Energy Department Loan Programs Office issues solicitation for $8bn in advanced fossil energy projects

DOE

The U.S. Department of Energy published a solicitation for advanced fossil fuel energy projects Thursday, making up to $8 billion in loan guarantee authority available for fossil energy projects that avoid, reduce or sequester greenhouse gases.

The loans will be issued through the DOE’s Loan Programs Office, which guarantees loans for promising new technology that has progressed beyond the research and development stage but has not been tested on a commercial scale. The department has previously guaranteed loans for facilities such as the Solana Generating Station, a concentrating solar power project in Arizona with energy storage.

“These loan guarantees will support a new wave of innovative projects ready for commercial-scale deployment that demonstrate how fossil energy – which currently accounts for 80 percent of U.S. energy use – will continue to play an important role in our low-carbon, clean energy future,” Loan Programs Office Executive Director Peter Davidson stated on the office’s website.

Peterson discussed the solicitation at the POWER-GEN International Financial Forum in November, saying the office is hoping to fund transformative projects and applications must meet certain requirements to be considered for a loan. The projects must use fossil fuel, be innovative, reduce greenhouse gas emissions, be located in the U.S. and provide a reasonable expectation of repayment.

The solicitation covers four areas: carbon capture, including CO2 capture from traditional coal or natural gas electricity generation; advanced resource development, including coal-bed methane recovery, underground coal gasification and use of waste gases; low carbon power systems, including coal or natural gas oxycombustion, chemical looping or fuel cells using synthesis gas, natural gas or hydrogen; and efficiency improvements, including combined heat and power and waste recovery, high-efficiency distributed fossil power systems and high temperature materials including superalloys and ceramic refractories.

The U.S. Environmental Protection Agency recently issued the New Source Performance Standards under the Clean Air Act, which limit the emissions of new facilities. The standard would require new coal-fired plants use technology such as carbon capture and storage to not exceed the maximum allowed emissions.

The applications will be accepted in multiple rounds, with the first deadline set for Feb. 28, 2014. A copy of the solicitation is available at lpo.energy.gov/resource-library/solicitations/advanced-fossil-energy-projects-solicitation/.

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