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Meantime, September 30 is a deadline to spend $9 billion more...
Solyndra Flop Doesn’t Slow $9.2 Billion Push to Aid Wind, Solar
By Jim Efstathiou Jr., Bloomberg News, 2011-09-19
Sept. 19 (Bloomberg) -- The Obama administration, defying
congressional Republicans after the failure of solar-panel maker
Solyndra LLC, is working to award as much as $9.2 billion in
government financing to renewable energy companies before a
Loan guarantees for 14 companies will close by month’s end
if the projects meet government lending rules, Damien LaVera, a
Department of Energy spokesman, said in an interview. “We want
to get as many of these done in a way that responsibly protects
the taxpayers’ interest,” he said. “If they meet conditions
set out in the agreement, then they’ll close.”
Solyndra filed for bankruptcy protection on Sept. 6, after
receiving $535 million in loan guarantees from the
administration, and the Federal Bureau of Investigation raided
its Fremont, California, headquarters two days later.
Republicans have called Solyndra a “poster child” for the
failure of clean-energy subsidies awarded by the Department of
Energy under President Barack Obama.
“I am very concerned about where the $10 billion DOE has
left to spend before the September 30 deadline is going,”
Representative Cliff Stearns, a Florida Republican, said at the
Sept. 14 hearing of a House oversight panel he heads.
“Taxpayers would be better served by not risking even more of
their money, instead using it to reduce our mounting national
deficit.”
Obama’s stimulus program, passed by Congress in 2009, set
the Sept. 30 deadline for loan guarantees for most alternative
energy projects. Programs to invest in advanced-technology
vehicles and nuclear power plants will continue.
Third to Fail
Solyndra was the third U.S. solar manufacturer to fail in a
month as lower-cost Chinese panels and weak global demand drive
a wave of industry consolidation. Solyndra, the only one of the
three with a federal guarantee, produced cylindrical devices
that convert sunlight into electricity using copper-indium-
gallium-diselenide thin-film technology. Standard solar panels
are flat.
Nine of the pending loan guarantees are for construction of
solar-power stations and one is for a wind farm, projects that
carry less risk than manufacturing because the power they will
produce is already sold, according to Shyam Mehta, senior
analyst for GTM Research, a Boston-based analysis firm.
“Those I think are relatively low-risks investments,”
Mehta said in an interview. “These farms are going to generate
energy and are going to be paid a price for the electricity
generated based on power-purchase agreements.”
Wind, Corn Cobs
Nordic Windpower of Kansas City, Missouri, a closely held
maker of wind turbines, is seeking a $16 million loan guarantee.
Abengoa Bioenergy Biomass of Kansas LLC, a unit of Seville,
Spain-based Abengoa SA, and Poet LLC of Sioux Falls, South
Dakota are seeking aid to build the first U.S. plants to produce
ethanol using non-food feedstocks, such as corn cobs and switch
grass.
Ormat Technologies Inc. of Reno, Nevada, is awaiting a $350
million loan guarantee to build geothermal power stations that
can convert heat into electricity in Nevada. Chief Executive
Officer Dita Bronicki said she doesn’t expect the uproar over
Solyndra to derail Ormat’s application.
“It’s hard to predict political fallout,” Bronicki said
in an interview. “We are quite confident that we will close
before Sept. 30.”
Ormat Technologies is a unit of Yavne, Israel-based Ormat
Industries Ltd. Foreign-owned companies are eligible for loans
if their projects are located in the U.S., according to the
Energy Department’s website.
‘Moving Along Well’
“We’re fairly confident that our process is moving along
very well,” Jeff Broin, CEO of Poet, said in an interview.
“It’s expected that some project will fail. That’s why a loan
guarantee program does exist in the first place.”
The Energy Department has provided about $9.6 billion in
loan guarantees to 18 developers and manufacturers since 2009.
Since Solyndra said on Aug. 31 that it intended to file for
bankruptcy protection, the Energy Department has closed a $1.2
billion loan guarantee for Abengoa to build a solar-thermal
power plant in California; a $90.6 million loan guarantee for
Cogentrix Energy LLC, a unit of Goldman Sachs Group Inc., to
build a solar manufacturing plant in Colorado; a $150 million
loan guarantee to 1366 Technologies Inc., a maker of silicon
wafers for solar cells; and a partial guarantee of a $344
million loan to SolarCity Corp., a closely held installer and
owner of rooftop power systems.
Democrats led by Representative Henry Waxman of California
said Republicans were using Solyndra to taint other clean-energy
projects.
‘Science Denier’
“The majority of Republicans on this committee deny that
climate change is real,” Waxman said at last week’s hearing.
“If you are a science denier, there is no reason for government
to invest in clean energy.”
Solyndra’s collapse argues for a halt rather than a rush to
fund projects, House Energy and Commerce Committee Chairman Fred
Upton, a Michigan Republican, said at the hearing.
“The administration was so wrong about Solyndra after nine
months of due diligence, how can it possibly exercise the proper
controls when billing out another $10 billion within the next
couple of weeks?”
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