The Department of Energy plans to provide a loan guarantee to the world's largest wind farm, increasing the agency's total loan guarantees or conditional commitments to almost $16 billion.
If approved, the loan guarantee will help fund the Caithness Shepherds Flat wind project, an 845-megawatt electric generating facility in eastern Oregon. The project was delayed earlier this year when the Pentagon raised concerns that the turbines would interfere with radar signals, but Defense Department officials dropped their opposition in April.
Now, DOE hopes to help get the project off the ground by providing a partial guarantee for a $1.3 billion loan. The conditional commitment brings to 15 the total projects under the DOE's loan guarantee program, which is partly funded by the American Recovery and Reinvestment Act.
"Thanks to the Recovery Act, we are creating the clean energy jobs of the future while positioning the U.S. as a world leader in the production of renewable energy," Energy Secretary Steven Chu said in a press release last Friday. "This project is part of the Administration's commitment to doubling our renewable energy generation by 2012 while putting Americans to work in communities across the country."
Sponsored by Caithness Energy LLC and General Electric Co., the Caithness project consists of 338 GE wind turbines "designed to provide high efficiency and increased reliability, maintainability and grid integration," according to the release. The facility will avoid the equivalent of greenhouse gas emissions from 212,141 passenger vehicles and will provide 400 construction jobs and 30 permanent jobs.
According to the DOE release, the Caithness loan is expected to be funded by "institutional investors and commercial banks" led by Citi, as well as the Bank of Tokyo-Mitsubishi UFJ Ltd., RBS Securities and WestLB Securities Inc.
The facility is the largest project to receive a conditional loan guarantee from DOE so far. The department's program aims to cut greenhouse gas emissions by accelerated private-sector technology.
But the program has often been criticized for delays; DOE authorized its first loan guarantee this year, four years after the program launched. It has now finalized four loans and offered conditional commitments to 11 more. By next October, the agency is required to disburse billions of stimulus dollars in renewable energy loan guarantees, and DOE officials have said they are on track to speed up the awarding of such guarantees.
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