant would receive generous tax credits if the Solar Energy Manufacturing for America Act, sponsored by Senator Jon Ossoff (D-Georgia), is enacted.