The federal government has agreed to share some of the financial risk involved in building the world’s largest wind farm in northeast Oregon.
You knew the world’s largest wind farm was coming to Oregon, right?
Today the U.S. Energy Secretary Steven Chu announced “a conditional commitment to provide a partial guarantee”** for a $1.3-billion loan to develop the Caithness Shepherds Flat wind farm – a 338-turbine project being developed on 30 square miles near Arlington.
The U.S. Department of Energy boasts the project will avoid more than 1.2 million tons of carbon dioxide a year – equivalent to more than 200,000 cars.
The loan guarantee comes through the DOE’s Financial Institution Partnership Program, designed to help persuade banks to loan money for renewable energy projects. The 2009 stimulus bill beefed up the program, and it has now guaranteed $15.9 billion in loans to 15 projects – including one for U.S. Geothermal in Malheur County.
Of course, critics say the feds haven’t been giving out guarantees fast enough to meet stimulus bill deadlines. It took nine months for the agency to approve the Shepherd’s Flat application.
The Shepherds Flat project will be capable of generating 845 megawatts of electricity. T. Boone Pickens had threatened to claim the project’s “world’s largest” title nearly as soon as it was secured, but he ditched his plans early this year.
This spring, Shepherds Flat was held up by objections from the Pentagon over possible radar interference with military aircraft. But then, this month, the U.S. Department of Defense gave it the green light.
Developer Caithness Energy LLC has ordered the next generation of General Electric turbines (yet to be seen in the U.S. but already used in Europe and Asia) and signed contracts with utilities. It is expected to create 400 construction jobs and 35 permanent jobs on site. Turbines are scheduled to be installed in 2011 and 2012.
Caithness and General Electric Energy Financial Services have been waiting for this loan guarantee for nine months, and they’re not the only ones the DOE has kept waiting. California’s congressional delegation laid some pressure on the agency to get busy last week. From The Los Angeles Times:
“Last week, Sens. Dianne Feinstein and Barbara Boxer as well as 25 members of the House of Representatives wrote Energy Secretary Steven Chu, urging him to pick up the pace of processing loan guarantee applications.
‘Private investors proposing to put Americans to work building energy infrastructure projects should be turned away on the merits of their applications, not because the federal government failed to give their application due consideration under a reasonable timeline,’ the letter said.
For his part, Salazar said he expected that projects going through the process ‘will in fact be able to meet deadlines’ for breaking ground by Dec. 31.”
DOE’s Financial Institution Partnership Program guarantees up to 80 percent of a loan for a renewable energy project – offering a safeguard in case the developer defaults on the loan.
Here’s what Secretary Chu said in announcing the Shepherds Flat loan guarantee today:
“Thanks to the Recovery Act, we are creating the clean energy jobs of the future while positioning the U.S. as a world leader in the production of renewable energy. This project is part of the Administration’s commitment to doubling our renewable energy generation by 2012 while putting Americans to work in communities across the country.”
**How “partial” is the DOE’s loan guarantee, and what “conditions” is it subject to? Strangely, Secretary Chu did not put the fine print in his press release. I’m waiting for a call back from DOE.