As Secretary Granholm recently noted, the U.N.'s Intergovernmental Panel on Climate Change (IPCC) August 2021 report is an urgent call to action for all nations to dramatically slash their greenhouse gas emissions as soon as possible.
Since 2009, the Department’s Loan Programs Office (LPO) has disbursed more than $30 billion in financing to projects that have together already had measurable impact in addressing the climate crisis. Among the LPO projects that are operating or under construction today are the first five utility-scale photovoltaic (PV) solar farms in the United States, one of the world’s largest wind farms, the first new advanced nuclear reactor in over three decades, and Tesla’s Fremont, CA, manufacturing facility.
But the greenhouse gas emissions prevented or abated by these projects are only part of the story. In fact, the majority of LPO’s climate impact is realized through the role of its project financing as a crucial catalyst for spurring energy sectors to reduce emissions and private lenders to invest in clean energy. Since LPO’s investments helped to launch the utility-scale solar power sector, for example, the U.S. solar industry has reduced emissions by trillions of tons and private investment now dwarfs the size of LPO’s original loan guarantees.
And the impact is measurable: Through Fiscal Year 2021, the clean energy and auto manufacturing projects in LPO’s portfolio have directly and cumulatively avoided more than 200 million metric tons of carbon dioxide emissions. This is equivalent to taking more than 45 million gasoline-powered cars off the road.
As LPO continues to work to provide access to capital and flexible financing to innovative clean energy infrastructure, this impact is poised to continue, because two of LPO’s loan programs have eligibility requirements specifically related to avoiding carbon emissions. Through LPO’s Title 17 Innovative Energy Loan Guarantee Program, DOE guarantees loans to projects that avoid, reduce, or sequester greenhouse gas or air pollutant emissions. LPO’s Advanced Technology Vehicles Manufacturing Loan Program, also builds emissions impacts into its eligibility criteria, with DOE providing loans to manufacture more efficient light-duty or ultra-efficient vehicles, or eligible vehicle components.
LPO has more than $40 billion in available loans and loan guarantees to help build a bridge to bankability for innovative technologies and business models that are yet to reach full market acceptance, financing commercial-scale projects that can have an impact now and in the future toward meeting the President’s climate goals, while catalyzing the private investments required to decarbonize our economy.