According to Mr. Peter Davidson, Executive Director of the U.S. Department of Energy’s (DOE) Loans Program Office, the DOE is targeting from $1.5 billion to as much as $4 billion for a new renewable energy project loan guarantee program that could result in solicitations for a range of projects by the end of 2014. This information was provided last week by Mr. Davidson during an interview at the ARPA-E Energy Innovation Summit outside Washington, D.C.
The last loan from the program (known as the 1705 Program) was issued in September 2011, and DOE has remained silent on new loan guarantee opportunities since then. However, since Mr. Davidson took over in October 2013, the loan office has issued about $6.5 billion in guarantees for two nuclear reactor projects (Alvin W. Vogtle Electric Generating Plant), as well as soliciting projects for an $8 billion fossil fuels technology program – and renewables are said to be next on the list. While funds from the 1705 Program are gone, the Loans Programs Office still has $1.5 billion in remaining renewable energy authority under the separate 1703 Program and about $2 billion in mixed-use authority, as well as hundreds of millions of dollars in credit subsidy authority that could amount to upwards of an additional $4 billion.
Any new program will be targeting much small projects than in the past, with areas like waste-to-energy projects and hydropower as some of the targeted facilities. Mr. Davidson stated that, as with the 1705 Program, DOE will be looking for guaranteed buyers of the power such as PPAs from utilities seeking to fill RPS quotas, or contracts with private buyers. It could also come from broader policy-driven payback streams, such as the feed-in tariffs offered by a handful of jurisdictions in the U.S – or, by way of net metering policies that are more common as a renewable valuation method, but are uncertain in terms of their long-term payback potential.