NEW YORK -(Dow Jones)- In a move that could significantly aid in the commercialization of clean-technology projects, the U.S. Department of Energy is about to issue solicitations for up to $10 billion of loan guarantees for companies that have new, viable energy-efficiency, renewable-energy and electric-transmission technologies.
The department will issue a new request for proposals in the next few weeks, Alexander Karsner, assistant secretary of the DOE's Office of Energy Efficiency and Renewable Energy, said in a conference call with the press at WindPower 2008, an industry conference hosted by the American Wind Energy Association in Houston.
(This story also appeared in Clean Technology Investor, a daily newsletter published by Dow Jones & Co.)
"We're trying to be inductive of a revolution. The government shouldn't prescribe what that is but open up its balance sheet and avail itself to those who can provide these technologies," Karsner said in an interview with Clean Technology Investor.
Under the same loan guarantee program, the department will also issue solicitations for up to $18.5 billion in guarantees for nuclear power facilities and up to $2 billion for nuclear facilities for the "front-end" of the nuclear fuel cycle, including uranium enrichment.
Later this summer, it intends to issue a solicitation for loan-guarantee applicants for up to $8 billion for advanced fossil-energy projects. In total, Congress gave the DOE approval to issue up to $42.5 billion in these loan guarantees over a two-year period.
In Karsner's view, the industry hasn't fully understood how broadly the Energy Department is looking at technologies eligible for the program, authorized under the 2005 Energy Policy Act but rules for which have just been settled this year. "The perception has been that it's to augment project finance of single- generation facilities," Karsner said. "But we have to have it broader. We have to look at everything that reduces greenhouse gases."
Many start-ups in the renewable energy industry face a conundrum. They are able to raise traditional venture capital to get their ideas off the ground and to fund pilot projects. But commercialization requires capital beyond the abilities of initial venture investors. At the same time banks are reluctant to fund experimental technologies like new thin-film solar module production.
That's where the Energy Department's loan guarantee program comes in handy. Under the program, the "full faith and credit of the United States is pledged to the payment of guaranteed obligations," analysts at Fitch Ratings wrote in a March note about the program. "The loans will have the same rating as U.S. government obligations 'AAA'," the Fitch analysts continued in their report.
Having the backing of the U.S.
