The U.S. Department of Energy's (DOE) Loan Programs Office (LPO) has made its first conditional commitment under the newly expanded Tribal Energy Financing Program.
The LPO recently announced it will provide a $72.8 million partial loan guarantee to finance the development of a solar plus long-duration energy storage microgrid for the Viejas Band of the Kumeyaay Indians. The commitment is conditional and funds will only be guaranteed once the project meets specific conditions and milestones.
The utility-scale renewable microgrid will be built on tribal lands near Alpine, California, just east of San Diego. Indian Energy, a 100% Native American-owned energy development firm is developing the project, which will include a 15-MW solar array and a 38-MWh battery long-duration energy storage system (LDES).
Long-duration energy storage systems gaining traction
LDES have been gaining traction in the microgrid market of late. These systems can store energy for future dispatch for much longer periods compared to shorter duration lithium ion chemistries – often as long as eight to 12 hours.
The U.S. Army Corps of Engineers recently announced it would be testing an LDES microgrid with containerized iron flow batteries, while the Paskenta Band of Nomlaki Indians, also located in California, is developing a solar plus LDES microgrid with zinc-bromine flow batteries from Redflow.
The LDES battery chemistry for the Viejas project was not disclosed.
Lower energy costs, more control
The Viejas microgrid will be operated by a subsidiary of the Viejas Band, which will sell power to the tribe via a long-term power purchase agreement. The tribe has been subject to an increasing number of public safety power shutoffs in recent years, so the electricity will provide resilience to its gaming, hospitality, retail and other commercial businesses.
The microgrid will also reduce energy costs for the Viejas Band, allowing tribal leadership to make other infrastructure improvements, further fund the tribal fire department, create cultural and educational programs and offer other services to members.
Tribal ownership of energy assets
The Viejas microgrid is an example of how government funding is spurring the development of clean energy projects by and for tribal communities. These projects enhance tribal energy sovereignty and encourage economic development by lowering energy costs and providing good paying jobs, according to a statement from the LPO.
The Tribal Energy Financing Program provides direct loans or partial loan guarantees to support the development of energy-related projects. Federally recognized tribes, Alaska Native villages, regional or village corporations and tribal energy development organizations are eligible for the program, which was expanded from $2 billion to $20 billion under the Inflation Reduction Act.
The project also supports the Justice40 Initiative, a Biden administration program that aims to ensure that 40% of clean energy and other specific federal benefits are invested in disadvantaged communities, like the Viejas Band.
In addition to the LPO program, a number of tribal communities were recently awarded funds from the DOE’s Energy Improvements in Rural or Remote Areas program.
Tribal-owned contractors and other minority- and veteran-owned businesses will be given priority for the more than 250 construction jobs created by the Viejas project, as well as for the eight new permanent positions required to operate the microgrid once it’s been commissioned.
