Source: Thinkstock
The U.S. Energy Department has put forth a plan offer up to $4 billion in loans to help further stimulate the renewable energy sector.
This round of funding comes after the 2009 stimulus to back renewable projects such as wind, solar, and geothermal. The funding has since been the object of political attacks since the failure of Solyndra.
Even with the failure, the Obama administration has continually reinforced that most of the projects invested in have done well. He even goes so far as to credit the funding with the recent ability for the U.S. solar industry to produce industrial scale power plants.
What’s interesting about the new round of funding is the new investment focus. The Department of Energy states, “In support of the Administration’s all-of-the-above energy strategy, the Department of Energy issued a draft loan guarantee solicitation today for innovative renewable energy and energy efficiency projects located in the U.S. that avoid, reduce, or sequester greenhouse gases.”
The Department identified five key areas that would attract investment:
- Advanced grid integration and storage
- Drop-in biofuels
- Waste-to-energy
- Enhancement of existing facilities
- Efficiency improvements
Even more intriguing is that once this solicitation is accepted the DOE will begin accepting new applications for two of its past solicitations: the $8 billion Advanced Fossil Energy Projects Solicitation, released in December 2013, and the $16 billion Advanced Technology Vehicle Manufacturing (ATVM) loan program.
The ATVM program, which lent to companies like Tesla (NASDAQ:TSLA) in its first $8 billion round, is meant to “support the production of fuel-efficient, advanced technology vehicles and components in the U.S.,” as stated by the DOE. The money has been used successfully by Ford Motor (NYSE:F) to retool several truck plants for the production of more fuel efficient cars and hybrids. Nissan Motor (NSANY.PK) also received money to build an advanced battery plant and produce the Nissan Leaf domestically.
Of course there were some disappointments in the pack. I’m sure everyone remembers Fisker Automotive.
The Advanced Fossil Energy Projects Solicitation is meant to support innovative advanced fossil energy projects that avoid, reduce, or sequester greenhouse gases.
The program supports projects such as advanced resource development, carbon capture, low-carbon power systems, and efficiency improvements that reduce emissions.
It will be interesting to see what companies apply and what projects will come of it. So far, it would appear that the administration’s “all of the above” approach will continue, despite high-profile failures. This might not bode well for traditional energy companies such as Exxon (NYSE:XOM) who continue to ignore the transformations within the energy industry.
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