DOE announces draft solicitation for Section 1703 loan guarantees

By Erin Voegele | April 22, 2014

The U.S. DOE has announced its intent to offer up to $4 billion in Section 1703 loan guarantees to support a wide variety of renewable energy and energy efficiency projects, including those for drop-in biofuels and waste-to-energy. A 30-day comment period on the scope of the final solicitation is now open. 

The DOE issued a draft loan guarantee solicitation on April 16 for renewable energy and energy efficiency projects in the U.S. that avoid, reduce or sequester greenhouse gases. Once finalized, the solicitation is expected to make as much as $4 billion in loan guarantees available to help commercialize technologies that may be unable to obtain full commercial financing. According to the DOE, the solicitation is intended to support technologies that are catalytic, replicable and market ready.

“Through our existing renewable energy loan guarantees, the Department’s Loan Programs Office helped launch the U.S. utility-scale solar industry and other clean energy technologies that are now contributing to our clean energy portfolio,” said Energy Secretary Ernest Moniz. “We want to replicate that success by focusing on technologies that are on the edge of commercial-scale deployment today.”

While any project that meets eligibility requirements is eligible to apply, the DOE has identified five-key technology areas of interest: advanced grid integration and storage; drop-in biofuels; waste-to-energy; enhancement of existing facilities; and efficiency improvements.

Under the category of drop-in biofuels, the DOE indicated that qualified projects may include—but are not limited to—new biorefineries that produce gasoline, diesel, and/or jet fuel; biocrude refining processes; and the modification of existing ethanol facilities to gasoline, diesel and/or jet fuel. For waste-to-energy, the DOE indicated that qualified projects may include—but are not limited to—methane from landfills or ranches via biodigesters; crop waste-to-energy and bioproducts; and forestry waste to energy and cofiring.

According to the DOE, it welcomes public comment on the announcement and will consider public feedback in defining the scope of the final solicitation. In addition to initiating a 30-day public comment period, the department will hold a series of public meetings. Public meetings are currently scheduled to be held in Austin, Texas; Denver; Arlington, Va.; Minneapolis; and Stanford, Calif.

Once the solicitation is finalized, the DOE’s Loan Programs Office will be accepting applications in three areas, which also include the $8 billion Advanced Fossil Energy Projects Solicitation that was released in December, and the $16 billion Advanced Technology Vehicle Manufacturing loan program.

The LPO currently supports a diverse portfolio of more than $30 billion in loans, loan guarantees and commitments, supporting more than 30 projects nationwide, including a biofuel project. Under its Section 1705 loan guarantee program, the DOE is supporting the Abngoa Bioenergy’s cellulosic ethanol plant under development in Hugoton, Kan.

Additional information on the draft loan guarantee solicitation is available on the DOE’s LPO website.