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July 09, 2013
DOE drafts $8 billion loan solicitation

One week after President Obama announced the administration’s multiprogram Climate Action Plan, the Department of Energy (DOE) stepped to the plate with a draft solicitation that would open the door to a new $8 billion loan guarantee program.  The DOE says the guarantees will support energy projects that are in line with the president’s plan.  Four specific technology areas are listed in the solicitation, but the DOE says it welcomes comments that identify other projects that are within DOE’s statutory authority. 

$34 billion in projects

Section 1703 of Title XVII of the Energy Policy Act of 2005 authorizes the DOE to support innovative clean energy technologies that avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases (GHGs).  Projects deploying these technologies are typically unable to obtain commercial financing due to the high associated risks.  Once finalized, the proposed solicitation will be the sixth issued in support of Section 1703. 

DOE loan programs currently support a $34.4 billion portfolio of more than 30 projects, including one of the world’s largest wind farms; several of the world’s largest solar generation and thermal energy storage systems; one of the country’s first commercial-scale cellulosic ethanol plants; the first commercial nuclear power plant to be licensed and built in the U.S. in 3 decades; the first two all-electric vehicle manufacturing facilities in the U.S.; and more than a dozen new or retooled auto manufacturing plants across the country.  The DOE reports that one recipient –Tesla Motors–recently repaid the entire remaining balance on its $465 million loan 9  years ahead of schedule.

Examples

The draft solicitation identifies the following technologies:

  • Advanced resource development.  This area covers new or significantly improved technologies for the development, recovery, and production of coal, natural gas, and oil resources.  Qualifying projects may include novel oil and gas drilling, stimulation, and completion technologies, including dry fracking, which avoid, reduce, or sequester air pollutants or anthropogenic emissions of GHGs; use of associated gas production to reduce flaring; coal-bed methane recovery to reduce methane emissions with coal mining; underground coal gasification; and methane emissions capture from energy production, transmission, or distribution.
  • Carbon capture.  Carbon capture selectively removes CO2 from process streams and flue gases and produces a concentrated stream that can be compressed and transported to a permanent storage site.  Qualifying projects may include CO2 capture from synthesis gases in fuel reforming or gasification processes; CO2 capture from flue gases in traditional coal or natural gas electricity generation; and CO2 capture from effluent streams of industrial processing facilities.
  • Low-carbon power systems.  Fossil-based electricity generation traditionally involves fuel combustion with air as a heat and power source, producing a flue gas with low concentrations of CO2; this makes adoption of carbon capture expensive and inefficient.  Novel processes have been proposed with carbon mitigation in mind that generate fossil-based electricity and do not require traditional gas separation technology to capture CO2 emissions.  This area seeks projects that utilize fossil fuels for electricity generation using novel processes or improved technologies that can seamlessly integrate with CO2 storage or beneficial reuse.  Qualifying projects may include coal or natural gas oxycombustion; chemical looping processes; hydrogen turbines; and synthesis gas, natural gas, or hydrogen-based fuel cells.
  • Efficiency improvements.  Industrial fossil-based systems typically utilize only a fraction of the energy available from their feedstocks and often reject a large amount of low-quality and waste heat.  Technology improvements to increase the efficiency of fossil-based systems can result in reduced emissions-per-product and better feedstock utilization.  This area is seeking projects that incorporate new or improved technologies to increase efficiencies and substantially reduce GHG emissions associated with fossil-fuel supply and use.  Qualifying projects may include combined heat and power; waste heat recovery for industrial facilities; and high-efficiency distributed fossil power systems.

Notwithstanding the above examples, the DOE says that initial eligibility will be evaluated on a project-by-project basis.

Click here for the draft solicitation. 

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