A Flood Of Energy Awards

The final week in September was a big one for the clean energy industry and for clean energy researchers. During that week, the Department of Energy awarded $5.9 billion in loan guarantees for clean energy manufacturers and $156 million in Advanced Research Projects Agency-Energy (ARPA-E) grants to clean energy inventors and technology entrepreneurs.

The new loan guarantees mean that, over the past two years, DOE has backed some $16 billion in loans for various clean energy manufacturers through the American Recovery & Reinvestment Act of 2009 (ARRA). The loan guarantee program does not provide loans but offers federal guarantees to back up loans in case of failure. The program’s goal is that by offering government support, private investors will be more willing to put their money into risky, but potentially game-changing, energy projects.

But all projects that receive guarantees must obtain private funding first, according to agency rules. In the case of Solyndra, the infamous and now-bankrupt solar manufacturer, the firm raised about $1 billion in private investments, and the U.S. is on the hook for $530 million of that amount through a DOE loan guarantee (C&EN, Oct. 3, page 28).

DOE’s ARRA-funded loan guarantee program came to an end on Sept. 30, the last day of fiscal 2011. Under federal rules, all ARRA funds had to be spent by the close of the fiscal year. And also under government rules, about 10% of each guaranteed amount must be set aside in a reserve pool in case a loan fails.

To meet the deadline, more than a quarter of the total ARRA loan guarantees were processed in a very busy last week of the program, according to DOE figures.

The rush to meet the end-of-year deadline was criticized by Rep. Clifford B. Stearns (R-Fla.), chair of the House Energy & Commerce Oversight & Investigations Subcommittee, which is investigating the Solyndra loss. He warned against “rushing out more Solyndras in these final hours.”

Of the $5.9 billion awarded at the end of September, $4.7 billion went to support loans for four photovoltaic (PV) solar projects in California—$1.5 billion to install 550 MW of ground-level solar panels; $1.4 billion to install 753 MW of rooftop solar panels; $1.2 billion for a 250-MW PV solar “ranch”; and $646 million for a 230-MW, thin-film solar project. Two other guarantees would support solar installations in the West—$737 million for a 110-MW concentrating solar power tower project in Nevada and $337 million for a 150-MW PV facility in Arizona. The remainder would guarantee a $132 million loan for a commercial-scale cellulosic ethanol plant in Kansas.

In all, $13.3 billion of the $16.1 billion ARRA-funded program—or 16 of the 28 projects receiving guarantees—supports loans for solar-related projects.

DOE also offers another $10.6 billion for clean energy projects through a separate loan guarantee program that is not dependent on stimulus money. Some $10.3 billion of this is going to two nuclear projects that are in the planning stages.

Through guarantees made with stimulus funds and congressional appropriations, DOE is backing about $26 billion in clean energy loans.

Also at the end of September, DOE announced $156 million in grants to 60 research teams under DOE’s ARPA-E program, which funds transformative energy research projects. It is the fourth round of ARPA-E grants.

In the two years since it was first funded, ARPA-E has provided $522 million to 180 projects, said Arun Majumdar, program director. “History shows that America is at its best when we innovate,” Majumdar said when announcing the latest round of awardees. “Today’s small but strategic investments in these teams by ARPA‑E can pay big dividends down the road and bring into the market groundbreaking new technologies.”

The 60 ARPA-E projects announced in this latest round of grants are in a wide range of areas, including improvements in biofuel production; alternatives to rare-earth minerals; support for technologies that store, transport, and use thermal energy; and technologies that further automate the electricity grid and enhance grid connection of PV-generated electricity.

Among the recent projects, half will be led by universities, 23% by small businesses, 12% by large businesses, 13% by national labs, and 2% by nonprofits.

Majumdar also noted that 11 of ARPA-E’s older projects have secured more than $200 million in outside private capital investments after gaining DOE support.

Like the loan guarantee program, ARPA-E was established by Congress before the election of President Barack Obama but was not funded until his Administration was in place. Both programs gained initial money through stimulus funding and both were strongly supported by Energy Secretary Steven Chu.