Biden's Green Energy Bank Accelerates $394 Billion Investment in Clean Technology

An arm of the US Energy Department is working to leverage up to $394 billion to speed the country’s fight against climate change.

The Loan Programs Office of the US Department of Energy has been revived under President Joe Biden, with more funding following the passage of the country's landmark climate law. However, the window of opportunity for the office to support innovative low-carbon technologies is limited, with only two years remaining in Biden's term and no guarantee that future presidents will prioritize the issue.

The office announced only four conditional loans or loan guarantees in 2021 and 2022. However, officials said on Friday that they were offering a fifth one - a conditional $700 million loan for a lithium-mining project in Nevada that is expected to support electric vehicles. Jigar Shah, the head of the office, said in an interview last week that there are more than 100 applications right now, so more deals may be coming.

Energy Secretary Jennifer Granholm starts every meeting by reminding everyone how many days are left in office. Shah said it's a way to keep everyone focused on the task at hand.

The little-known office has had a great impact on shaping the power and transportation sectors over the past years. A primary task of the office is to scale viable clean technologies, not incubating new ones.

The US Department of Energy's Loan Programs Office has a long history of supporting innovative energy projects. In 2010, the office provided a key $465 million loan to Tesla Inc., a then-struggling maker of a $109,000 sports car. The office also financed the first large US solar farms more than a decade ago. However, the office may still be best known for one of its few failures: a $535 million loan guarantee to Solyndra, a solar manufacturer that soon went bankrupt.

The US Office of Energy Efficiency and Renewable Energy (EERE) is one of the country's leading organizations working to commercialize clean energy technologies. These technologies, such as advanced nuclear power and carbon capture, are essential for meeting the US goal of reducing emissions by at least 50% by 2030. With the worsening climate crisis, there is pressure to move quickly, but the EERE also faces scrutiny from the Republican-led House of Representatives.

Jonathan Silver, who oversaw the program's most active period during former President Barack Obama's first term, said the office has done a really good job of building the pipeline. He added that while it's important to get strong projects done, it's less important to worry about the exact dollar amount that can be achieved.

The US Loan Programs Office has deployed billions of dollars in cleantech funding. This funding has been used to support a variety of clean energy projects, including solar, wind, and geothermal. The office has also provided funding for energy efficiency and clean transportation initiatives.

Shah, a solar pioneer and former cleantech investor, took over the office in 2021. At the time, it was effectively dormant following Trump administration attempts to terminate it.

Shah said that one of the early challenges was getting companies to realize that they could work with the SBA. He used social media and conferences to generate interest, and also had to increase hiring. Last year showed that there was not only interest in the SBA's funding power, but that companies were willing to put in the effort to get loans or loan guarantees.

Of the office's 125 applications, approximately one-third are capable of completing deals efficiently, according to Mr. Smith. Another third require what he described as "intensive mentorship," while the remaining applicants are "a little early" in the process of obtaining a loan or guarantee.

The Loan Programs Office had $44 billion in available funding before the climate law was passed, and now has a total loan authority of $394 billion. There are deadlines of September 2026 or 2028 depending on the type of loan sought for financing linked to the new law.

"2023 is about execution," Shah said. "We need to focus on executing our plans and achieving our goals."