DOE seeks demo plant proposals, sets loan guarantee rules

By Susanne Retka Schill
The development of new technologies for cellulosic ethanol plants will receive a boost from the U.S. DOE's recently announced grant program that will provide up to $200 million in funding over five years. The DOE anticipates selecting five to 10 recipients.

Applications for the small-scale cellulosic biorefinery grants are due Aug. 14. The grants will support demonstration projects at 10 percent of commercial scale that will produce liquid transportation fuels, as well as biobased chemicals and bioproducts. The DOE seeks projects that can rapidly move to commercial scale and are supported by a sound business strategy. Projects will test key refining processes and provide operational data. The DOE encourages applications that demonstrate breakthrough technologies and collaboration among industry, universities and the DOE's national laboratories. A minimum of 50 percent of the project cost must come from applicants.

Up to $15 million is expected to be available in fiscal year 2007 with the remaining $185 million expected to be available in fiscal year 2008 to 2011, subject to appropriation from Congress. The small-scale grants complement an announcement earlier this year for up to $385 million handed out over four years for the development of six full-scale cellulosic ethanol plants.

The DOE also announced its Notice of Proposed Rulemaking for a loan guarantee program. At press time, the proposed rules were published in the Federal Register and open for public comment for 45 days. The loan guarantee program was authorized in the Energy Policy Act of 2005 and funded for up to $4 billion in loans for fiscal year 2007. The DOE requested $9 billion in loan guarantee authority in the 2008 budget.

The DOE seeks a broad portfolio of large and small projects from a wide variety of technologies. Within the 2008 budget request, the DOE proposed to guarantee $4 billion in loans for projects promoting biofuels and clean transportation fuels, $4 billion in loans for central power generation facilities like nuclear facilities or carbon-sequestration-optimized coal power plants, and $1 billion in loans for projects using new technologies for electric transmission facilities or renewable power generation systems.

The DOE received 143 pre-applications requesting more than $27 billion in loan guarantees. Biomass technologies represented half of the technologies in the pre-applications.