Hand Up vs. Hand Out: New government programs target biofuels for support in US, Canada
When is a government program a hand-up, when is it a hand-out?
What kinds of support in financing, knowledge-sharing and R&D do fledgling biobased technologies need.
4 new or improved programs in United States and Canada attempt to fill the gaps between good ideas and good commercial businesses.
One of the all-time best Reaganisms was: “The nine most terrifying words in the English language are: I’m from the government and I’m here to help.” It’s right up there with “a government bureau is the nearest thing to eternal life we’ll ever see on this earth.”
Of course, it’s bemusing to recall that the Reagan Revolution was launched in so many ways at the 1980 Republican Convention in Detroit, when Reagan in his acceptance speech pledged “to restore to the federal government the capacity to do the people’s work without dominating their lives,” just 8 months after the Detroit economy received a massive boost in the form of the 1979 Chrysler loan guarantee.
Coincidentally, it was in that speech that Reagan added that “America must get to work producing more energy.”
So, in the effort to produce more energy and to spark more innovation by investing in internal improvements such as bioenergy infrastructure, let’s turn to the opportunities with loan guarantees.
The USDA Loan Guarantee Program
As most know, the US Government in the past few days re-opened for business, and there’s an attractive USDA Loan Guarantee program recently unveiled that aspiring bioeconomy projects definitely will want to take a look at.
You might ask yourself — of all those loan guarantee projects announced in recent years, how many of them are nearing commercial operation? Sapphire Energy landed one, completed its demonstration-scale Green Crude Farm, and paid off its loan. Good stuff.
INEOS Bio landed a USDA loan, and is now operating its 8 million gallon small-scale commercial facility in Vero Beach, FL. Myriant successfully worked with a smaller loan guarantee out of the USDA”s B&I program. Other than that — to date, slim pickins.
But wait, there’s more by way of support. On October 2nd, the notice of funding availability appeared in the Federal Register, here. The Notice announces approximately $76 million in carry over budget authority that will support a program level of approximately $181 million.
Time is relatively short, given the hoops to pass through.
The original complete application must be received by the USDA Rural Development National Office no later than 4:30 p.m. local time by January 30, 2014, regardless of the postmark date, in order to be considered for program funds.
Accordingly, we asked Westar’s Cindy Thyfault for her list of the “4 Most Important things” in securing a loan guarantee. She writes:
“Due to the size of the loan guarantee program ($181 million total), the USDA experience with prior projects (that they haven’t been able or willing to fund) and the projects with the best chance if success will be those projects that have:
1. Lower loan values – $50 to $80 million maximum.
2. Have equity in hand (35-50%) and can prove that it is already raised and in the bank.
3. Have an integrated demonstration facility that has been running for at least 120 days continuously in operation. This is an area that I see many projects can’t qualify, the USDA has let companies complete the integrated demo test after the conditional commitment phase as a condition of financing, but the process has taken a very long time. They are more inclined to score projects a lot higher if they have completed this step.
4. Have strong feedstock and offtake contracts in place for at least 5-10 years.
5. It is really important that companies have an experienced firm complete the feasibility study, they have an experienced independent engineer report, and an experienced lender, and they give everyone time to complete their portion of the information.
How do you work the timelines? Thyfault has kindly shared her “USDA 900 Guaranteed Loan Project Schedule” with us, and with you. You can download it free, here.
Follow-up questions to Cindy Thyfault, here.
Meanwhile, North of the Border, help with R&D
Our cousins north of Frostbite Falls in Canada have been hard at work on their own new program.
The National Research Council of Canada has just launched its Bioenergy Systems for Viable Stationary Applications research program to help industry capitalize on the production of energy from biomass in opening up new markets for the Canadian forestry, agricultural and municipal solid waste sectors.
The NRC bioenergy program will channel a critical mass of expertise into projects to optimize biofuel production and upgrading, and resolve biofuel-power plant compatibility issues, lowering the capital and operating costs for bioenergy systems and components. These activities will be complemented by technical support for codes and standards and techno-economic expertise to help clients from the project design and feasibility stage, to development, integration, testing and demonstration in the field.
NRC is looking to engage companies along the value chain – feedstock suppliers, technology providers, power plant OEMs, systems integrators, utilities and other end users – to develop and deploy integrated solutions for near-term stationary markets where bioenergy is already cost competitive. These markets include remote communities and industrial operations now reliant on expensive diesel fuel, as well as urban communities where the value of municipal solid waste diversion makes the effective cost of biomass negative.
“By connecting feedstock, technology and equipment suppliers with end-users in a large-scale, collaborative research effort, we can address interdependent biofuel production and utilization challenges,” said Andy Reynolds, General Manager of the Energy, Mining and Environment portfolio at the National Research Council of Canada. “This will accelerate deployment in markets where bioenergy is cost-competitive, such as remote communities and industry reliant on expensive diesel fuel, and cities facing high municipal solid waste diversion costs.”
In addition to a core multidisciplinary team of some 40 researchers based in Ottawa, Vancouver and Montreal, clients and collaborators also have ready access to all of NRC’s world class staff and facilities conveniently located at sites across the country, featuring:
Technical advisory services
• Materials science
• Bioprocessing
• Chemical, mechanical and systems engineering
• Electrochemistry
• Modeling and simulation
• Techno-economic assessment
• Codes and standards
Research facilities
• Anaerobic bioprocessing and mobile pilot plants
• Bioengineering and fuel cell laboratories
• Laboratory and pilot scale autoclaves
• Combustion, engine and gas turbine research laboratories and test cells
• Advanced sensors and diagnostic equipment
• Modeling hardware and software
• Material and gas characterization and analysis
Interested parties can contact NRC program leader Jonathan Martin here.
We’re from the government and we are hear to listen: the EPA seeks power plant emissions advice
By the way, EPA is getting into the act as well, via 11 public listening sessions across the country to solicit ideas and input from the public and stakeholders about the best Clean Air Act approaches to reducing carbon pollution from existing power plants. Power plants are the nation’s largest stationary source of carbon pollution, responsible for about one third of all greenhouse gas pollution in the United States.
Not a bad opportunity to tout the opportunities to recycle CO2 via biobased technologies — as plenty of voices will likely be one had to talk up sequestration, output reductiion and low-emission feedstocks such as biomass or natural gas. The agency will seek additional public input during the notice and comment period once it issues a proposal, by June 2014.
The Clean Air Act gives both EPA and states a role in reducing air pollution from power plants that are already in operation. The law directs EPA to establish guidelines, which states use to design their own programs to reduce emissions. Before proposing guidelines, EPA must consider how power plants with a variety of different configurations would be able to reduce carbon pollution in a cost-effective way.
For more information on these sessions and to register online, go here.
We are here from the government and we are here to share knowledge: The DOE’s Bioenergy Knowledge Discovery Framework
The DOE Bioenergy Technologies Office launched its revamped Bioenergy Knowledge Discovery Framework website on September 17 with a completely new look and many features that were added based on user feedback. You can take a look here to see the new look and feel, streamlined layout, and added functionalities.
The KDF supports the development of a sustainable bioenergy industry by providing access to a variety of data sets, publications, and collaboration and mapping tools that support bioenergy research, analysis, and decision making.
In the KDF, users can search for information, contribute data, and use the tools and map interface to synthesize, analyze, and visualize information in a spatially integrated manner.
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