DOE Funding Targets Cellulosic Ethanol Advancement

The U.S. Department of Energy announced $160 million in cost-shared funding over three years to construct up to three biorefineries in the United States. Energy Secretary Samuel W. Bodman made the announcement while visiting the Archer Daniels Midland Ethanol Plant, one of his four stops last week to promote the Administration’s energy initiatives.

Bodman also highlighted the United States Department of Agriculture’s announcement of almost $188 million in loan guarantees and grants for renewable energy and energy efficiency projects. The $160 million solicitation is part of President Bush’s Biofuels Initiative, which will lead to the use of non-food based biomass, such as agricultural waste, trees, forest residues, and perennial grasses in the production of transportation fuels, electricity, and other products. One of the goals of this initiative is to accelerate research and make “cellulosic ethanol” cost-competitive by 2012, offering the potential to displace up to 30 percent of our nation’s current fuel use by 2030. The goal of the solicitation announced this week is to demonstrate that commercial biorefineries can be profitable once initial construction costs are paid. There is a $100,000,000 cap on any single-demonstration award, and projects are required to show a 60/40 (industry/government) cost share. Secretary Bodman also highlighted Agriculture Secretary Mike Johanns’ announcement recently in Las Vegas of $176.5 million available in loan guarantees and almost $11.4 million in grants to support investments in renewable energy and energy efficiency improvements by agricultural producers and small businesses. The Renewable Energy and Energy Efficiency loan and grant program was established under Section 9006 of the 2002 Farm Bill to encourage agricultural producers and small rural businesses to create renewable and energy efficient systems. A total of 435 grants totaling $66.7 million have been awarded in 36 states since the program began and, in 2005, for the first time, renewable energy loan guarantees were made under the program. One guarantee, for $10 million, was combined with a Business and Industry guarantee to help fund construction of a 20-megawatt (MW) biomass electrical generating plant in Arizona. That plant will use wildfire-damaged timber along with waste from a nearby paper mill as a fuel sources. Grants have been awarded to fund a wide range of wind, solar, biomass, geothermal and conservation technologies. Applications for grants must be completed and submitted to the appropriate USDA Rural Development state office postmarked no later than May 12, 2006. Guaranteed loans will be awarded on a continuous basis. Applications are due to the National Office for funding consideration by July 3, 2006. Any guaranteed loan funds not obligated by August 1, 2006, will be made available for competitive grants. For more information refer to the announcement in the February 13, 2006 Federal Register or contact any state Rural Development office. For more information on the loan guarantees and grants for renewable energy and energy efficiency projects, see the following two links.
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