www.environmental-finance.com/
New York, 22 January:
The economic stimulus package being considered by the US House of Representatives features sizeable investments in clean energy projects and infrastructure that could boost the sector. Backing up President Barack Obama's pledge to double renewable energy production within three years, the House proposed last Thursday an $825 billion package, with $54 billion dedicated to developing the sector and improving US energy efficiency.
The American Recovery and Reinvestment Act of 2009 devotes $11 billion for research and development, pilot projects and federal matching funds to modernise the electricity grid by making it more efficient, secure and reliable, and building new power lines to transmit renewable energy from large-scale production areas to population centres.
"It's really interesting that [Obama] is going for core, high-tech improvements," said Donna Attanasio, a partner in the energy, infrastructure and project finance group of law firm White & Case in Washington, DC. "It's a smart approach. He's really looking at ways to improve the industry and putting some money into it." Despite the funding, major challenges remain to the development of a smart grid, including ensuring that any upgrades are performed in a manner that does not disrupt or damage the grid and securing necessary state approvals, she said.
Loans totalling $8 billion would fund renewable energy power generation and transmission projects, a direct response to the contraction in the credit markets and lower bond ratings that have postponed new projects. In addition, $2 billion would be spent on energy efficiency and renewable energy research, development and deployment projects, including $800 million devoted to biomass projects and $400 million for geothermal activities and projects.
The $54 billion also includes $2.4 billion for carbon capture and sequestration technology demonstration projects that aim to reduce the amount of carbon dioxide emitted from industrial facilities and fossil fuel power plants. "That certainly is a start," said a spokesman for the Edison Electric Institute, an association of US shareholder-owned utilities. "What we'll need ultimately to reach commercialisation of advanced coal is steady funding over several years that is not subject to appropriations."
The full House has yet to consider the bill while the Senate is expected to debate its version over the next few weeks, so the funding figures are likely to change. Congressional leaders hope to have a bill ready for Obama's signature by mid-February. "It's exciting that it's in the economic stimulus package because you know it's going to move," Attanasio said.
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