PRESS ANNOUNCEMENT: 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, we 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 creating quality jobs, reducing emissions, 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.
PORTFOLIO PROGRESS
This summer, LPO-financed nuclear power plant Vogtle Unit 3 started commercial operations, providing zero carbon 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:
- LPO Deputy Director Bob Marcum joined Secretary Granholm in visiting Redwood Materials in Nevada. Redwood Materials is a pioneer in battery recycling and manufacturing; and in February, LPO announced a conditional commitment for a $2 billion loan to finance a new facility outside of Reno. After a ceremony onsite celebrating the conditional commitment, Redwood Materials’ founder and CEO JB Straubel gave a plant tour to the Secretary and Deputy Director Marcum. If finalized, the project would create up to 5,000 jobs and manufacture battery materials to support an estimated one million electric vehicles (EVs) annually.
- In August, LPO announced a conditional commitment to Eos Energy Enterprises, Inc. (Eos) for an up to $398.6 million loan guarantee for the construction of up to four state-of-the-art production lines to produce a next-generation utility- and industrial-scale zinc-bromine battery energy storage systems in Turtle Creek, Pennsylvania. As part of their Community Benefits Planning efforts, Eos held six listening sessions in the communities directly surrounding their project in Turtle Creek, Pennsylvania, earlier this fall. Eos with their partner, the Mon Metro Chamber of Commerce, is focused on identifying issues faced by these communities, mapping out how the project can benefit the communities, and engaging other partners including government and philanthropy. Eos is excited about the fact that they, as an employer, are providing opportunities for the community to connect with the federal and state government.
- I participated in a community roundtable at Blue Oval City, the BlueOval SK LLC (BOSK) mega campus in Stanton, Tennessee, with Deputy Secretary David Turk. In June, LPO made a conditional commitment to BOSK for up to $9.2 billion to finance construction of three manufacturing plants to produce batteries for Ford Motor Company’s future Ford and Lincoln EVs in Tennessee and Kentucky. If finalized the project would create up to 12,500 jobs in Kentucky and Tennessee and displace more than 455 million gallons of gasoline annually. This project is being built with union labor under a Project Labor Agreement with a focus on recruiting local residents. We met a tradeswomen who was recruited from the community for this project and shared the impact of working at BOSK and being a Laborer with the Laborers’ International Union of North America. We also met the superintendent of Haywood County Schools, who presented on HTL University – reimagining the education-to-workforce pipeline in Haywood, Tipton, and Lauderdale Counties to provide a pipeline of workers for BOSK.
- I participated in a community roundtable with CelLink in Georgetown, Texas, where I saw the incredible partnerships being built with the local community college to train the growing clean energy workforce. LPO announced a conditional commitment for $362 million in May, and if the deal is finalized, it will help expand the company’s manufacturing of wiring harnesses for electric vehicles. The project would create about 1,400 jobs and displace an estimated 7.7 million gallons of gasoline per year.
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.
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 Reinvestmentproject 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 November 30, 2023, there are 189 applications in the application pipeline requesting a cumulative of nearly $175 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.
