A major expansion of federal loan programs that could help the fight against climate change was signed last week by President Biden.
$350 billion in additional federal loans and loan guarantees are authorized by the law. The law offers incentives for the likes of electric cars, solar panels, batteries and heat pumps.
The aid could breathe life into futuristic technologies that banks might find too risky to lend to or into projects that are just short of money.
Dan Reicher was an assistant energy secretary in the Clinton administration. It's a big deal that this huge amount is available.
The expansion of the loan authority carries risks for Mr. Biden and the Democrats, who passed the bill without a single Republican vote. Conservatives seized on the failure of Solyndra to criticize the Obama administration's climate and energy policies.
The program has been sustainable according to backers of the program. More money than the failed Solyndra loan has been repaid by the department.
The Energy Department's loan programs expanded during the Obama administration. When it only sold two-door electric sports cars, the department gave the company a crucial loan that helped it grow.
The loan office was less active under the Trump administration. The team is trying to change that. The department said last month that it was going to lend $2.5 billion to GeneralMotors andLG Energy Solution to build electric-car battery factories.
77 applications for $80 billion in loans sought before the climate law was approved are currently being reviewed by the loan program office. $100 billion will be added to existing loan programs for financing production of electric vehicles and for projects on tribal lands as a result of the inflation reduction act. Up to $250 billion in loan guarantees and $5 billion in grants will be added.
The private sector wants to use our resources again, according to the director of the Energy Department's loan programs office. There is a lot of work to be done. We need to identify all the areas that are eligible.
The Palisades Power Plant, a nuclear facility on Lake Michigan that closed in May, could be one of the beneficiaries of the new loan money. In the PJM energy market, which serves homes and businesses in 13 states, the plant had struggled to compete.
Nuclear power has been made a priority by the Biden administration to eliminate carbon dioxide emissions from the power sector. Billions of dollars have been offered by the administration to help existing facilities like the Diablo Canyon Power Plant stay open longer. Small modular reactor, which the industry has said would be cheaper, safer and easier to build than a large nuclear reactor, is one of the technologies it is backing.
The loan program and other opportunities for its own small reactor as well as bringing the shuttered plant back online are being reviewed by the owner of the facility.
There are a number of obstacles that need to be overcome to restart the facility, but we will work with the state, federal government, and a yet to be identified third-party operator to see if this is a viable option.
In addition to nuclear projects, the loan money could spur development of other clean energy sources, such as converting dams that don't produce electricity into new power facilities like those being worked on in the Pacific Northwest by a company based in West Palm Beach, Fla.
Conversion of old fossil fuel plants into clean energy facilities is being explored. Old oil and gas wells, old coal power plants, and old coal mines could be used for renewable energy. It can take a long time to build projects on undeveloped land because they require extensive environmental review and can face local opposition.
Mr. Reicher said that they were in a lot of trouble with the amount of solar they needed. We have to find at least six to 10 million acres of land in the U.S. to site the projected build out of utility scale solar. That is big.
Other developers are hoping that the government will help finance their technologies.
Fervo Energy is a Houston company that uses the same horizontal drilling techniques as oil and gas producers in order to develop a renewable energy source. He said that his company can balance out the intermittent nature of wind and solar power by producing clean energy 24 hours a day.
Mr. Latimer claims that his techniques will lower the cost of geothermal power, which is more expensive than electricity from natural gas or solar panels. He has projects in Nevada, Utah, Idaho and California that could be helped by the new loan authority.
It has been a topic of discussion within the industry. We weren't expecting good news a month ago, but we're getting ready for prime time. We can develop a lot of geothermal in the US.
Critics say that the new law could lead to more waste and fraud. Several solar projects that received loans from the Energy Department have failed or never got off the ground.
The federal loan guarantees for the large nuclear plant in Georgia have been received. Billions of dollars in cost overruns have been criticized by the public.
Gary Ackerman is the founder and former executive director of the Western Power Trading Forum, a coalition of more than 100 utilities and other businesses that trade in energy markets. There are many stranded assets that never live up to their promises.
Jamie Carlson, a senior adviser to the energy secretary, said the department learned from its mistakes and developed a better approach to reviewing and approving loan applications. It worked with businesses to make sure they succeeded.
Ms. Carlson used to work at SoftBank Energy. You spent up to two years in purgatory.
The department's loans help technologies and companies that have demonstrated some commercial success but need more money to become financially viable. She said that it is there to finance technologies that are proven but also to banks that are seen as riskier.
More federal loans and loan guarantees could help the energy industry.
William W. Funderburk Jr., a former commissioner at the Los Angeles Department of Water and Power, said that the projects that can be done will go quicker. This is a good change for the industry.
All Rights Reserved © 2024
