Guest essay by Eric Worrall
The Obama administration has just announced $12 billion in new Federal loan guarantees for renewables businesses.
According to a Whitehouse press release;
FACT SHEET: President Obama Announces New Actions to Bring Renewable Energy and Energy Efficiency to Households across the Country
President Obama is committed to taking responsible steps to address climate change, promote clean energy and energy efficiency, drive innovation, and ensure a cleaner, more stable environment for future generations. That is why at Senator Reid’s National Clean Energy Summit later today, he is announcing a robust set of executive actions and private sector commitments to accelerate America’s transition to cleaner sources of energy and ways to cut energy waste.
To continue to reinforce American leadership in deploying clean energy and cutting energy waste while creating jobs and reducing carbon pollution, the Administration is announcing the following actions:
Making $1 Billion in Additional Loan Guarantee Authority Available and Announcing New Guidelines for Distributed Energy Projects Utilizing Innovative Technology: Distributed Energy Projects are currently driving innovation and transforming U.S. energy markets. Technologies such as rooftop solar, energy storage, smart grid technology, and methane capture for oil and gas wells, solve key energy challenges. Catalyzing these technologies and demonstrating the viability of these markets would create economic opportunity, strengthen energy security, transform certain energy markets, and reduce greenhouse gas emissions. To accelerate the pace of innovation in distributed energy, the Department of Energy is:
Inviting Innovative Distributed Energy Projects to Apply to More Than $10 Billion in Current Loan Guarantees: The Department of Energy is supplementing its current loan guarantee solicitations to invite applications for Distributed Energy Projects. The current Solicitations, totaling more than $10 billion in loan guarantee authority, are now clearly unlocked to support scale up of Distributed Energy Projects utilizing innovative technology. Today’s announcement includes guidance from the Department on how a Distributed Energy Project transaction could be properly structured.
Making Available $1 Billion in Additional Loan Guarantee Authority for New, Innovative Projects: As part of its new push for Distributed Energy Projects utilizing innovative technology, the Department of Energy is providing up to $1 billion in additional loan guarantee authority through its current Solicitations for new Renewable Energy and Energy Efficiency Projects and Fossil Energy Projects. This significantly boosts the resources available to new applicants.
Federal renewable loan guarantee schemes have attracted significant criticism in the past, for example when Solyndra went spectacularly bust in 2012, a bankruptcy which cost US taxpayers $535 million in lost federal loan guarantees. Perhaps President Obama believes his administration has learned from that experience.