The US Department of Energy (DOE) has finalised a $15bn loan guarantee for Pacific Gas and Electric (PG&E) to finance a range of grid modernisation projects across California.
Granted through Loan Programs Office (LPO), the loan is part of the Biden-Harris Administration’s “Investing in America” agenda.
It will support a portfolio of projects designed to expand hydropower generation, increase battery energy storage capacity, upgrade transmission systems, and enable virtual power plants (VPPs).
Besides, the DOE’s financing aims to enhance energy infrastructure, boost reliability, and lower electricity costs for the natural gas and electric utility company’s 16 million customers.
PG&E’s infrastructure enhancements include refurbishing its hydroelectric power fleet, which consists of 61 powerhouses generating more than 3.8GW of clean energy. This is sufficient to power approximately four million households.
Additionally, the company plans to expand its renewable energy integration through battery storage, with 4.2GW of capacity already under contract.
The loan will also fund upgrades to the transmission system, including reconductoring power lines, expanding substations, and deploying advanced sensors to support resilient grid operations during extreme weather events.
VPPs are expected to allow for two-way power flow by integrating small-scale energy-producing and storage devices, such as batteries and electric vehicles, into the grid.
PG&E currently operates 400MW of VPP capacity through various customer programmes.
The projects are also expected to create approximately 3,900 construction and operational jobs over the loan’s lifespan.
PG&E submitted its application for the loan in mid-2023 under the DOE’s Title 17 Clean Energy Financing Program (Section 1706). The loan guarantee requires the company to implement a comprehensive Community Benefits Plan (CBP).
PG&E will also expand its PowerPathway programme in partnership with the International Brotherhood of Electrical Workers (IBEW) Local 1245 to provide training and job opportunities for underserved groups.
