Potential boost for new tech deployment

Thursday, 7 May 2009

A new body could be set up within the US Department of Energy (DoE) specifically to ease the deployment of clean energy technologies.

 

Essentially, the new office would take control of the loan guarantee program with a view to speeding the issuance of guarantees and establishing other targeted schemes to get new low-carbon energy sources up and running.

 

The Clean Energy Deployment Administration (CEDA) was suggested by the Senate Committee on Energy & Natural Resources via the 21st Century Energy Technology Deployment Act, which is an amendment to the Energy Policy Act of 2005. The bill text was approved by the committee yesterday and sent to the Senate.

 

Noting that, "Large-scale deployment of innovative technologies is essential to advancing a new, sustainable, and affordable energy and industrial regime," the committee said that a major hold-up for certain technlogies has been securing finance, "due to the risks lenders perceive in new and unfamiliar technologies."

 

Nuclear power and large hydro are the main generators of low-carbon energy in the USA, but with large hydro unable to expand nuclear power along with smaller renewables like wind and solar must develop rapidly to meet energy and environmental demands.

 

The DoE is currently dealing with a whopping $90 billion in loan guarantees, after a $30.5 billion program was pumped up by the stimulus package earlier this year. Campaigners forced the exclusion of nuclear power projects from the expansion, but the first round included $18.5 billion in guarantees for nuclear power plants and up to $2 billion for front-end nuclear fuel projects.

 

Fourteen new nuclear power projects have been the subject of first-part loan guarantee applications, totalling around $188 billion - more than ten times what the DoE is offering. As yet, no loan guarantees have been issued to nuclear power projects, and utilities remain unsure of financing for their nuclear plans.

 

Starting with the loan guarantee program, CEDA would go on to develop "credit enhancements as well as secondary market support to develop products such as clean energy-backed bonds that would allow less expensive lending in the private sector."

 

If approved, CEDA could become self-financing, said the committee, directly providing loans for certain more risky investments and raising money less risky ventures in a portfolio approach. The agency would be "encouraged to back riskier technologies with a higher potential to address our climate and energy security needs." However, much remains to be done before CEDA could become a reality, even if approved by legislators. The body would need a specific Clean Development Fund and a permanent Technology Advisory Council as well as a presidentially appointed Secretary and Administrator.