DOE's Moniz credits loan guarantees for solar power expansion

ernest moniz nuclear

U.S. Department of Energy Secretary Ernest Moniz, during a March 1 "fireside chat" at DOE’s Advanced Research Projects Agency-Energy Energy Innovation Summit held in Maryland, discussed such matters as government’s role on research and development, as well as the Mission Innovation initiative.

"ARPA-E is the centerpiece of what we do, but there are other programs as well, from our science program to our applied energy programs, to our loan program, that all act at different stages of this chain," he said.

He continued, that the link between "the government work and the private sector is critical, but the private sector typically is not going to be investing in the research …, so that is certainly one unique role, I think, where the government pretty much provides most of the support."

Of the loan program, he said, "[I]t’s amazing how little you hear" about Solyndra anymore, and noted that the program’s "portfolio is extraordinarily successful."

As PennWell’s GenerationHub reported last year, the Office of Inspector General for DOE said in an Aug. 24, 2015, special report that Solyndra provided DOE with "false and misleading information" during the application process for a $535 million loan guarantee.

In September 2009, DOE approved the loan guarantee to Solyndra for the construction of a solar photovoltaic manufacturing facility in Fremont, Calif., referred to as Fab 2. In the ensuing two years, the department disbursed more than $500 million to Solyndra. In September 2011, the company initiated the layoff of 1,100 employees, ceased operations and manufacturing, and filed for bankruptcy protection.

Continuing his remarks on the loan program, Moniz said: "When the program really got into gear in 2009, we had no utility-scale photovoltaics in the country — I’m saying like 100 MW and greater. The program provided debt financing — and of course 2009/2010 was a particularly difficult time for debt financing — for five projects, all successful and now there are, … 20 or 21 additional projects of that scale, purely with private financing."

ARPA-E has "proved its worth," he said, pointing to ARPA-E’s Feb. 29 statement, which noted that building on President Barack Obama’s recent announcement that 45 projects from ARPA-E have secured more than $1.25 billion in private sector follow-on funding, ARPA-E announced at the summit the full list of projects that have received private sector investment.

ARPA-E said it also announced that 36 projects have formed new companies, 60 projects have partnered with other government agencies for further development and an increasing number of technologies have already been incorporated into products that are being sold in the market.

To date, ARPA-E said that it has invested about $1.3 billion across more than 475 projects through 30 focused programs and three open funding solicitations. The statement further noted that while many ARPA-E projects have demonstrated early indicators of technical and commercial success, the urgency to drive down costs, develop new technologies and encourage public and private sector engagement to deploy clean energy solutions requires that the United States accelerate the pace for energy R&D.

The Mission Innovation initiative will help accomplish that need, ARPA-E said, noting that Obama and 19 other world leaders last December launched that initiative, which is a commitment to seek a doubling of their respective clean energy research and development investments over five years.

ARPA-E said that Obama fulfilled that commitment in his FY17 budget proposal, including a 20 percent increase in new funding for ARPA-E and an additional proposal to create an ARPA-E Trust, which will support development of larger-scale "investment-ready" outcomes, starting with $150 million in mandatory funding starting in FY17. Total ARPA-E funding would grow to more than $1 billion in FY21, the statement added.

Moniz said of that initiative that "different countries will clearly have different portfolios."

He continued: "[O]ne of the benefits for the world will be the build up of innovation systems and, hopefully, entrepreneurial activity in many countries. I think that’s clearly to the benefit of all."

Noting that there are different scales in the 20 countries, he said that the United States is "the locomotive pulling the train and, frankly, with all these countries investing in innovation …, we better stay out in front of the train."

The U.S. and global markets in clean energy technology have been growing rapidly, and with multiple countries noting at the 2015 Paris Climate Conference – COP21 that they are pursuing goals "in decarbonization, almost surely those markets are going to just now start taking off even more strongly," Moniz said.

In response to a question on whether the Mission Innovation goals could be affected under different leadership in light of the upcoming presidential election, Moniz said that the innovation agenda has substantial bipartisan support.

"Now, when it comes to regulatory approaches to climate, obviously, then there is a bit more disagreement at the moment," he said, adding: "[F]rankly, we have been unable to get a statutory approach to climate, let’s say, an economy-wide approach to climate. A lot of the activities, in addition to technology development, have been in the rules and regulation arena." DOE, for example, in 2015 "picked up the pace" and issued 13 final efficiency rules, he said, adding that such efforts will continue this year.

At some point, Moniz said, there will be a need for "an administration and Congress to work together and to have an economy-wide approach to addressing climate."

Among other things, Moniz, responding to a question on what the market looks like in the long term in terms of energy innovation, said, "[W]e clearly are playing the long game here when you’re talking about R&D and technology."

In the United States’ power sector, low natural gas prices have arguably had a larger impact than the low oil prices as there has "been an enormous switch from coal to gas, largely driven by the low gas price," he said.

Also, a number of nuclear power plants have closed down, largely in areas where the competition is tough given the low gas prices, he said. Nevertheless, renewable resources in the electricity arena "keep growing very, very fast" due to many states having renewable portfolio standards in place, as well as reduced costs for certain technologies, Moniz said.

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