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| Fri, 3rd Feb 2023 9:40:00 |
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The man in charge of how the US spends $400bn to shift away from fossil fuels |
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The Department of Energy’s loan programs office was ‘essentially dormant’, says Jigar Shah, its head – but now it’s ready to bankroll clean energy projects
Deep in the confines of the hulking, brutalist headquarters of the US Department of Energy, down one of its long, starkly lit corridors, sits a small, unheralded office that is poised to play a pivotal role in America’s shift away from fossil fuels and help the world stave off disastrous global heating.
The department’s loan programs office (LPO) was “essentially dormant” under Donald Trump, according to its head, Jigar Shah, quoting energy secretary Jennifer Granholm’s description of the office, but has now come roaring back with a huge war chest to bankroll emerging clean energy projects and technology.
Last year’s vast Inflation Reduction Act grew the previously moribund office’s loan authority to $140bn, while adding a new program worth another $250bn in loan guarantees to retool projects that help cut planet-heating emissions. Which means that Shah, a debonair former clean energy entrepreneur and podcast host who matches his suits with pristine Stan Smiths, oversees resources comparable to the GDP of Norway: all to help turbocharge solar, wind, batteries and a host of other climate technologies in the US.
With a newly divided Congress stymieing any new climate legislation in the foreseeable future, Shah has emerged as one of Washington’s most powerful figures in the effort to confront global heating. Shah says such focus on him is “hyperbolic” but the White House is pinning much of its climate agenda on an office that had around 85 people when Shah joined in March 2021. It now has more than 200 staffers as it scrambles to distribute billions in loans to projects across the US.
John Podesta, senior adviser to Joe Biden on clean energy, said that the loans office is “essential to the effective implementation” of the administration’s goal to eliminate planet-heating emissions by 2050. “Jigar is laser-focused on working with all levels of government, project sponsors and affected communities to deliver on that mission and realize results for the American people,” Podesta said.
“There’s a lot of responsibility that’s been put on to this office, clearly Congress gave us those additional resources,” said Shah, who has been busy connecting the newly enriched loans office with all corners of the emerging clean energy economy, not just wind farms and solar operators.
Shah said there was “some rust on the gears” among those tasked with reanimating the office following the tenure of Trump, a president so wary of even the most lo-fi environmental technology that he complained energy efficient lightbulbs made him look orange and became fixated upon the weak flushing ability of water-saving toilets.
But the clean energy loans now appear to be gaining momentum, with 125 current applications seeking $119bn worth of loans to act as the “bridge to bankability”, as Shah puts it. About $2.5bn has been given to Ultium Cells to manufacture lithium-ion batteries for electric cars in three states, $700m could go to a project that will mine lithium in Nevada – despite concerns this will negatively affect a rare flower in the region – and more than $500m for the world’s largest facility creating “green” hydrogen, to be used to fuel trucks and industry, in Utah.
“We’ve left no stone unturned,” said Shah, who says he understands the mindset of entrepreneurs, having previously founded the renewable energy companies SunEdison and Generate Capital, as well as being the co-host of The Energy Gang podcast.
“We’ve called every one of those companies that have been labeled climate tech, whether it’s green chemicals, green cement, green steel,” he said. “It doesn’t matter who it is, we’ve called them and said, ‘Hey, let me introduce you to the loan programs office, so now we can help.’”
This new prominence is set to provoke a stinging Republican backlash, however. To conservatives, the loans office, which was founded in 2005, is forever tarred by the much-criticized decision during Barack Obama’s administration to loan $535m to Solyndra, the California solar firm, only for the company to file for bankruptcy two years later, in 2011.
The huge new financial arsenal at the office’s disposal risks “Solyndra on steroids”, according to Cathy McMorris Rodgers, the incoming Republican chair of the House energy committee. A group of Republicans led by Rodgers have said the new loan authorities “raise questions about increased risks of waste, fraud and abuse, especially if the administration uses the program for its rush-to-green agenda”.
Shah, who could well be hauled in front of Rodgers’ committee this year, said GOP scrutiny is “totally ordinary and expected” and that the loans office is a more rounded and mature entity than during the Obama years when it still, a year before Solyndra collapsed, notably backed an upstart car company called Tesla with a $465m loan. The failure rate of 3.3% for its loans is about that you’d expect from a prudent bank lender rather than a profligate waster of taxpayer money, Shah points out. Read original full article
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