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Seven years ago today, President Obama signed the American Recovery and Reinvestment Act (ARRA, or the Recovery Act) into law and created the Section 1705 Loan Guarantee Program. The Recovery Act was designed to spur economic growth while creating new jobs and saving existing ones, similar to New Deal programs like the Works Progress Administration (WPA) that invested in large-scale projects such as the Hoover Dam -- the world’s largest dam at the time of its opening.
Between 2009 and 2011, the Energy Department's Loan Programs Office (LPO) guaranteed $16.1 billion in loans to 25 Recovery Act projects. These projects supported more than 10,000 jobs and have the capacity to power more than 1 million average American homes annually.
The following five examples highlight how LPO financing helped create jobs and build projects that are providing American homes and businesses with clean energy.
In 2009, there wasn't a single PV solar facility larger than 100 megawatts (MW) operating in the United States. Despite growing demand for this clean, renewable energy source, developers faced challenges securing the financing necessary to build these large projects.
To overcome that hurdle, LPO stepped in with more than $4.6 billion in loan guarantees to support construction of the first five utility-scale PV solar facilities in the nation larger than 100 MW. The loan guarantees to Agua Caliente, Antelope Valley Solar Ranch, California Valley Solar Ranch, Desert Sunlight and Mesquite helped transform U.S. energy production and paved the way for the fastest growing sector of the solar industry. Since LPO stopped issuing Section 1705 loan guarantees on September 30, 2011, another 28 PV solar projects larger than 100 MW have been financed in the United States without LPO loan guarantees.
Additionally, LPO provided a loan guarantee to Alamosa, the largest high-concentration photovoltaic solar generation project in the world.
2. Wind Energy
By working with the wind industry, the Energy Department has helped drive down the cost of land-based wind power in the United States by about 90 percent since the early 1980s. Through a partial guarantee of a $1.3 billion loan to Shepherds Flat, one of the world’s largest wind farms, LPO helped to show that large-scale land-based wind energy can be commercially viable in the United States by working with a group of 26 institutional investors and commercial banks from around the world.
Between 2010 and 2011, LPO financed five concentrating solar power (CSP) projects. Ivanpah was the first commercial-scale project in the United States to use “power tower” technology and was the largest solar project in the world when it launched commercial operations. By integrating thermal energy storage, two of these projects -- Crescent Dunes and Solana -- brought the first utility-scale “nighttime solar” to the United States. Genesis and Mojave are among the largest CSP projects in the world.
These pioneering projects have the potential to become valuable sources of clean energy, and they are helping to better integrate renewable energy into the electric grid. As first-of-a-kind projects, the lessons learned from these projects will provide valuable insight for future deployments in how to finance, construct and operate the technology at commercial scale.
Geothermal power can play an important role in making electricity generation cleaner while maintaining reliability by balancing the variability of other emissions-free sources like solar and wind. Innovative exploration and conversion technologies can help get the most out of our nation’s substantial geothermal resources. In 2010-2011, LPO guaranteed loans through the Section 1705 program for three geothermal projects -- Blue Mountain, Ormat Nevada and USG Oregon.
Advances in how we store energy and transmit electricity are helping to integrate more renewable energy onto the electric grid and improve the grid’s resiliency. LPO helped to finance the One Nevada Line, a 235-mile transmission line that is helping to bring more wind and solar power generation from Wyoming, Idaho and Nevada to California and other major-load areas.