LPO Year in Review 2023
The Department of Energy’s (DOE) Loan Programs Office (LPO)?is the premier public financing partner that accelerates high-impact energy?and manufacturing investments to advance America’s economic future. While our work is often done through the evaluation of a single loan or individual project, our goal is to unlock follow-on investment by helping new technologies and financing structures prove their bankability. As we launch into the New Year, I wanted to look back and share some of our progress since publishing our?2022 Year in Review .
We?continue to implement the?Inflation Reduction Act ?(IRA) and the Infrastructure Investment and Jobs Act (IIJA) and to carry out our mission to unlock and catalyze private capital, onshore and expand domestic manufacturing and supply chains, and ensure the energy transformation benefits American workers and communities.
Across the country, LPO-financed projects have continued reducing emissions, creating quality?jobs, increasing equity , and strengthening America’s energy security and supply chains. In 2023, we announced nine new?conditional commitments ?across our?programs , totaling more than $17 billion in potential financing and supporting up to 27,000 construction and operations jobs.
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PORTFOLIO PROGRESS
This summer, LPO-financed nuclear power plant?Vogtle Unit 3 ?started commercial operations, providing zero carbon 24 hours a day/7 days a week electricity to 500,000 homes in Georgia. Vogtle Unit 4, which LPO also financed, is expected to come online in early 2024. More than 10,000 people in rural Georgia were trained for union jobs to support these first-of-a-kind deployments. As our country experiences load growth for the first time in more than 20 years , we are going to need nuclear power to play an important role . There were challenges along the way, and I’m proud of the work our team and partners are putting in to see these projects to commercial operation and beyond. We’re learning important lessons that will make the process smoother next time, and we’re proving that America can still build big things.?
This fall, LPO extended a partial loan guarantee for?Sunnova’s project Hestia ?to provide?solar and storage access to Americans that have experienced a high energy burden, outage duration and events, and climate hazards. Hestia will leverage 30 years of DOE data showing that households of all incomes and credit scores pay back loans for clean energy systems that save money. The project will create 3,400 quality jobs and provide affordable, reliable clean energy for 75,000-115,000 households, including in Puerto Rico where power outages are common. I had the opportunity to join Secretary Granholm and Sunnova in Puerto Rico for a site visit to a solar installation training facility, and to see the impact this financing will have. I’m grateful to all the people doing the hard work on the ground to make affordable, reliable, clean energy available in their communities; and I’m proud that LPO enables and supports this work. DOE views this project as an opportunity to raise the standards of the solar industry as a whole. LPO's engagement in Project Hestia resulted in the project becoming stronger, including raising the project’s commitment to its customers and expanding clean energy access.
This year, LPO has also made?conditional commitments ?that?underscore the Biden-Harris Administration’s commitment to dramatically reduce emissions, advance national energy security priorities, support?environmental justice , protect public health, create good-paying jobs, and save consumers money.?A conditional commitment is an agreement from LPO to provide a loan in the future if and when a potential borrower meets the requirements, or “conditions precedent,” specified. This year, LPO made conditional commitments to projects involving?energy storage ,?advanced vehicles and components ,?critical materials , and more.?
While LPO will only disburse funds to these projects if and when certain conditions are met, aspects of the projects are underway; and our team and I were thrilled to visit several project sites and hear from project partners, including community leaders, workforce development and labor organizations, local and Tribal governments, and other stakeholders. Here are a few highlights:
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PATHWAYS TO COMMERCIAL LIFTOFF
Achieving the Biden Administration’s climate goals will require $10 trillion of investment through 2050. The LPO and its loans and loan guarantees will play a critical role in accelerating younger technologies, but most of the investment—to the tune of $100B in each of 20+ critical technology areas—will come from the private sector. Our job is to unlock the private sector investment through strategic financing. We’re promoting better coordination with the private sector so that we can figure out how each of these 20+ technologies can cross the Bridge to Bankability and achieve full commercial acceptance.?
