DOE to Guarantee $2 Billion in Loans for Clean Energy Projects

August 7, 2006

DOE announced new guidelines on August 7th for $2 billion in loan guarantees that will support clean energy projects. The loan guarantees will help reduce the financial risks of advanced energy projects that avoid, reduce, or sequester the emissions of air pollutants and greenhouse gases. In announcing the loan guarantees, Energy Secretary Bodman specifically referred to cellulosic ethanol, solar, and wind energy projects. The first round of loan guarantee applications will be governed by the upcoming solicitation, which will inform DOE's development of permanent regulations. Within the next few weeks, DOE will propose draft regulations to govern future rounds of loan guarantees. See the DOE press release.

The announcement was part of a series of events around the country to mark the first anniversary of the Energy Policy Act of 2005 (EPAct), which was signed by President Bush on August 8th, 2005. EPAct is the first comprehensive energy legislation that has been signed into law in over a decade. Since EPAct was signed, construction has begun on 27 new ethanol plants and more than 400 E85 pumps have been installed, offering a renewable fuel containing 85 percent ethanol and just 15 percent petroleum to consumers and fleets with flexible-fuel vehicles. In addition, the use of wind and solar energy has increased, and 15 appliance efficiency standards have been implemented. The bill also offers tax credits to both businesses and consumers, and includes credits for energy efficiency improvements homes and buildings and for the purchase of fuel-efficient vehicles. See the DOE press release, DOE's "What the Energy Bill Means to You," and a related press release from the Renewable Fuels Association.