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Department of Energy (DOE) Finalizes $4 Billion Clean Energy Technology Loan Guarantee Program

On July 3, 2014, the U.S. Department of Energy (“DOE”) issued a final solicitation for the Renewable Energy and Energy Efficient Projects Loan Guarantee Program.  As we previously reported with respect to the draft solicitation issued on April 16, 2014, the Program is expected to make up to $4 billion in loan guarantees available for projects located in the United States that use innovative renewable or energy-efficient technologies that avoid, reduce, or sequester greenhouse gases.  The Program offers yet another opportunity to obtain financial assistance from DOE for innovative clean energy technology projects, as part of the Administration’s “all-of-the-above” energy strategy.

The final solicitation continues to identify five key areas of interest to DOE, including advanced grid integration and storage, drop-in biofuels, waste-to-energy, enhancement of existing facilities, and efficiency improvements.  Although a number of comments on the draft solicitation took issue with DOE’s intent to support waste-to-energy technology, as well as drop-in biofuels, which are chemically indistinguishable from petroleum-derived fuels and may be used in existing infrastructure, DOE highlighted in response that the statute authorizing the Program—the Energy Policy Act of 2005—defines both combustion and non-combustion technologies as eligible to receive loan guarantees.

DOE reiterated that projects will be evaluated on a case-by-case basis.  It further explained that the technologies identified in the final solicitation are for illustration purposes only; projects using an identified technology will not automatically be eligible to participate in the Program.  DOE will conduct a life-cycle assessment to determine the extent to which a proposed project avoids, reduces, or sequesters greenhouse gases.  DOE intends to issue guidance on the nature of the life-cycle assessment to ensure transparency in the evaluation process.

Although any project that meets the final solicitation’s requirements is eligible participate in the Program, DOE will look favorably on projects that have a catalytic effect on the commercial development of innovative technologies.  DOE will also look favorably on projects that make use of other sources of financing.

The final solicitation provides for five rounds of evaluation.  In each round of evaluation, DOE will subject an application to a complete review only after making a preliminary determination that a proposed project meets the Program’s requirements.  Initial applications for the first round of evaluations are due on October 1, 2014, with complete applications due on January 14, 2015.  Initial applications for the fifth round of evaluations are due on December 2, 2015, with complete applications due on March 2, 2016.  Applications must be submitted via a web-based portal, which has yet to be established.

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About this Author

Scott Freling, Government Contracts Lawyer,  Covington Law Firm
Partner

Scott Freling divides his practice between working with civilian and defense contractors on traditional government contracts matters and representing buyers and sellers, including a number of private equity firms, in complex M&A deals involving a government contractor.

Mr. Freling represents contractors at all stages of the procurement process and in their dealings with federal, state, and local government customers. In addition, he counsels clients on compliance matters and risk mitigation strategies, including obtaining SAFETY Act liability protection for...

202-662-5244
Tyler Evans, litigation lawyer, Covington
Associate

Tyler Evans has experience working closely with clients to resolve issues arising from their participation in government contracting.

Mr. Evans’s practice covers multiple subject-matter areas, including contract negotiations, flow-down requirements, schedule contracts, small business issues, sourcing restrictions, compliance, cost disputes, and mergers and acquisitions. He has advised companies working in a broad range of industries, including life sciences, defense, information technology, energy, and construction.

202.662.5836