Successful CMOs achieve growth by leveraging technology. Join us for GrowthBeat Summit on June 1-2 in Boston
, where we'll discuss how to merge creativity with technology to drive growth. Space is limited. Request your personal invitation here
The U.S. Department of Energy seems undeterred by speculation that Republican gains in the mid-term elections this year will put the damper on its cleantech loan and grant initiatives — either that, or it’s trying to have as much impact as possible while it still can. Today, it announced a $102 million loan guarantee to U.S. Geothermal, Inc., and another $612 million for carbon capture projects.
The loan for geothermal is earmarked to aid the construction of a 22-megawatt power plant in Oregon, creating an estimated 150 temporary jobs and 10 permanent, full-time positions, when it opens in two years. U.S. Geothermal, Inc. claims that the technology behind the facility will be more advanced, allowing energy to be drawn from the earth’s crust more efficiently for higher yields.
The method being used, called binary geothermal, requires the drilling of wells 4,500 to 6,000 feet deep. Incredibly hot water is then sucked up toward the surface, where it is used to heat another liquid that is vaporized to turn turbines and generate electricity. Goethermal, Inc. says it has perfected the way it extracts heat from the water, meaning more energy output from single sites. This is a notable breakthrough, considering how sparse optimal geothermal locations are in the U.S.
The power generated by the new plant is already set to be purchased by the Idaho Power Company for the next 25 years.
Carbon capture, like geothermal energy, exists at the fringes of the cleantech sector. When you think green technology, you probably envision solar panels, or wind turbines. The fact that the DOE is pumping so much money into both of these less glamorous areas demonstrates just how holistic the department is hoping to be in its approach.
Carbon capture had a big day today, receiving $612 million in stimulus funding from the DOE, which will be matched with $368 million in private financing to round out nearly $1 billion of new capital. The money is going to three projects charged with developing large-scale carbon capture and storage technology.
This initiative feeds directly into one of the Obama administration’s primary cleantech goals: to commercially deploy practical carbon capture systems within the next decade. To hit this deadline, between five and ten of these smaller demonstration projects need to be up and running in the next six years, the DOE says.
Just the three selections made today are supposedly capable of removing 6.5 million tons of carbon dioxide from the atmosphere each year, the equivalent of removing 1 million cars from U.S. roads. Here’s a brief overview of the recipients:
Leucadia Energy — Based in Louisiana, the company is using its $260 million to sequester 4.5 million tons of carbon dioxide from a methanol plant. The carbon will be piped over 12 miles and used in oil recovery operations. It is partnering with General Electric, Black & Veatch and Denbury Onshore, among others to make this happen.
Air Products & Chemicals, Inc. — The Texas company says it will be capturing and sequestering 1 million tons of carbon dioxide from a steam-methane facility. The carbon will also be piped 12 miles to be used in oil recovery for Denbury Offshore at its West Hastings oilfield. Air Products will get $253 million for the effort.
Archer Daniels Midland — Based in Illinois, the project will capture and sequester 1 million tons of carbon dioxide every year from an ethanol plant in Illinois. The carbon will be stored indefinitely in a saline reservoir near the plant. The company, known best for its scandalous attempt to fix the global price of Lysine, is receiving $99 million from the DOE.
The Department of Energy faces a real challenge with elections in the fall. Republicans are solidly opposed to big spending on clean energy initiatives, with many criticizing the department’s generous grant and loan programs. They are also lining up against the energy and emissions legislation pitched by Senators John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) There’s a distinct chance that — if they regain the majority in the Senate and/or House of Representatives — the DOE’s tap of green funding will be shut off.
This isn’t just an issue for entrepreneurs in the sector — but also their private investors. Initially, it was anticipated that government intervention would mitigate risks for venture capital and private equity firms, especially in the wake of the economic downturn. But in many cases, the reverse has been true — with prospective backers holding off on funding companies until they see what happens when they aren’t being buoyed by big stimulus package sums.
In the meantime, the DOE, with Secretary Steven Chu at the helm, shows no signs of slowing down. It is still slated to provide follow-on rounds of funding to projects working on solar, wind and the Smart Grid.
VentureBeat’s VB Insight team is studying marketing analytics...
Chime in here, and we’ll share the results.