DOE announces $8 billion in loan guarantees for coal indust

The U.S. Department of Energy (DOE) last week announced a solicitation for up to $8 billion in federal loan guarantees for coal-powered projects that employ advanced technologies to reduce or sequester emissions of air pollutants and greenhouse gases.
 
This marks the third round of solicitations for the DOE’s Loan Guarantee Program. The DOE said the program encourages the commercial use of new or significantly improved energy technologies and is an important step in paving the way for clean energy projects. 
 
The solicitation will make available $6 billion in loan guarantee authority for incorporating carbon capture and storage (CCS) or other emissions-reducing carbon technologies into industrial gasification activities and retrofitted and new coal-based power generation facilities.
 
An additional $2 billion in loan guarantee authority will be made available for advanced coal gasification projects, which convert coal cleanly into electricity, hydrogen, and other valuable energy products.
 
The loan guarantee process (PDF) is organized into four phases: application, project evaluation, term sheet/conditional commitment, and final approval and closing of a Loan Guarantee Agreement.
 
Selection criteria for the clean energy projects under this solicitation will focus on a project’s ability to avoid, reduce, or sequester air pollutants or greenhouse gas emissions; the speed with which the technologies can be commercialized; the prospect of repayment of the guaranteed debt; and the potential for long-lasting success of these technologies in the marketplace.
 
Last week’s solicitation builds on two previous rounds of solicitations issued by the DOE, which supported energy efficiency, renewable energy, nuclear energy, and fossil energy projects. In October 2007, the DOE invited 16 project sponsors responding to the DOE’s August 2006 solicitation to submit full applications for a loan guarantee. Second, on June 30, 2008, the DOE issued three additional solicitations with the potential to provide $30.5 billion in loan guarantees. The DOE is currently reviewing the applications received to date from these two solicitations.
 
The DOE’s Loan Guarantee Program, authorized by Title XVII of the Energy Policy Act of 2005 (EPAct), aims to facilitate early commercial use of new or significantly improved technologies in energy-related projects.
 
Loan guarantees issued by the DOE will be backed by the full faith and credit of the U.S.
 
Source: DOE