This month, the U.S. Department of Energy (DOE) announced a new solicitation for renewable energy and energy efficiency projects, to provide loan guarantees of up to $4 billion. The solicitation identifies five technology areas of focus: advanced grid integration and storage; drop-in biofuels; waste-to-energy projects; existing facility enhancements; and efficiency improvement projects. The loan guarantee program is intended to help project developers secure commercial financing by mitigating some of the risks associated with emerging technology projects. The above categories, which cover projects ranging from methane-capture and bio-refineries to retrofitting wind turbines and improving energy efficiency in homes, are meant to be an illustrative list—not a required box to check.
Under the solicitation, projects must meet the following requirements:
The projects must use:
a) renewable energy systems;
b) efficient electrical generation, transmission, and distribution technologies; or
c) efficient end-use energy technologies
Further, each project must also:
a) Avoid, reduce, or sequester anthropogenic emission of greenhouse gases;
b) Utilize a new and non-commercial energy production, consumption or transportation technology; and
c) Be located in the United States.
DOE’s loan guarantees are intended to help development-scale technologies make the leap to commercial deployment. Previously, DOE has offered guarantees to help foster on-shore wind and utility-scale solar industries. Now DOE is looking at other potentially transformative technologies to develop new industries in the U.S.—and the jobs that will follow. DOE hopes these projects will have a “catalytic” effect on renewable energy and energy efficient technologies by proving that a new and innovative technologies are market-ready. A successful project backed by DOE loan guarantees will provide a strong signal to commercial markets and help future projects obtain financing.
DOE issued the solicitation under Title XVII of the Energy Policy Act of 2005 and the “1703 Regulations” provided in Part 609 under Chapter II of Title 10 of the Code of Federal Regulations. Applicants will be subject to a two-part screening process, including an evaluation of creditworthiness, technical merit and relevance, as well as legal and regulatory risks. Projects completing the two-part application process must then receive a conditional commitment from DOE before negotiating a final loan guarantee. The first round of applications are due October 1, 2014.
DOE’s Loan Programs Office (LPO), which administers the solicitation, currently provides more than 30 projects with over $30 billion in loans, loan guarantees and commitments. The Renewable Energy and Efficient Energy Projects guarantee will join LPO’s active loan guarantee solicitations for Advanced Fossil Energy projects and Advanced Technology Vehicle Manufacturing.
For more on the Loan Guarantee Solicitation, see DOE’s press release.