DOE deal

Texas lands largest portion of energy efficiency-focused federal grant program

The DOE funding will go toward the creation of a new Texas-based revolving loan fund that operationally matches the existing Texas LoanSTAR revolving loan program. Photo via Getty Images

Texas is among one of 17 states and territories to receive a portion of $66 million in awards for initiatives that pump federal dollars into their communities to support energy efficient projects.

The funds come from the U.S. Department of Energy's Energy Efficiency Revolving Loan Fund (RLF) Capitalization Grant Program. The RLF Program awards are intended to be put toward state-based loans and grants that go towards local businesses homeowners, and public spaces for "for energy efficiency audits, upgrades, and retrofits to increase energy efficiency," according to the DOE.

Texas received the largest portion thus far at $22.4 million. The dollars will go toward the creation of a new Texas-based revolving loan fund that operationally matches the existing Texas LoanSTAR revolving loan program.

The program currently finances energy-related, cost-reduced retrofits of public spaces as well as local municipalities. As of last year it had awarded more than 337 loans totaling more than $600 million, according to the Texas Comptroller's website.

In addition to the revolving loan, the state plans to use the DOE funds to provide free energy audit services to the community.

The DOE also awarded funding to create similar revolving loan programs and grants in Arizona, Georgia, Iowa, Puerto Rico and the U.S. Virgin Islands.

According to the DOE, every federal dollar invested into a state or local revolving loan fund can bring more than of $20 in private capital toward successful energy financing programs.

“Increased opportunities for low-cost financing will help states and territories expand access to the money-saving clean energy tools that will benefit the residential, commercial and public sectors,” Jennifer M. Granholm, U.S. Secretary of Energy, said in a statement. “We are excited to see states and territories take advantage of targeted and impactful financing options to transform their communities.”

The latest funding is the third award made by the RLF Program, which plans to make another round of awards later this year and a total $242 million once wrapped.

Other awards in this latest round include:

  • Arizona ($1,690,280)
  • Colorado ($1,631,220)
  • Delaware ($746,400)
  • Georgia ($2,453,810)
  • Iowa($7,068,920)
  • Kansas ($6,706,230)
  • Maine ($863,110)
  • Massachusetts ($1,894,760)
  • Minnesota ($1,884,300).
  • Nevada ($1,043,290)
  • New Jersey ($2,383,510)
  • New Mexico ($5,692,530)
  • Oklahoma ($7,592,300)
  • Puerto Rico ($1,070,490)
  • Rhode Island ($762,790)
  • U.S. Virgin Islands ($576,170)

Click here and here to read more about the previous awards.

Earlier this summer the DOE also awarded four Houston companies have received $50,000 each from the U.S. Department of Energy to further develop their carbon dioxide removal technology. Click here to read more.

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A View From HETI

Yara North America is growing its Texas footprint. Photo courtesy Yara International

Yara North America, a subsidiary of Norwegian fertilizer and ammonia producer Yara International, has agreed to buy an ammonia production plant in Texas City for $1.3 billion.

The seller is GCA Holdings, an affiliate of Texas City-based chemical manufacturer Gulf Coast Ammonia, which is owned by private equity firms Lotus Infrastructure Partners and MB Energy.

The Texas City plant, with an eventual annual capacity of 1.3 million metric tons, is expected to start full production by the end of this year. Yara says the ammonia produced by the plant will serve its own fertilizer production system and its key customers.

During a recent call with analysts and investors, Magnus Ankarstrand, executive vice president and CFO of Yara International, said the plant holds the potential to become one of the company’s most profitable plants. The $1.3 billion purchase price, he added, “is a very attractive entry ticket to ammonia production in the U.S. at a very attractive cost.”

The Texas City plant will add to Yara’s holdings in the Lone Star State, as Yara is the majority owner of an ammonia, hydrogen and nitrogen production plant in Freeport.

Construction of the ammonia plant began in 2020, but technical and infrastructure issues delayed the project. On its website, Gulf Coast Ammonia says the plant represented a $600 million investment.

“Gulf Coast Ammonia is a world-class asset that required disciplined execution across development, financing, construction, and commercial structuring,” Philipp Pletka, managing director of Lotus Infrastructure Partners, says in a news release.

Trexlertown, Pennsylvania-based Air Products, which owns and operates the country’s largest hydrogen pipeline network, will continue to supply hydrogen and nitrogen for the plant under a long-term deal with Yara, according to the release.

However, the news comes two days after Yara International announced that it would no longer be purchasing ammonia assets in the Louisiana Clean Energy Complex (LCEC) from Air Products. In a separate release, Yara said it planned to reallocate funds toward "alternative mature U.S. ammonia investment opportunities with more competitive returns."

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