DOE Releases Draft of $8B loan Guarantee Solicitation for Advanced Fossil Energy Projects

DOE releases draft of $8B loan guarantee solicitation for advanced fossil energy projects

The US Department of Energy (DOE) released a draft for comment of an $8-billion loan guarantee solicitation for innovative and advanced fossil energy projects and facilities that substantially reduce greenhouse gas and other air pollution. The program is part of President Obama’s climate action plan. (Earlier post.)

The Advanced Fossil Energy Projects solicitation, authorized by Title XVII of the Energy Policy Act of 2005 through Section 1703 of the Loan Guarantee Program, will be open for comments from industry, stakeholders, and the public until early September.

The solicitation will support new or significantly improved advanced fossil energy projects and facilities—such as advanced resource development, carbon capture, low-carbon power systems, and efficiency improvements—that reduce emissions of carbon dioxide, methane, and other greenhouse gas pollution. The Energy Department will make available up to $8 billion in loan guarantee authority through this solicitation.

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

Within the draft solicitation, DOE has included a sample list illustrative of potential technologies for consideration in four areas of interest:

  • Advanced resource development: novel oil and gas drilling, stimulation, and completion technologies, including dry fracking, that avoid, reduce, or sequester air pollutants or anthropogenic emission of greenhouse gases; use of associated gas production to reduce flaring; coal-bed methane recovery to reduce methane emissions into the atmosphere associated with coal mining; underground coal gasification (UCG); methane emissions capture from energy production, transmission or distribution.
  • Carbon capture: CO2 capture from synthesis gases in fuel reforming or gasification processes; CO2 capture from flue gases in traditional coal or natural gas electricity generation; CO2 capture from effluent streams of industrial processing facilities.
  • Low-carbon power systems: coal or natural gas oxy-combustion; chemical looping processes; hydrogen turbines; synthesis gas, natural gas, or hydrogen based fuel cells.
  • Efficiency improvements: combined heat and power; waste heat recovery on industrial facilities; high-efficiency distributed fossil power systems.

DOE welcomes public comment on a range of issues, including technical analysis of the specifications of these as well as other technologies, and their potential to reduce greenhouse gas emissions. DOE also welcomes comments that identify other technologies that it should consider supporting through this loan guarantee solicitation. DOE will consider public feedback in defining the scope of the final solicitation.

The Department of Energy’s loan programs are supporting a large, diverse $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 new commercial nuclear power plant to be licensed and built in the US in three decades; the first two all-electric vehicle manufacturing facilities in the US; and more than a dozen new or retooled auto manufacturing plants across the country. One recipient—Tesla Motors—recently repaid the entire remaining balance on its $465 million loan nine years ahead of schedule.

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