On April 16, 2014, the United States Department of Energy (DOE) released a draft solicitation for loan guarantees of up to $4 billion for innovative renewable energy and efficient energy projects located in the United States to help commercialize technologies that may be unable to obtain full commercial financing. The solicitation is intended to support technologies that are catalytic, replicable and market ready. While eligibility under the final solicitation will be determined on a project-by-project basis, the solicitation identifies five technology areas of interest under the solicitation:
Technology Area 1: Advanced Grid Integration and Storage—This area focuses on renewable energy systems that mitigate issues related to variability, dispatchability, congestion and control by incorporating technologies such as demand response or local storage. These advanced system designs will demonstrate greater grid compatibility of generation from renewable resources and open up an even larger role for renewable power generation. The DOE anticipates that qualifying projects may include, but are not limited to, the following: renewable energy generation, including distributed generation, that incorporates storage; smart grid systems incorporating any combination of demand response, energy efficiency, sensing and storage to enable greater penetration of renewable generation; microgrid projects that reduce CO2 emissions at a system level; and storage projects that clearly enable greater adoption of renewable generation.
Technology Area 2: Drop-in Biofuels—This area focuses on biofuels that are more compatible with today’s engines, delivery infrastructure and refueling station equipment. These projects take advantage of existing infrastructure by providing nearly identical bio-based substitutes for crude oil, gasoline, diesel fuel and jet fuel, or projects that produce intermediate fuel feedstocks that can be delivered to, and integrated into, existing oil petroleum refineries. These types of projects would not be restricted by current ethanol/biodiesel blend levels and could drive a catalytic change in the fuels market. The DOE anticipates qualifying projects may include, but are not limited to, the following: new bio-refineries that produce gasoline, diesel fuel and/or jet fuel; bio-crude refining processes; and modifications to existing ethanol facilities to gasoline, diesel fuel and/or jet fuel.
Technology Area 3: Waste-to-Energy—This area focuses on projects that harness waste products, such as landfill methane and segregated waste, as a source of energy. These types of projects will enable commercial-scale utilization of waste materials that are otherwise discarded, and produce significant clean, renewable energy. The DOE anticipates that qualifying projects may include, but are not limited to, the following: methane from landfills or ranches via biodigesters; crop waste to energy and bioproducts; and forestry waste to energy and cofiring.
Technology Area 4: Enhancement of Existing Facilities—This area focuses on projects incorporating renewable generation technology into existing renewable energy and efficient energy facilities in order to significantly enhance performance or extend the lifetime of the generating asset. The DOE anticipates that qualifying projects may include, but are not limited to, the following: incorporation of power production into currently non-powered dams; inclusion of variable speed pump-turbines into existing hydro facilities; and retrofitting existing wind turbines.
Technology Area 5: Efficiency Improvements—This area focuses on projects that incorporate new or improved technologies to increase efficiency and substantially reduce greenhouse gases. The DOE anticipates that qualifying projects may include, but are not limited to, those that: improve or reduce energy usage in residential, institutional and commercial facilities, buildings and/or processes; recover, store or dispatch energy from curtailed or underutilized renewable energy sources; recover, store or dispatch waste energy from thermal, mechanical, electrical, chemical or hydro-processes.
The draft solicitation will be open for public comments for 30 days and public meetings are scheduled for Austin, Texas, on Monday, April 21, Denver, Colorado, on Thursday, April 24, Arlington, Virginia, on Monday, April 28 and Minneapolis-St. Paul, Minnesota, on Tuesday, May 6, 2014.
For more information about the topics addressed in this Legal Update, please contact J. Paul Forrester or your regular Mayer Brown lawyer.
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