Abby L. Harvey
GHG Monitor
7/25/2014
Secretary of Energy Ernest Moniz said this week that his Department is ready and willing to help invest in new promising energy technologies, particularly when it comes to utilizing its remaining loan guarantee authority. “I want to say here, I want to make it very clear; we have approximately $40 billion of remaining authority. It is across the board in renewables, efficiency, in vehicles, nuclear, fossil. We have every intention of being very aggressive and obviously looking for good projects that can go through our pretty rigorous due diligence processes to continue to address the problem,” Moniz said at an event sponsored by the Bipartisan Policy Center and the American Energy Innovation Council, referring to DOE’s loan guarantee programs.
Addressing what has been termed the “valley of death” between development and proving scalability and economic feasibility at scale, Moniz noted that many times a constraint at play in the “valley” is a lack of funding, which the loan program can provide. “One of the programs that I think does address that is the loan program, which is looking at again providing debt financing for commercial projects. This really is getting technologies at commercial scale. We don’t want to support those to make the market, but we want to support those to get it established that these are viable commercial enterprises,” he said.
Moniz acknowledged that DOE’s loan guarantee programs have come under criticism, but stressed that he believed they have been successful. “We all know it’s been controversial at some times in it’s past. The fact is we have over $30 billion at play. … Of the 30 plus billion dollars in play, there’s only a slightly over 2 percent default rate. In some ways I would say even more telling, 10 percent of the congressionally appropriated loan loss reserve fund has been used," he said. "Sometimes the concern is maybe are we taking enough risk because these kinds of metrics are awfully good compared to a usual investment portfolio."
Funding Opportunities Available Across Sectors
Moniz also stressed that funding through DOE-sponsored loans is available for all energy sectors. “I do want to emphasize that we are serious about all of the above,” Moniz said. “Within all of the above, obviously there are certain areas where we really focus hard. If I start at the carbon intense end, coal, we have $6 billion in eight large projects of different types, coal power plants, and other kinds of industrial plants, for carbon capture, often carbon utilization, and sequestration. In addition, we have an $8 billion loan guarantee for fossil fuels that reduce carbon emissions. That’s an example of a pretty big pole in the tent.”
