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Summary:

Updated to include quote from DOE’s David Frantz: Energy Secretary Steven Chu wanted checks cut in four weeks. Today, the director of the Department of Energy’s much-delayed loan guarantee program for clean energy technology, David Frantz, revealed what he sees as a realistic timeline: In testimony […]

Updated to include quote from DOE’s David Frantz: Energy Secretary Steven Chu wanted checks cut in four weeks. Today, the director of the Department of Energy’s much-delayed loan guarantee program for clean energy technology, David Frantz, revealed what he sees as a realistic timeline: In testimony today before the Senate Energy and Natural Resources Committee, he said that while the program will begin disbursing loans this year, guarantees for projects that require environmental impact statements will not go through until 2010. This means more waiting for the program’s first round of 16 finalists, including Solyndra, Beacon Power and Tesla Motors (which has also requested low-interest loans under a separate DOE program). Update: Frantz added that for the handful of projects that have been placed in the fast-tracked group (which includes all three of those companies), “[T]hose projects can go through the process in just a few months, from due diligence to funding or issuance of a guarantee.”

Frantz acknowledged that the program “faced challenges in its first few years,” referring to a lack of support from Bush administration officials. But that’s changed. With a new team in the White House, he said the program has “a new sense of energy to make these decisions.” Nonetheless, he added that more delays could ensue if new funding requests for the program are not approved by next month.

The last administration’s Assistant Secretary for Energy Efficiency and Renewable Energy, Andy Karsner, said the loan program — and the DOE at large — face bigger problems than money. Karsner advocated for the creation of a clean energy bank — a new government entity that could relieve the DOE of responsibilities it was never meant, and is not equipped to handle: namely, the actual rollout and financing of technology. “The guts of what we do at the DOE well is science and technology,” he told the Committee. Once things get out of the R&D phase, he said, the DOE is “handcuffed” by its position as a civil service agency.

Kevin Book, a senior analyst for Friedman Billings Ramsey & Co., agreed on the question of competence. You can’t expect scientists to be financiers, he said, and “you certainly can’t have the bankers become the scientists.”

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  1. Your article incorrectly states that Beacon Power’s DOE loan will be delayed until 2010 along with other projects requiring environmental impact studies.

    The Beacon Power project was specifically mentioned as NOT being one of those projects that was to be delayed.

    It was indirectly indicated that the Beacon Power project was the fastrack to approval.

    Please listen to the hearging via this link below.
    I have provided a transcript along with video time stamps that deal with Beacon Power being on the fast track.

    http://energy.senate.gov/public/index.cfm?Fuseaction=Hearings.LiveStream&Hearing_id=3e5bbb28-ae11-75e6-3270-3112e03faaca

    Senator Jeanne Shaheen of NH questioned Mr. Franz about the small companies that have been waiting a long time for the DOE loans to come though.

    Senator Shaheen’s words to Mr. Franz at time stamp 76:40.

    “A New Hampshire company called Semikron.
    It subcontacts with Beacon Power in MA, and it is one of the 16 projects deemed qualified.

    Could you talk a little more about…”

    Mr. Franz words to Senator Shaheen at time stamp 79:10

    “Among the now group of 11 projects, and you mentioned one of the senator,

    if in fact, if a project is a manufacturing project, it does not require an EIS it only requires an environmental assesment, those projects we can move along much more quickly…..the project you mentioned happens to be in that group of projects I mentioned, that handful of projects, that we now have on the very first fastrack.

    And those projects can in fact go through the process in just a few months….”

    Time stamp; 80:08

    Senator Shaheen’s response..

    “Oh good, so I can tell Semikron that that they should expect to hear shortly”

    Mr. Franz.

    “We’re working with them! Actually”

    So, how in the world were you able to interpret the above as Beacon Power being delayed until 2010?

  2. Correction: I wrote..

    Your article incorrectly states that Beacon Power’s DOE loan will be delayed until 2010 along with other projects requiring environmental impact studies.

    Should have read

    Your article seems to imply that Beacon Power’s DOE loan will be delayed until 2010 along with other projects requiring environmental impact studies. This is not the case….

  3. Josie Garthwaite Friday, February 13, 2009

    @ ipdrive – We’ve updated the post with Frantz’s comment about the timeline for fast-tracked applications.

  4. Sweet Solar Home » Blog Archive » Rise & Shine: February 13, 2009 Friday, February 13, 2009

    [...] Timeline Revealed for DOE Loan Program: Don’t Get Your Hopes Up In testimony before the Senate Energy and Natural Resources Committee, David Frantz said that while the program will begin disbursing loans this year, guarantees for projects that require environmental impact statements will not go through until 2010. [...]

  5. This article states that Beacon Power is among those DOE loan applicants that will likely have to wait until 2010 to be approved, due to the need for an Environmental Impact Statement (EIS). This is false. Beacon Power is much farther along in the application review process than your article suggests.

    In fact, Beacon’s application for a loan guarantee to help fund a 20 MW flywheel-based frequency regulation plant to be built in Stephentown NY, is in the DOE’s due diligence phase — which is the step that follows any environmental review. Moreover, Beacon’s project does NOT require an EIS at all. Beacon has already moved beyond the necessary Environmental Assessment (EA), a draft of which is posted on the DOE site here:

    http://www.lgprogram.energy.gov/DraftDOE-EA-1631.pdf

    Beacon Power is expecting to receive a formal approval of the project’s Environmental Assessment soon. That expectation is reinforced by the DOE’s own summary of Beacon’s EA status, seen on p. 22 of this document (which was issued last month):

    http://www.gc.energy.gov/NEPA/documents/January2009StatusChart.pdf

    Thank you for the necessary correction that appears above, and the inclusion of the clarifying statement from David Frantz at yesterday’s Senate hearing. The information I’ve provided above should put to rest the idea that Beacon’s loan guarantee review process will be delayed for any such lengthy period.

    Gene Hunt
    Director of Corporate Communications
    Beacon Power Corporation

  6. Chu Unveils DOE Changes, Timeline for Stimulus Energy Spending « Earth2Tech Thursday, February 19, 2009

    [...] this month, DOE Loan Guarantee Program Director David Frantz revealed at a Senate hearing that even the most progressed applications under the older program (created under the Energy Policy [...]

  7. here we are 1 /2 yrs. AFTER this article was published and BEACON still hasn’t received funding from DOE LG.

    so who was crrect…Hunt of BCON or Mr. Franz?

    maybe Hunt shoul apologize to authot of this aeticle.

  8. The DOE ATVM and Loan Guarantee Programs were/are one of the most corrupt, kick-back driven, favoritism-ridden, old-white-man-from-Detroit laden schemes in political history.

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