DoE Provides $12 Billion in Loan Guarantees So Far This Year

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Researched by Industrial Info Resources (Sugar Land, Texas--The U. S. Department of Energy (DoE) (Washington D.C), in order to help mitigate financial risks and encourage the development of clean-energy projects such as renewable energy and nuclear projects, has issued conditional loan commitments to 23 energy projects totalling nearly $41 billion.

The loan guarantee program advances and secures funding for renewable energy projects nationwide, ranging widely in terms of value and power source. Recipients range from an $8 billion loan-guarantee to Southern Company (NYSE:SO) subsidiary Georgia Power Company (Atlanta, Georgia) for the unit additions to the Vogtle Nuclear Power Plant to Nordic Windpower USA Incorporated's (Kansas City, Missouri) $16 million loan guarantee to expand its wind turbine manufacturing plant in Pocatello, Idaho. These two projects alone will create 600 permanent jobs when the projects become operational, and 3,500 temporary construction jobs during development and construction.

In 2010, the DoE Loan Programs Office issued more than $13.3 billion in loan guarantees for 14 power projects. So far this year, the department has issued more than $12 billion for 16 clean-energy generation projects.

Renewable energy developers depend on the loan guarantees when submitting their project to a utility for power purchase agreements, which are instrumental in obtaining financial investments for the capital-intensive projects.

While promoting renewable generation projects from solar, wind, hydro, biomass, nuclear and geothermal sources, the DoE Loan Programs Office is also promoting manufacturing of renewable energy components such as solar panels and wind turbines. U.S.-based companies such as Nordic Windpower, which manufactures wind turbines, and 1366 Technologies Incorporated (North Lexington, Massachusetts), which has a multi-crystalline solar panel manufacturing facility in North Lexington, are companies that have benefited from loan guarantees.

The DoE Loan Programs consist of three separate sections. These include:

• Section 1703, which supports clean-energy technologies for which developers find it difficult to obtain traditional financing because of high risk factors. These technologies include biomass, fuel cell, solar, wind, hydro, nuclear, advanced fossil energy coal, carbon sequestration technologies, electricity delivery and energy reliability, alternative fuel vehicles, industrial energy-efficiency projects, and pollution control equipment.



• Section1705, which seeks to augment the section 1703 program by promoting renewable energy projects, electric transmission projects and biofuels projects, which start construction no later than September 30, 2011, in order to address the current economic conditions.



• Section 136, or Advanced Technology Vehicle Manufacturing (ATVM), which consists of direct loans to support the development of advanced technology vehicles and associated components in the United States. An example of a recipient of this loan program is the electric automobile manufacturer Tesla Motors (Palo Alto, California). The company, which has an automoblie manufacturing plant in Fremont, California, received a $465 million conditional loan.

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