In the final days of the Biden administration, the Department of Energy’s Loan Programs office finalized two high-profile clean tech loans. The financing, totaling more than $8 billion, went to electric vehicle maker Rivian and green hydrogen developer Plug Power.
The Loan Programs Office also pushed out nearly $23 billion in conditional loans to a half-dozen electric utilities to support energy generation, transmission and grid modernization in 12 states.
The Loan Programs Office, or LPO, helmed by climate tech veteran Jigar Shah, makes loans and guarantees for innovative climate tech companies looking to build their first plants in order to provide a “bridge to bankability.” Under the Inflation Reduction Act, LPO’s lending authority was boosted from $40 billion to $400 billion.
The office has been scrambling to complete loans in its pipeline and issue new ones conditioned on technical, legal, environmental, and financial milestones that are part of the rigorous vetting process.
President-elect Trump, who will be sworn in on Monday, has promised to claw back any unspent funds from the Biden administration’s sweeping climate legislation. Among its top targets: LPO’s billions of unspent funds and any conditional loans and guarantees not yet finalized.
At a conference hosted by Shah and LPO in December, DOE and clean tech execs emphasized jobs, national security and the competition with China over cutting emissions and decarbonizing the economy. With bipartisan support for geothermal, nuclear energy, critical minerals and grid modernization, Trump could opt to keep the LPO but redirect the funds towards those technologies as well as oil and gas.
Time to build
The nearly $6.6 billion loan to Rivian will help the EV maker construct a nine million square foot manufacturing plant in Georgia that could churn out 400,000 mid-sized SUVs. The plant is expected to support 2,000 full-time construction jobs and 7,500 operations jobs through 2030, with a quarter of the jobs being drawn from the local community.
Latham, New York-based Plug Power will use its $1.7 billion loan to build up to six facilities that will produce clean hydrogen to power fuel cell-electric vehicles used in logistics and warehouse applications by companies such as Amazon, Walmart and Home Depot.
Plug Power’s electrolyzers are designed to operate with variable energy, making them well suited for intermittent solar and wind power. In addition to reducing carbon emissions and enhancing grid resilience, Plug Power’s Andy Marsh said, “we believe the hydrogen economy aligns closely with national security interests, ensuring that the US remains at the forefront of energy technology development and deployment on a global scale.”
Scaling partner
LPO has played an important role in providing low-cost loans to help clean tech companies in critical next-generation industries get their footing as they scale to commercial production.
“Building a car company, building an energy company, these are businesses that take a tremendous amount of capital,” Rivian founder RJ Scaringe said in a conversation with Shah at December’s Deploy conference. “The role of the Department of Energy is the scaling partner.”
The Rivian and Plug Power loans bring LPO’s total finalized loans to at least 17 loans representing some $22 billion.
Earlier this week, Oakland, Calif.-based Brimstone clinched a $189 million LPO loan to help defray costs for a first-of-a-kind plant for decarbonized cement, smelter-grade alumina – the core ingredient for aluminum – and other byproducts.
In addition to the finalized loans, LPO issued a flurry of conditional loans on Thursday to more than a dozen utilities, via its Title 17 Energy Infrastructure Reinvestment program. The biggest outlay, nearly $9 billion to DTE-affiliated utilities, would support the addition of renewable energy and battery storage in Michigan.
A guarantee of up to $3.5 billion to PacifiCorp, the largest grid operator in the western US, will help finance new transmission lines in Idaho, Oregon, and Utah. The lower financing costs for the utilities will be passed on to consumers, LPO said.
More loans were expected to be announced on Friday.
