Friday, October 07, 2011
Solyndra and Fukushima Daiichi
Neither the $535 million default on the loan guarantee by Solyndra nor the Act of God that led to the Fukushima disaster should end support for renewables subsidies or nuclear power subsidies. Although both were horrible disasters, they should not lead to abandonment because the technologies are incredibly effective in their respective areas. Half a billion dollars being lost on one company is hard to swallow, but venture capitalism is a very risky business. Some hit. Some do not. Nuclear power is very effectvie, but Fukashima has taught us that cooling power absolutely cannot be lost at those facilities.
There are significant loan guarantees for renewable energy and nuclear power. To date, the U.S. Department of Energy Loan Programs Office has approved $35.9 billion in loan guarantees with a projection that 64,776 jobs will be created. The Loan Programs Office is comprised of two programs established within the Department of Energy in 2005 and 2007, with certain expansions provided by the Recovery Act of 2009. These two programs are the Loan Guarantee Program (with Sections 1703 and 1705) and the Advanced Technologies Vehicle Program (Section 1703, Section 1705, and Advanced Technology Vehicles Manufacturing (ATVM)).
Loan guarantees for nuclear power projects come from $18.5 billion in money authorized by the Energy Policy Act of 2005. Presdient Obama proposed increasing that mount by $36 billion for a total loan guarantee program of $54.5 billion in his FY 2011 Budget.
Renewable energy projects are supported through the U.S. Department of Energy Loan Programs Office. Their mission is to finance the growth of innovative clean energy technologies:
• Wind and Hydropower
• Advanced Fossil Energy Coal
• Carbon Sequestration practices and technologies
• Electricity Delivery and Energy Reliability
• Alternative Fuel Vehicles
• Industry Energy Efficiency Projects
• Pollution Control Equipment
The mission of LPO is to accelerate the domestic commercial deployment of innovative and advanced clean energy technologies at a scale sufficient to contribute meaningfully to the achievement of our national clean energy objectives—including job creation; reducing dependency on foreign oil; improving our environmental legacy; and enhancing American competitiveness in the global economy of the 21st century.
LPO executes this mission by guaranteeing loans to eligible clean energy projects (i.e., agreeing to repay the borrower’s debt obligation in the event of a default), and by providing direct loans to eligible manufacturers of advanced technology vehicles and components.
Specifically, LPO endeavors to:
• Encourage commercial- and utility-scale development and adoption of new or significantly improved energy technologies;
• Fund innovative technologies which reduce greenhouse gas emissions;
• Create jobs by financing the growth of commercial clean energy technologies;
• Provide direct loans to eligible automobile manufacturers and component suppliers for projects that re-equip, expand, and establish manufacturing facilities in the U.S. to produce advanced technology vehicles and components for such vehicles; and
• Protect U.S. taxpayers by ensuring the loans and loan guarantees we provide have a reasonable prospect of repayment.
The Department of Energy has offered conditional commitments for a total of $8.33 billion in loan guarantees for the construction and operation of two new nuclear reactors at a plant in Burke, Georgia. The project is scheduled to be the first U.S. nuclear power plant to break ground in nearly three decades. The two new 1,100 megawatt Westinghouse AP1000 nuclear reactors at the Alvin W. Vogtle Electric Generating Plant will supplement the two existing reactor units at the facility. According to industry projections, the project will create approximately 3,500 onsite construction jobs. Once the nuclear reactors become operational, the project will create 800 permanent jobs. Project sponsors include Georgia Power Company (GPC), Oglethorpe Power Corporation (OPC), the Municipal Electric Authority of Georgia (MEAG) and the City of Dalton, Georgia (Dalton).
The Department of Energy offered AREVA Enrichment Services, LLC a conditional commitment for a $2 billion loan guarantee to support the Eagle Rock Enrichment Facility in Idaho Falls, Idaho. The project will supply uranium enrichment services. The project will create 1,300 jobs.
The Energy Policy Act of 2005 authorized DOE to issue loan guarantees for projects that avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases and employ new or significantly-improved technologies as compared to technologies in service in the United States at the time the guarantee is issued. These are the first conditional commitments for loan guarantees to be offered by DOE for a nuclear power facility since enactment of the 2005 law. The Department’s Loan Programs Office administers the loan guarantee program. (DOE, LPO, The White House)Solyndra, the first company to win an energy loan guarantee from the Obama administration, closed up shop Aug. 31 and left 1,100 employees out of work. The Fukushima Daiichi facility is now covered with radioactive contamination and can never be utilized again.