A proposal by U.S. Senators Jeff Bingaman (D-N.M.) and Lisa Murkowski (R-Alaska) for a clean energy bank would not protect taxpayers, guarantee support for the most cost-effective technologies, or allow for proper congressional oversight, according to the Union of Concerned Scientists (UCS).
The proposal is included in a bill approved last year by the Senate Energy and Natural Resources Committee called the American Clean Energy Leadership Act.
The proposed clean energy bank, called the Clean Energy Deployment Administration (CEDA), would offer a range of unlimited financing options, including direct loans, letters of credit, loan guarantees and insurance for energy production, transmission and storage projects, emphasizing “breakthrough” technologies that would reduce global warming emissions and energy consumption. Renewable energy, advanced nuclear, and coal carbon capture and storage projects all would qualify for assistance.
UCS urged the Senate to include protections that would limit taxpayer exposure to unnecessary and potentially unlimited risk. For more details, see the UCS fact sheet, “The Senate Must Fix the Clean Energy Deployment Administration.”
“The federal government has an important role to play ensuring the availability of financing to help innovative, low-carbon technologies cross the ‘valley of death’ so that they can be deployed on a large scale and become commercially viable,” said Ellen Vancko, UCS’s nuclear energy and climate change project manager. “While a federal clean energy bank would help to reduce financing risks for initial deployment of such innovative technologies, a new loan guarantee program should not be used to fund mature industries.”
The new reactors the nuclear industry is planning to build are based on designs that are largely unchanged from those in already in commercial operation, UCS said. Those plants are already on the short list for billions of dollars in loan guarantees under the existing Department of Energy (DOE) loan guarantee program.
The Senate CEDA proposal would put taxpayers at even greater risk than the current DOE program by promoting large-scale investment in technologies that have inherently higher financial risks and costs than many other low-carbon options, UCS said.
For example, the Congressional Budget Office estimated the proposal would provide $130 billion in loan guarantees to nuclear and fossil fuel energy projects based on current applications. That would allow high-cost, high-risk, and environmentally destructive technologies to monopolize the fund and crowd out investment in truly innovative, clean energy technologies.
UCS urges the Senate to modify the CEDA proposal to protect taxpayers and ensure that funding targets truly innovative clean energy technologies that have the potential to reduce the most global warming emissions at the lowest possible cost.
UCS urged the Senate to:
- Limit the overall size of the fund as well as the amount of credit support that can go to any one technology.
- Subject CEDA to the Federal Credit Reform Act to ensure ongoing congressional oversight and budget authority.
- Prioritize financial support for technologies that will reduce the most greenhouse gas emissions per dollar invested.
- Limit loan guarantees to help the private sector deploy emerging clean energy technologies on a large scale and enable those technologies to become commercially viable.
“Without these protections, the potential financial risk to taxpayers would be astronomical,” Vancko said.
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Read the Politico report at the link below.
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