The US Department of Energy (DOE) has closed a US$26.5 billion loan package to two wholly owned subsidiaries of utility Southern Company, in Georgia and Alabama, US.
According to the DOE, the two loans will develop or enhance over 16GW of generating capacity for the electrical grid. This comprises 5GW of new gas-fired generation, 6GW of nuclear power improved via uprates and license renewals, hydropower upgrades, battery energy storage systems (BESS), and more than 1,300 miles of transmission and grid improvement projects.
The agency also claimed that these loans constitute the largest government investment focused on directly reducing consumer energy expenses and enhancing grid reliability. When all the funds are disbursed through the programme, the loans are projected to cut Southern Company’s interest costs by more than US$300 million annually, in theory, accelerating lower electricity prices for customers.
Alabama Power
In Southern Company’s Alabama-based subsidiary, Alabama Power’s 2025 integrated resource plan (IRP), the company considers both traditional BESS and medium-duration energy storage systems (MDESS) with approximately 12 hours of duration.
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From the IRP, “BESS is available as an expansion resource beginning in 2028.” It continues, “MDESS is available as an expansion resource beginning in 2033.”
Alabama Power models cost and performance for MDESS with either thermal energy storage or compressed air energy storage (CAES).
The utility announced Alabama’s first utility-scale BESS in March 2025. Located in Walker County, the 150MW project will be built on a site that previously belonged to the Gorgas coal plant, which was retired in 2019.
In 2024, EPRI, Southern Company, and Storworks completed testing of a concrete thermal energy storage pilot project at a gas plant in the state, which was claimed at the time to be the largest of its kind in the world.
Additionally, in January, Southern Company announced it would install US-based iron-sodium battery manufacturer Inlyte Energy’s first ESS at its Energy Storage Test Site in Wilsonville, Alabama. The demonstration project will be 80kW/1.5MWh.
In the IRP, BESS is not accessible until 2028, and MDESS until 2033. Both are limited to 3,000MW annually in modeling. It’s uncertain how much the loans will be utilised for development or upgrades of these technologies, but Southern Company has shown past interest in developing lithium-based and non-lithium projects alike.
Georgia Power
In Southern Company’s Georgia-based subsidiary, Georgia Power’s 2025 IRP, the company considers multiple types of energy storage, including lithium-ion (Li-ion), CAES, and pumped hydro.
The availability and modelling limits of BESS and MDESS remain the same as Alabama Power’s.
Georgia Power has been fairly active in terms of BESS procurement. In September 2025, the utility announced the open comment period for its 2025 Request for Proposals (RFP) for BESS resources.
The RFP, approved by the Georgia Public Service Commission (PSC) as part of the company’s 2022 IRP, opens a competitive process for Georgia Power to acquire 500MW of BESS. The company plans to have the procured resources operational by the end of 2031 at the latest.
In May 2025, the utility began constructing 765MW of new BESS across Georgia. This capacity was increased from 500MW, which the Georgia PSC unanimously approved in 2024.
The utility first proposed the 2025 IRP in January of that year, based on a 2023 version of the document. Georgia Power expects the electrical load in the state to grow by 8.5GW by 2030, exceeding the 2023 projections by more than 2.6GW. The approved 2025 IRP details Georgia Power’s plans to meet this increasing demand.
Prior to the RFP, Georgia Power requested certification from the Georgia PSC for 9,900MW of new generation resources, which included over 3GW BESS, which the utility would own.
Included in the request are power purchase agreements (PPAs) from existing resources, as well as new, company-owned natural gas generation, BESS and solar-plus-storage projects identified through the competitive RFP process. Filings also included a request to certify new combined cycle natural gas units totalling 3,692MW.
In late 2025, the utility reached an agreement with the Public Interest Advocacy (PIA) staff of the Georgia PSC that would help lower energy costs and meet electricity demand in the state, by advancing the requested 9,900MW of generation resources through a competitive bidding process.
While similar to Alabama Power, in that the utility has not yet stated specifics for its loan from the DOE, Georgia Power, and the state as a larger apparatus have shown considerable interest in advancing BESS projects.
In a guest blog for Energy-Storage.news, Allan Oduor of energy sector technical consultancy Enertis Applus+ highlighted that current and projected load growth is a key driver behind Georgia’s increasing number of utility-scale storage projects. Simultaneously, the state is emerging as a key player within the domestic battery supply chain.
“Georgia’s emerging domestic battery manufacturing facilities incorporate production flexibility to serve both automotive and grid-scale storage markets,” Oduor wrote.
“This dual-manufacturing capability enhances supply chain reliability for utility-scale BESS projects, reduces dependence on international suppliers, and minimises procurement delays typically associated with overseas shipping and coordination.”
Oduor continued, “Georgia isn’t merely adding megawatts; it is filling a genuine capacity gap with ready-to-build projects, an anchored supply chain, and a clear procurement schedule. Despite the challenges of site selection and regulatory issues common in such a fast-moving market, BESS projects that secure sites and equipment early position themselves to benefit from a unique and reduced-risk growth opportunity in the Southeast’s emerging storage hotspot.”
These large loan amounts from the DOE are notable, given that the agency has largely been committing significant funds to loosening restrictions on coal plants and to building out nuclear generation facilities.
The Energy Storage Summit USA will be held from 24-25 March 2026, in Dallas, TX. It features keynote speeches and panel discussions on topics like FEOC challenges, power demand forecasting, and managing the BESS supply chain. ESN Premium subscribers can get an exclusive discount on ticket prices. For complete information, visit the Energy Storage Summit USA website.
