Latest news with #EnergyDominanceFinancing
E&E News
7 days ago
- Business
- E&E News
Nuclear's next act hinges on DOE loan office
Nuclear supporters want the Trump administration to underwrite a bevy of projects to kickstart a renaissance for the sector. Top Trump officials, like Energy Secretary Chris Wright, say they're on board. But the Department of Energy is slow-walking new loans across the energy industry and losing staff at its Loan Programs Office who could be pivotal for advancing the loans. Advertisement 'Continued investment in the LPO will be key to advancing the next generation of nuclear technologies, developing a cleaner and more resilient electric grid, and securing our nation's energy dominance goals,' said Michael Flannigan, vice president of governmental affairs at the Nuclear Energy Institute. 'The $1 billion appropriated for the LPO in the reconciliation bill reinforces its integral role,' he added. July's One Big Beautiful Bill Act replaced the LPO's previous energy infrastructure reinvestment program with a new Energy Dominance Financing mechanism. It broadens the scope of eligible projects to include those related to critical minerals and emphasizes grid reliability, while potentially excluding some previous greenhouse gas emission reduction projects. For nuclear energy, this could mean a clearer pathway to financing through a new eligibility category specifically supporting projects that enhance grid reliability, directly benefiting nonintermittent and baseload power sources like advanced nuclear reactors. But the expanded eligibility may also shrink nuclear's slice of the pie, according to Matt Bowen and Ashley Finan of Columbia University's Center on Global Energy Policy. 'The broadening of the LPO's authority to support fossil and critical minerals projects could limit the commitment authority available for nuclear energy if many fossil and mineral projects are supported,' the pair wrote in July. The LPO has been pivotal in supporting groundbreaking energy technologies, including financing Tesla's first factory. But many in the industry view it as particularly indispensable for nuclear power. 'The important contributions of the DOE Loan Programs Office are fundamental to getting reactors off the ground,' Dan Lipman, president of energy systems at nuclear developer Westinghouse, said at a July panel on the nuclear resurgence. So far under the Trump administration, DOE has been reluctant to sign off on new loans. Utilities across the country, for example, are angling for more than $20 billion in loans tentatively approved under former President Joe Biden to modernize the grid and add new clean energy. Last month, DOE canceled a tentatively approved loan for the Grain Belt Express, a transmission line that aimed to ferry wind and solar energy from the Great Plains to urban centers in the eastern U.S. But the LPO has continued to disburse loan installments as part of a $1.5 billion loan guarantee to support the restart of the Palisades nuclear plant in Michigan, expected to be completed this fall. The office backed Georgia's Vogtle Units 3 and 4 with loans in 2010 and 2019 totaling $12 billion — more than one-third of the expansion project's ultimate price tag. On Tuesday, Wright said on X that nuclear power 'is the single biggest issue' he works on. While the industry broadly backs the LPO, some argue its broad mandate creates challenges for efficiently financing novel projects. 'It is not the easiest entity to work with, but it's getting a lot better,' said Jacob DeWitte, CEO of advanced nuclear startup Oklo. 'A nuclear project does have different dynamics than like a solar project,' DeWitte continued, adding that the LPO was designed to support large conventional reactors rather than small modular designs that aim for mass production. He suggested that providing a package loan to support several projects from a given company would probably be more efficient for Oklo and other developers. 'Being able to find answers to those things and be iterative, that was an area where we've seen continued improvement, but there's still continued opportunity,' DeWitte said. Concern over risk and financing is shared by some of the nation's largest utilities. Harry Sedaris, CEO of Duke Energy — which operates one of the largest nuclear fleets in the U.S. — told analysts that while nuclear 'has a lot of promise in the future,' there are still serious hurdles to address before the company moves forward with new projects. He pointed to the need for clearer answers on design, supply chain and workforce challenges, as well as the 'first-of-a-kind risk' tied to advanced reactors. 'We're also going to have to have overrun protection from the federal government or others to be able to protect our customers and our investors,' Sedaris said. Until then, he added, Duke is focused on solar, natural gas and optimizing its existing power plants. To that end, a January report from EFI Foundation and Pillsbury Winthrop Shaw Pittman concluded that reforms to the LPO were needed: 'Reforms to the LPO process are necessary to facilitate timely and efficient support for advanced nuclear projects, including streamlined application processes and increased program staffing.' Yet paradoxically, the Trump administration is lauding the office as a cornerstone of nuclear deployment goals at the same time that it is reportedly overseeing mass departures. The Washington Examiner reported in April that approximately 123 out of 210 employees took the deferred resignation offer. Meanwhile, an internal document viewed by POLITICO's E&E News in July showed DOE was considering LPO hiring caps of 125 to 140 full-time employees and 70 to 60 contractors by fiscal 2028. The department had 412 federal and contractor employees at the end of 2024, including part-time workers, according to the Government Accountability Office. 'A slowdown at LPO would be a disaster for nuclear energy, to be quite frank,' Katy Huff, former assistant secretary for nuclear energy under President Joe Biden, said. 'Commercial banks are not going to provide low-cost financing for nuclear reactor construction — especially initial investments in these technologies. It has to be the LPO.' E&E News has not independently confirmed expected LPO staff departures. DOE wrote in an email: 'We do not have final numbers to share at this time. The Energy Department's Loan Programs Office remains ready to deliver on President Trump's energy dominance agenda and help bring about the next American nuclear renaissance.' When asked about the reported resignations at a May panel, Alex Fitzsimmons, then-chief of staff for Energy Secretary Chris Wright, said: 'We have to be able to do more with less. I think we will get to a place where we evolve. We will have a right-sized office. The Loan Programs Office grew quite considerably in the last four years.' But the reports of dramatic staff reductions have raised alarms with some about the LPO's capacity to oversee its considerable financial obligations. 'The LPO was already doing so much oversight — review, audit, control management of deliverables. It takes humans to protect the billions backed by LPO loan guarantees. You cut staff in half, and those government employees cannot reasonably manage that scale,' Huff said. Reporter Jeffrey Tomich contributed.
Axios
23-06-2025
- Business
- Axios
Public-lands sales, faster permitting included in Senate GOP plan
Senate Republicans unveiled reconciliation details on Wednesday proposing public lands sales, steep cuts to Energy Department funding and sped-up permitting for companies willing to pay a fee. Why it matters: The Energy and Natural Resources Committee text is mostly in agreement with House's cuts but sets up a intraparty clash over land sales. Driving the news: The committee text would direct the Bureau of Land Management to sell 0.5% to 0.75% of certain BLM lands and the Forest Service to sell 0.5% to 0.75% of its property across 11 states. It proposes $660 million until September 2028 for a new "Energy Dominance Financing" program. That program would make loan guarantees to ''retool, repower, repurpose, or replace energy infrastructure" that's no longer in operation as well as "enable operating energy infrastructure," the bill says. The Senate also would repeal the DOE Loan Program Office's Energy Infrastructure Reinvestment Financing program that the IRA set up. The House bill advanced last month simply rescinded any unobligated IRA money for the LPO. What's inside: The ENR text proposes taking back unobligated IRA dollars, including for the financing of large transmission projects and grants for clean manufacturing and vehicle technology. Like the House version, the bill would allow companies that pay a $1 million fee to receive automatic approval to export liquefied natural gas to non-free trade agreement countries. FERC would retain its authority to issues permits for LNG facilities.
