The Department of Energy (DOE) announced last week that it would make available an additional $30 billion in loan guarantees for renewable energy projects. At the same time, it pledged another $750 million in subsidy costs to support projects that increase the reliability, efficiency, and security of the national grid.
Projects eligible for the new loan guarantee solicitation must involve noncommercial—but commercial-ready—technologies that manufacture or produce renewable energy. Categories include alternative fuel vehicles; biomass; efficient electricity transmission, distribution, and storage; energy-efficient building technologies and applications; geothermal; hydrogen and fuel cell technologies; energy efficiency; solar; wind; or hydropower.
The solicitation for transmission technologies requires that projects begin by Sept. 30, 2011. Eligible projects should involve new or upgraded lines of at least 100 miles of 500 kV or higher; 150 miles of 345-kV lines; at least 30 miles of transmission cable under water; a high-voltage direct current component; construction of a major interregional connector; construction of a project in a DOE-designated “national interest electric transmission corridor”; construction of a project associated with offshore generation, such as open ocean wave energy, ocean thermal, or offshore wind; construction of a project that mitigates a “substantial reliability risk” for a major population center; or construction of a set of improvements to an integrated system within a state or region that together aggregate to meet certain criteria.
The actual value of the loan guarantees depends upon the specific applications and the market conditions, both of which determine how much funding is needed to subsidize the loan. The DOE’s lending authority includes up to $8.5 billion in loan guarantees supported by 2009 annual appropriations as well as $2 billion in loan subsidies from the American Recovery and Reinvestment Act, which can support billions in loans for renewable energy and electric power transmission projects. The Recovery Act also provides up to $500 million in loan subsidies to support loans for biofuel projects.
“This administration has set a goal of doubling renewable electricity generation over the next three years. To achieve that goal, we need to accelerate renewable project development by ensuring access to capital for advanced technology projects,” said Energy Secretary Steven Chu in a statement. “We also need a grid that can move clean energy from the places it can be produced to the places where it can be used and that can integrate variable sources of power, like wind and solar.”
The two solicitations marked the sixth and seventh rounds of solicitations by the DOE’s Loan Guarantee Program. Applications will be accepted over the next 45 days.