Innovative renewable energy and energy-efficiency projects that could reduce, avoid or sequester greenhouse gases may be eligible for up to $4 billion in loan guarantees from the Loan Programs Office (LPO) of the Department of Energy.
The LPO issued a draft Renewable Energy and Efficient Energy Projects Solicitation on April 16 to support renewable energy and energy-efficiency technologies that are catalytic, replicable and market ready.
Businesses often have difficulty obtaining full financing to commercialize innovative technologies. Conventional lenders do not want to take on the perceived risks associated with technology that has never been deployed at commercial scale. LPO loan guarantees give energy innovators a path to bring their products to market, while creating solutions to the nation’s challenges and stimulating the economy.
To be considered for a loan, projects must:
- Use an innovative technology or system
- Reduce, avoid or sequester greenhouse gases and support the President’s Climate Action Plan
- Be located in the U.S., but may be foreign owned
- Be able to repay loan principal and interest
The solicitation seeks applications covering a range of technologies that reduce greenhouse gas emissions and significantly improve on existing technologies already deployed in the U.S. The LPO has specifically identified five areas of focus:
Advanced grid integration and storage
The focus is on renewable energy systems that incorporate technologies such as demand response or local storage to mitigate issues related to variability, dispatchability, congestion and control. These advanced system designs will improve the grid compatibility of renewable energy and open up a larger role for renewable generation. Qualifying projects may include:
- Renewable energy generation, including distributed generation, incorporating storage
- Smart grid systems enabling greater penetration of renewable generation through any combination of demand response, energy efficiency, sensing and storage
- Micro-grid projects that reduce carbon dioxide emissions at a system level
- Storage projects that clearly enable greater adoption of renewable generation
The goal of this category is to develop biofuel products that are more compatible with today’s engines, delivery infrastructure and refueling station equipment. Eligible projects would provide nearly identical bio-based substitutes for crude oil, gasoline, diesel and jet fuel; or produce intermediate fuel feed stocks that can be integrated into existing oil petroleum refineries. These types of projects would not be restricted by current ethanol and biodiesel blend levels. Qualifying projects may include:
- New bio-refineries that produce gasoline, diesel fuel or jet fuel
- Bio-crude refining processes
- Modifications to existing ethanol facilities
This area focuses on projects that turn waste products such as landfill methane and segregated waste into an energy source. These types of technologies will enable commercial-scale use of waste materials that are otherwise discarded and produce significant clean, renewable energy. Qualifying projects may include:
- Methane from landfills or ranches via bio-digesters
- Crop waste-to-energy and bio-products
- Forestry waste-to-energy and co-firing
Enhancement of existing facilities
These technologies will incorporate renewable generation technology into existing renewable energy and efficient energy facilities to significantly enhance performance or extend the lifetime of the generator. Qualifying projects may include:
- Incorporation of power production into currently non-powered dams
- Inclusion of variable-speed pump-turbines into existing hydroelectric facilities
- Retrofitting existing wind turbines
Incorporating new or improved technologies to increase efficiency and substantially reduce greenhouse gases is the focus of this category. Qualifying projects may include:
- Improve or reduce energy use in residential, institutional and commercial facilities, buildings or processes
- Recover, store or dispatch energy from curtailed or underused renewable energy sources
- Recover, store or dispatch waste energy from thermal, mechanical, electrical, chemical or hydro-processes.
This list of potential projects is not exhaustive. Ultimately, the LPO will evaluate applications on a project-by-project basis.
Understand the process
The LPO is accepting public comment on the draft through the end of May. Public meetings to answer questions and obtain comments on the draft are being held on May 6 in Twin Cities, Minnesota, and May 7 in Stanford, California. The first project submission deadline is expected to occur at the end of the summer.
To provide applicants with timely responses, the application process is divided into two stages. The first part will determine the project’s initial eligibility and whether it is ready to proceed. Applications that clear Part I then proceed to Part II, which includes the full application process. Viable projects that are granted a conditional commitment from DOE then undergo the complete underwriting process and negotiation of terms for the loan guarantee.
The Renewable Energy and Efficient Energy solicitation is authorized by Title XVII of the Energy Policy Act of 2005 through Section 1703 of the Loan Guarantee Program. The LPO currently manages a more than $30 billion portfolio of approximately 30 closed and committed projects nationwide, including leading edge renewable energy projects and advanced vehicle manufacturing facilities.