Title XVII of EPACT2005 [20] authorized DOE to issue loan guarantees to new or improved technology projects that avoid, reduce, or sequester GHGs. In 2006, DOE issued its first solicitation for $4 billion in loan guarantees for non-nuclear technologies. The issue of the size of the program was addressed subsequently in the Consolidated Appropriation Act of 2008 (the “FY08 Appropriations Act”) passed in December 2008, which limited future solicitations to $38.5 billion and stated that authority to make the guarantees would end on September 30, 2009. The legislation also allocated the $38.5 billion cap as follows: $18.5 billion for nuclear plants; $6 billion for CCS technologies; $2 billion for advanced coal gasification units; $2 billion for “advanced nuclear facilities for the ‘front end’ of the nuclear fuel cycle”; and $10 billion for renewable, conservation, distributed energy, and transmission/ distribution technologies. DOE also was required to submit all future solicitations to both the House and Senate Appropriations Committees for approval [21]. 

DOE received all necessary approvals from Congress in the summer of 2008 and on June 30, 2008, issued two additional solicitations—one for nuclear plants and another for renewable, conservation, distributed energy, and transmission/distribution technologies [22, 23]. Another solicitation, for advanced fossil fuel technologies, was issued on September 22, 2008 [24]. 

Even before it issued its 2008 solicitations, DOE had requested that Congress extend its authority to provide loan guarantees, originally set to expire at the end of fiscal year 2009, for an additional 2 years. As of November 2008, Congress had not acted on the request. Also, DOE’s budget request for fiscal year 2009 indicated that only $2.2 billion in loan guarantees from the 2006 solicitation would be issued during that fiscal year. It is not clear what will happen to the rest of the program if DOE’s loan guarantee authority expires as originally scheduled. AEO2009 includes only the effects of the 2006 solicitation, which is assumed to result in the construction of 1.2 gigawatts of capacity at advanced coal-fired power plants and 250 megawatts at solar power plants [25]. 

Provisions of additional loan guarantees pursuant to the solicitations issued in 2008 could have a further effect on the projections, depending on whether the guarantees support projects that were already included in the AEO2009 projections. For example, in October 2008 DOE received applications from 17 private and public power companies for 21 nuclear units (14 plants with a total of 28.8 gigawatts of capacity) in response to the nuclear solicitation [26]. In total, the utilities requested $122 billion in guarantees against total projected construction and financing costs of about $188 billion, suggesting that the $18.5 billion in the FY08 Appropriations Act could cover about 4.4 gigawatts of new nuclear capacity. AEO2009 projects additions of 13 gigawatts of new nuclear capacity between 2000 and 2030.

Notes and Sources

Contact: Jim Hewlett
Phone: 202-586-9536
E-mail: jim.hewlett@eia.doe.gov