Department of Energy Announces New Loan Guarantee Program for Renewable Energy and Energy Efficiency Projects

08 May 2014 Renewable Energy Outlook Blog

The Department of Energy’s Loan Program Office (the “DOE”) announced on April 16, 2014, a new loan guarantee program for up to $4 billion under Section 1703 of Title XVII of the Energy Policy Act. The announcement coincides with the DOE’s release of a Draft Renewable Energy and Energy Efficiency Project Solicitation (the “Draft Solicitation”) for innovative renewable energy and efficient energy projects in the U.S. that reduce, avoid, or sequester greenhouse gases. The aim of the Draft Solicitation is to foster renewable energy and energy efficiency technologies that are “catalytic, replicable, and market ready.”

The Draft Solicitation identifies five (5) technology areas of interest to the DOE.

Advanced Grid Integration and Storage

The technologies in this area are focused on renewable energy systems that mitigate issues related to variability, dispatchability, congestion, and control. This area encompasses technologies such as: renewable energy generation, distributed generation, smart grid systems, demand response, energy efficiency, micro-grid projects, storage projects, and other advanced systems designs.

Drop-in Biofuels

The projects in this area focus on biofuels that are more compatible with today’s engines, delivery infrastructure and refueling station equipment. Eligible technologies in this area include: nearly identical bio-based substitutes for crude oil, gasoline, diesel fuel, intermediate fuel feedstocks and modifications to existing production facilities.

Waste-to-Energy

This area focuses on projects harnessing waste products, such as landfill methane and segregated waste, as a source of energy, and are intended to enable commercial scale utilization of waste materials which are otherwise discarded. The types of eligible technologies in this category include: methane from landfills or ranches via biodigesters, crop waste to energy and bioproducts, and forestry waste to energy and cofiring.

Enhancement of Existing Facilities

Projects under this category are intended to significantly enhance performance or extend the lifetime of the generating asset by incorporating renewable generation technology into existing renewable energy and efficient energy facilities. The qualifying projects under this area include: integration of power production into currently non-powered dames, the addition of variable speed pump-turbines into existing hydro facilities, and retrofitting existing wind turbines.

Efficiency Improvements

Under this category, the DOE seeks to encourage projects that incorporate new or improved technologies which increase efficiency and substantially reduce greenhouse gases. Projects under this category may include projects that: reduce or improve energy usage in residential, commercial, or industrial buildings, facilities, or processes; recover, store, or dispatch energy from curtailed or underutilized renewable energy sources; and, recover, store or dispatch waste energy from thermal, mechanical, electrical, chemical, or hydro processes.

While each proposal’s eligibility will be evaluated on a project-by-project basis, the Draft Solicitation potentially offers access to capital to a broad range of technologies. Applications responding to the final solicitation will undergo a two-part review: Part I will determine the initial eligibility of a project and whether it is ready to proceed. Those applications that clear Part I will then proceed to Part II, which includes the full application process. Finally, viable projects that are granted a conditional commitment from the DOE will then undergo a complete underwriting process and negotiation of terms for the loan guarantee.

For more information on the Draft Solicitation, please visit the DOE’s webpage.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services

Insights