DOE offers $8bn in loan backing for greenhouse gas reduction

The U.S. Department of Energy on Dec. 12 published a solicitation that makes up to $8bn in loan guarantee authority available to support innovative advanced fossil energy projects that avoid, reduce, or sequester greenhouse gases.

Authorized by Title XVII of the Energy Policy Act of 2005, loan guarantees under this new solicitation will help provide critical financing to support new or significantly improved advanced fossil energy projects – such as advanced resource development, carbon capture, low-carbon power systems, and efficiency improvements.

“Under the Obama Administration, the Energy Department is taking an all-of-the-above approach to American energy to ensure we develop all our abundant energy resources responsibly and sustainably,” said DOE Secretary Ernest Moniz. “Currently providing 80 percent of our energy, coal and other fossil fuels will continue to be a critical part of our energy portfolio as we move toward a low-carbon future. By helping to accelerate the introduction of innovative, clean fossil energy technologies ready for deployment at commercial-scale today, investments under this solicitation will help ensure we continue to have access to affordable, clean energy from all our domestic energy resources tomorrow.”

DOE published a draft solicitation on July 9, which opened a 60-day comment period. During this time, the Department said it listened to potential applicants and other stakeholders and then incorporated their feedback into the solicitation. So the solicitation includes new provisions intended to facilitate applications, ensure quick review, and foster successful public-private partnerships. 

Currently, the DOE’s Loan Programs Office (LPO) supports a large, diverse portfolio of more than $30bn supporting more than 30 closed and committed projects. Projects in the LPO portfolio include: one of the world’s largest wind farms; several of the world’s largest solar generation and thermal energy storage systems; the first new commercial nuclear power plant to be licensed and built in the U.S. in three decades; an electric vehicle manufacturing company that repaid its loan ahead of schedule; and more than a dozen new or retooled auto manufacturing plants across the country. 

With the publication of the Advanced Fossil Energy Projects solicitation, DOE is accepting applications through the Loan Programs Office web portal at apply.loanprograms.energy.gov, and expects to receive the initial applications by the end of February 2014. 

The schedule from here includes:

  • First Part I Submission Due Date: Feb. 28, 2014
  • First Part II Submission Due Date: May 30, 2014
  • Last Part I Submission Due Date: Oct. 30, 2015
  • Last Part II Submission Due Date: Jan. 29, 2016

The program is broken down into four areas

Technology Area 1: Advanced Resource Development – Resource development and extraction can be an energy intensive process and a major contributor of lifecycle greenhouse gas emissions associated with fossil fuel use. Advances in technologies and practices associated with developing coal, natural gas, and oil resources offer the ability to improve efficiencies and reduce upstream greenhouse gas emissions associated with producing and delivering fossil energy to end users. DOE anticipates qualifying projects may include, but are not limited to: novel oil and gas drilling, stimulation, and completion technologies that avoid, reduce, or sequester greenhouse gases; use of associated gas production to reduce flaring; coal-bed methane recovery to reduce methane emissions into the atmosphere associated with coal mining; underground coal gasification; and methane emissions capture from energy production, transmission, or distribution.

Technology Area 2: Carbon Capture – Fossil-based energy systems are point-sources that generate CO2 in their processes and typically emit large volumes of CO2. Currently, these facilities account for over half of the United States’ annual greenhouse gas emissions. DOE anticipates qualifying projects may include, but are not limited to: CO2 capture from synthesis gases in fuel reforming or gasification processes; CO2 capture from flue gases in traditional coal or natural gas electricity generation; and CO2 capture from effluent streams of industrial processing facilities.

Technology Area 3: Low-Carbon Power Systems – Fossil-based electricity generation traditionally involves fuel combustion with air as a heat and power source, producing a flue gas with low concentrations of CO2, and, therefore, making the adoption of carbon capture more difficult. Novel processes have been proposed that generate fossil-based electricity but do not require traditional carbon capture technology. Qualifying projects may include, but are not limited to: coal or natural gas oxycombustion; chemical looping processes; hydrogen turbines; and synthesis gas, natural gas, or hydrogen based fuel cells. Note that DOE’s FutureGen 2.0 project in Illinois, which is in an advanced stage of development, will use oxycombustion technology to fire coal, with CO2 capture and sequestration built into the project.

Technology Area 4: Efficiency Improvements – Industrial fossil-based systems typically utilize only a fraction of the energy available from their feedstocks, and often reject a large amount of low quality and waste heat from their processes. Qualifying projects may include, but are not limited to: combined heat and power; waste heat recovery; novel oil refining technologies high-efficiency distributed fossil power systems; and high temperature materials for fossil-based systems.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.