Throughout 2014, the Department of Energy (DOE) Loan Programs Office (LPO) announced nearly $25 billion in new loan guarantee authority across three solicitations and promoted the success of its existing portfolio, while diligently working behind the scenes to streamline processes and service its existing project pipeline. The week before last, the LPO released updated guidance to the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program and announced that approximately $16 billion of authority remains available to new applicants within the program. These announcements have caught the attention of industry, but skepticism continues to outweigh enthusiasm as a result of past experience with the program and its current fee structure. The update below provides insight into the DOE LPO's most recent announcements, including Wilson Sonsini Goodrich & Rosati's recent experience with the program, examples of innovative projects of interest to the program, and dates for upcoming government financing workshops in the Bay Area that will address these topics in greater depth.

Overview and Status of Department of Energy Loan Programs Office Solicitations

As of January 2015, the DOE LPO maintains approximately $40.5 billion in loan guarantee authority for its Title XVII and ATVM programs, with $170 million appropriated to cover credit subsidy costs (CSCs) for renewable energy and energy efficiency projects.¹ Application fees for all three Title XVII solicitations (renewable, fossil, and nuclear) are now the same: $50,000 for a Part I submission and $350,000 for a Part II submission for projects exceeding $150 million. For Title XVII loan applications that do not exceed $150 million, the Part II submission fee is reduced to $100,000; there is no application fee for applications under the ATVM program. The following is an overview of each of the opportunities currently available and examples of the types of projects that may be eligible for each solicitation.

Renewable Energy and Energy Efficiency Solicitation. In mid-2014, the LPO issued a solicitation for up to $4 billion in loan guarantees for innovative renewable energy and energy efficiency projects that reduce greenhouse gas (GHG) emissions. Examples of potential projects include integrated energy storage and solar or advanced microgrid projects, a tranche of residential solar energy projects with an innovative technology or energy storage, energy storage retrofit projects, retrofits of existing hydro or other renewable energy assets, renewable chemicals production projects with an advanced biofuels component, and projects located in the U.S. that utilize funding from foreign entities or financial institutions.² This solicitation is unique in that $170 million has been appropriated to help cover CSCs above 7 percent. The final Part I submission deadline is December 2, 2015, and the final Part II deadline is March 2, 2016.

Advanced Fossil Energy Solicitation. In late 2013, the LPO issued a solicitation for up to $8 billion in loan guarantees for innovative fossil energy projects that reduce GHG emissions through resource development, carbon capture, low carbon power system, or efficiency improvements. The final Part I submission deadline has been extended to December 30, 2015, and the final Part II deadline to February 17, 2016. This opportunity can provide key support for innovative energy, materials, and fossil-derived biofuels technologies, which might otherwise find limited options in commercial finance markets and do not qualify under the renewables solicitation.

Advanced Nuclear Solicitation. In late 2014, the LPO issued a solicitation for up to $12.5 billion in loan guarantees for innovative nuclear energy and front-end nuclear projects that reduce GHG emissions. Key technology areas of interest include advanced nuclear reactors, small modular reactors, uprates and upgrades at existing facilities, and front-end nuclear projects. The final Part I submission deadline is March 16, 2016, and the final Part II deadline is October 19, 2016.

Advanced Technology Vehicles Manufacturing Solicitation. The LPO continues to accept applications for up to $16 billion in loan guarantees for the ATVM Loan Program, which includes domestic manufacturing of advanced technology vehicles and associated components. For companies seeking to expand materials, component, or manufacturing lines, the ATVM program offers an attractive opportunity for low-interest capital, fewer fees than the Title XVII program, and a precedent for both high-value loans and the LPO's willingness to interpret its legislative mandate as broadly as possible (e.g., loans in support of companies beyond established automakers such as Tesla and Fisker). Also, unlike the Title XVII program, the ATVM program is not subject to an expiration date, application fees, or excessive diligence and project negotiation fees. In February 2015, the ATVM program released an updated guidance document for prospective applicants.

The DOE is actively seeking quality applicants under all four solicitations, with LPO representatives traveling throughout the U.S. during the first half of 2015. WSGR estimates that fewer than two dozen applicants have applied to either the renewable or fossil programs.

Navigating the Department of Energy Loan Programs Office Application Process

The vast amount of financing authority available within the DOE LPO is difficult for industry to ignore, but this program can be especially difficult to navigate. Fortunately, there are streamlined and efficient approaches that companies can take to submit a comprehensive application and proceed through the process. Communicating with DOE representatives and fully understanding the process, hurdles, and potential solutions are efficient methodologies for pursuing the program. For example, recent discussions with the LPO have revealed that the program is undertaking significant efforts to decrease CSCs and make the program more attractive for companies.

WSGR remains engaged with the LPO to ensure companies are moving through the process in a company-friendly manner and provide pragmatic guidance to companies throughout the process. Additionally, DOE LPO-specific workshops and events that attract participation by industry as well as key program officials can serve as a starting point for companies to obtain information about DOE LPO programs and projects of interest to the program. These workshops can also serve as an opportunity to provide feedback to key government officials in a productive and effective manner.

Government Financing Workshops Featuring the Loan Programs Office Executive Director

Wilson Sonsini Goodrich & Rosati is hosting one such workshop on March 4 in Palo Alto and another on March 6 in San Francisco. Companies should consider attending these events if they wish to pursue the open DOE LPO solicitations or other government financing programs. Click here to register.