Reported by Staff

Last week the Department of Energy detailed the first round of grants to 12 renewable energy projects whose developers chose to receive cash payments rather than tax credits.

The speed with which the Federal government acted on the $500 million in funding surprised even those officials involved in the process. It was only on July 31st that the Treasury Department opened the application process, pledging to award grants within 60 days of receiving a completed application.

“What we’re seeing here over the first 30 days is how effectively this is working,” said Matt Rogers, senior advisor overseeing DOE investments from the economic stimulus package, based in Washington, DC. “On speed, I think we’re doing very well.”

The projects receiving money range from $157,809 for a solar PV project at a fitness facility in Colorado to $114.1 million for a wind farm in Texas. The average award was $40 million. Iberdrola Renewables was the biggest beneficiary of the first-round awards, receiving five grants totalling $294.9 million for wind energy projects in four states.

A change in the tax code passed by Congress in February allows biomass, wind and other renewable energy projects that could claim tax credits against energy production to temporarily choose to receive an up-front investment tax credit (ITC) normally reserved for solar projects. The grant program is part of the government’s effort to jumpstart renewable energy project development, which has been adversely affected by the credit crunch.

As part of the economic stimulus package, the feds also allowed project developers who wish to receive cash payments in lieu of the tax credits to apply for a federal government program that will provide an estimated $3 billion in payments to support $10 billion-14 billion in projects.

The 12 wind and solar projects will provide 840MW of power, representing a 3% increase in total  renewable generating capacity in the nation, Rogers said.

Switching from the production tax credit to the grant program was made necessary by the collapse of U.S.  financial markets last fall,” said Ralph Currey, president and chief executive officer of Iberdrola Renewables, the American arm of the Spanish energy firm. “This change will enable our company and others to keep investing in new renewable energy while the financial markets mend.”

Currey expects Treasury to act on three additional grant applications from the company this month. Iberdrola Renewables has a further five wind projects under construction that would also be eligible for the grants.

“The Treasury grant program is serving its intended purposes,” Currey said. “The staff at the Treasury Department has implemented the grant program with speed and care.”

In this first round, the government provided more than $500 million of the estimated $3 billion in awards because some of the largest projects completed the application process first. But that $3 billion is a projection not a cap, so the actual dollar amount distributed via the program could be even higher. The government expects that many future projects will be closer in total dollar amount to the smallest project in this round.

“There is no competition for these payments,” said Dan Tangherlini, assistant secretary for management at Treasury in Washington. “All eligible projects will receive financing.”

While the initial focus has been on wind and solar technologies, the breadth of projects, including geothermal projects, in the pipeline is “attractive”, Rogers said. “The diversity of applications in terms of technology, size and geographic mix is something we’re quite encouraged by,” he added. 

The following renewable energy projects received grants from the US government during the first round of awards:

Movement Gym PV System
 Boulder, Colorado
 $157,809
 
Solaire Development
 Danbury, Connecticut
 $2,578,717
 
Evergreen Wind Power V
 Danforth, Maine
 $40,441,471
 
Moraine II Wind Farm
 Woodstock, Minnesota
 $28,019,520
 
Canadaigua Power Partners
 Cohocton, New York
 $52,352,334
 
Canadaigua Power Partners II
 Cohocton, New York
 $22,296,494
 
Wheat Field Wind Farm
 Arlington, Oregon
 $47,717,155
 
Hay Canyon Wind Farm
 Moro, Oregon
 $47,092,555
 
Pebble Springs Wind Farm
 Arlington, Oregon
 $46,543,219
 
Highland Wind Farm
 Salix, Pennsylvania
 $42,204,562
 
Locust Ridge II, LLC
 Shenandoah, Pennsylvania
 $59,162,064
 
Penascal Wind Farm
 Sarita, Texas
 $114,071,646
 
Total:
 
 $502,637,546
 

 
 
 
 
Updated 03 September 2009