Energy Secretary Steven Chu announced on July 29th that the Department of Energy will provide up to $30 billion in loan guarantees for renewable energy projects. Secretary Chu also announced that DOE will provide up to $750 million to support several billion dollars more in loan guarantees for projects that increase the reliability, efficiency and security of the nation's transmission system. The two new loan guarantee solicitations are being funded partly through the American Recovery and Reinvestment Act and partly through 2009 appropriations.
The lending authority to be provided by DOE includes:
- Up to $8.5 billion in lending authority supported by 2009 annual appropriations for renewable energy.
- Up to $2 billion in subsidy costs, provided by the ARRA, to support billions in loans for renewable energy and electric power transmission projects.
- Up to $500 million in subsidy costs to support loans for cutting-edge biofuel projects funded by the ARRA.
- Up to $750 million in subsidy costs, provided by the ARRA, to support loans for large transmission infrastructure projects in the U.S. that use commercial technologies and begin construction by September 30, 2011.
The two solicitations issued July 29th are the sixth and seventh rounds of solicitations by the DOE's Loan Guarantee Program, which encourages the commercial use of new or improved energy technologies to help foster clean energy projects. These solicitations make loan guarantees available to projects that commence construction on or before September 30, 2011, and create or retain jobs in the United States.
One of the solicitations—focusing on innovative energy efficiency, renewable energy and advanced transmission and distribution technologies—is applicable to projects employing a new or significantly improved technology that is not a commercial technology. This solicitation additionally provides that eligible biofuels projects must be designed to produce transportation fuels from biomass and similar sources that substantially reduce life-cycle greenhouse gas emissions compared to other transportation fuels.
The second solicitation—focusing on electric power transmission infrastructure investment—requires the use of commercial technology in a complex electric transmission systems project.
Both solicitations also set specific requirements for the manner in which the eligible projects are to be developed, including certain requirements with respect to wages and the origin of iron, steel and manufactured goods.
The DOE has streamlined its processes to accelerate these new loan guarantee solicitations, establishing rounds of reviews with applicants applying earlier enjoying an advantage in review priority. The first part of applications for the first round of loan guarantees will be accepted over the next 45 days, but no later than September 14, 2009.