The U.S. Department of Energy on Thursday announced that it is issuing a loan guarantee program of up to $4 billion to support innovative renewable energy and energy efficiency projects that avoid, reduce, or sequester greenhouse gas emissions.
In support of the Obama administration’s Climate Action Plan, the DOE identified five key technology areas for the loan program to support. One is advanced grid integration and storage, which essentially means technologies that better support renewable power on the electric grid. Another is drop-in biofuels, which are biofuels that can be used in existing infrastructure.
The DOE also said the program would consider supporting waste-to-energy projects, energy efficiency improvement projects, and projects that would enhance existing hydroelectric facilities.
“As the President emphasized in his Climate Action Plan, it is critical that we take an all-of-the above approach to energy in order to cut carbon pollution, help address the effects of climate change and protect our children’s future,” said DOE Secretary Ernest Moniz in a statement. “Investments in clean, low-carbon energy also provide an economic opportunity.”
The Loan Guarantee Program is designed to encourage private investment while minimizing risk to taxpayers. It doesn’t provide direct financing but rather brings down lending rates to help spur private investment.
The Renewable Energy and Efficient Energy Projects Loan Guarantee Solicitation is the latest loan guarantee program issued by the Department. The DOE is also offering loan guarantees as part of the $8 billion Advanced Fossil Energy Projects program started last December and the $16 billion Advanced Technology Vehicle Manufacturing (ATVM) loan program.
In June, Moniz also announced the awarding of $100 million for the Energy Frontier Research Centers (EFRCs) to facilitate advances in science related to energy production, storage, and use.
“We are mobilizing some of our most talented scientists to join forces and pursue the discoveries and breakthroughs that will lay the foundation for our nation’s energy future,” Moniz said.
Also last month the DOE announced $33 million in funding for 13 new projects aimed at developing transformational fuel cell technologies for low-cost distributed power generation.
The DOE’s Loan Program Office currently supports a portfolio of more than $30 billion supporting over 30 projects. These include large wind farms, solar farms, energy storage systems, and revamped car manufacturing plants.
Carbon dioxide levels recently remained above 400 parts per million (ppm) for three consecutive months, surpassing a symbolic mark that has set the scientific community on edge as emissions continue to rise. To keep emissions from rising further and warming from exceeding the two 2°C (3.5°F) threshold that could lead to catastrophic damage, substantial cuts to emissions will have to be made by the middle of the century.