DOE Renewable Energy Loan Guarantees Could Be Announced Within Two Weeks

The first loan guarantees issued by the Department of Energy (DOE) could reportedly be announced within the next two weeks, with awards likely going to solar and energy efficiency technologies.

Energy Secretary Steven Chu said Friday that nuclear power projects wouldn’t be in the first set of disbursements, Dow Jones Newswires reported last week.

Chu had on Feb. 19 detailed measures taken by the DOE to streamline the spending of economic recovery money approved by Congress, including increasing the number of staff to deal with the loans, loan guarantees, and grants, and restructuring the way the department charges fees.

Speaking at a Platts Energy Podium event, Chu had then said that loan guarantees under consideration would be decided on by April or May. In a statement, the DOE also said that loan guarantees applied for under the economic stimulus package would be decided on by early summer.

Under the $787 billion economic recovery bill signed by President Barack Obama, the DOE will issue $32.7 billion in grants and another $6 billion in loan guarantees for alternative and advanced energy technologies. Chu also said the DOE would likely disperse 70% of the total $38.7 billion the department received in the stimulus package by the end of 2010.

The loan guarantee program has been heavily criticized for its slow pace. It was called for in a 2005 law but was not established until 2007. Through December 2008, the DOE had issued five solicitations for projects, and it had received 11 applications requesting about $8.2 billion in loan guarantees. The DOE has yet to approve a single application.

Last week, DOE Inspector General Gregory Friedman said in his audit of the program (PDF) that the agency had taken several positive steps in the approval process. These included establishing a credit review board, issuing final regulations for the guarantee program, and hiring experienced staff and consultants to work on major aspects of the projects.

But, he noted that “in a number of critically important areas, the Department had not fully developed and implemented controls necessary to successfully manage the Program.” Those areas include the need to double staff and establish disbursement procedures and default risk guidelines.

Sources: Dow Jones Newswires, DOE, Platts