The Office of Technology Transitions led an effort with LPO, the Office of Clean Energy Demonstrations, and the Office of Policy to publish the first six Pathways to Commercial Liftoff reports. These reports leverage insights from our private sector applicants and the DOE enterprise to articulate what it will take for various technologies to achieve “commercial liftoff” or become self-sustaining. This year’s reports covered:?Advanced Nuclear ,?Carbon Management ,?Clean Hydrogen ,?Long Duration Energy Storage ,?Industrial Decarbonization ,?and?Virtual Power Plants .?
As part of the broader Liftoff effort, LPO co-hosted the?Deploy23 conference , which brought together over 600 decision makers, capital allocators, community leaders, and others across the clean energy supply chain to discuss barriers and opportunities to deploying clean energy technologies at scale. We’re excited about the ideas that emerged from the dialogues at the event and look forward to continuing public-private partnership.
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OFFICE AND PROGRAM UPDATES
We’ve done essential work interpreting our expanded authorities and growing our team to implement them. In May 2023, LPO released updated program guidance for the?Title 17 Clean Energy Financing Program .
The?new guidance reflects changes from the?Bipartisan Infrastructure Law ?(BIL) and?IRA ?that expanded the program’s scope and loan authority, including establishing and funding the State Energy Financing Institution (SEFI) and?Energy Infrastructure Reinvestment ?project categories in the Title 17 Clean Energy Financing Program.?We introduced a SEFI?toolkit , which explains how LPO can supplement SEFI support for some projects. Our team has identified at least 13 SEFIs across 11 states and is working with many more potentially qualifying institutions so we can team up to finance essential clean energy projects going forward.?In December we also hosted a webinar with three different SEFIs, titled?How State Energy Financing Institutions Are Designing Programs in Partnership with LPO , in which we shared illustrative models for scaling clean energy projects.
We’re continuing to see significant and diverse interest in our financing programs. We have?applications ?for projects in every clean energy and advanced transportation technology sector that we track, with proposed project sites across all regions of the United States. As of the end of 2023, there are 202 applications in the application pipeline requesting a cumulative of nearly $214.8 billion in project financing. We’re excited to continue working with applicants on these important projects.?
Over the last year, we created a?Community Jobs and Justice ?team to ensure workers and communities benefit from projects we finance. The team is incorporating the DOE’s?Community Benefits Plan (CBP) ?framework into LPO programs, including in the updated Title 17 program guidance. The team has led numerous trainings to ensure that Justice40, quality jobs, and related priorities are embedded into LPO’s activities. The team has also partnered with other DOE offices and programs in other federal agencies. Externally, the team has conducted special events at applicant and borrower sites. And in December, LPO launched the?Community Jobs & Justice Newsletter ?to provide potential applicants and other stakeholders resources and news that might assist in developing their CBPs.?
Additionally, LPO has continued building its team of experts to bring in applications, evaluate technologies and business plans, and monitor projects. We continue to streamline the?application process ?to accelerate timelines and, as always, apply world-class?risk management ?practices.
We’re looking forward to a busy 2024 with more deals and new partnerships to advance America’s energy and economic future.
Happy New Year!?
Journalist, writing a book on threats to humanity
6 个月Jigar, this was really interesting -- thank you. I'm writing a related report for the Institute for Progress and would love to speak to you sometime, please. Is there a good way to get in touch?
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I see a number of ways to use open space for renewable energy, but it isn't. It seems there are two camps. Put it on a house or go huge. Most buildings the government owns have roofs with open spaces. I completely understand the solar wouldn't replace the electric usage, but there is nothing that says it has to. Why not put solar panels over bike paths going across bridges? You keep the sun off of the bikers and generate electricity. Farmers can use solar to cover their fields for crops that don't need direct sunlight. This lowers evaporation reducing water usage. Same with causeways and canals, put solar over them to reduce the evaporation of water and produce energy. You could have programs for bamboo farmers as you can harvest bamboo 4 times a year instead of trees which are what once every 30+ years. Moss is another carbon remover. It doesn't like direct sunlight but with solar panels on a roof and moss gardens under the panels you reduce the amount of sun that hits the building, thus reducing the cooling costs, and insulate some with the moss while removing carbon from the air. I have solar on my house. Electricity is almost free. I can't get batteries as installers don't like installing them after you have solar.
Founder and CEO at Fleur Consulting LLC
10 个月Great work!