U.S. Department of Energy Announces Loan Guarantee for Desert Solar Project
Obama Admin approved $1bn in green energy loans
Following the doomed Solyndra project, the U.S. Department of Energy announced it will grant a $737 million loan guarantee to SolarReserve to construct a giant solar power plant in Tonopah, Nevada.
The loan agreement is raising fresh concerns about the allocation of taxpayers' money as large sums are invested in technology similar to that of the doomed energy project.
The debate over the effectiveness of solar energy as a major power source has been intensified by the investment.
According got the Daily Mail, The SolarReserve project is backed by an energy investment fund where the Minority Leader's brother-in-law Ronald Pelosi is a board member.
PCG Clean Energy & Technology Fund (East) LLC is listed as one of the investors in the project that has been given the staggering loan guarantee, which even dwarfs that given to failed company Solyndra.
Other investors include one of the major investors in Solyndra, which is run by one of the directors of Solyndra.
Steve Mitchell, who served on the board of directors at the bankrupt energy company, is also managing director of Argonaut Private Equity, which has invested in the latest project.
Since Solyndra has filed for bankruptcy has been asked to testify about the goings on at the firm by two members of the House and 'asked to provide documents to Congress'.
The artist's impression shows the incredible size of the giant solar power plant, which is being bankrolled by President Obama's green jobs fund.
Energy will be generated using concentrated solar power technology, in which a series of mirrors direct sunlight to a receiver at the center of the plant.
The 'solar tower' in the middle, which will be taller than the Washington Monument, is the first of its kind to be built.
Stretching out across a plain in Tonopah, Nevada, the mind-bogglingly big project will generate enough electricity to power 43,000 homes.
But the joint announcement by Energy Secretary Steven Chu comes just two days after the doomed Solyndra project, which cost the taxpayer $528 million from the same cash pot, was meant to be completed.
The project approval came as part of $1 billion in new loans to green energy companies yesterday.
Republican critics of President Obama's solar energy program have voiced their outrage at the new loans while the Solyndra scandal is still being investigated.
They have raised concerns that the Department of Energy is rushing through the approval of loans before stimulus funds expire on Friday.
While the departments insist the projects are being properly vetted, some lawmakers have written to express concern that the vast loans are not being adequately scrutinized.
'The administration’s flagship project Solyndra is bankrupt and being investigated by the FBI, the promised jobs never materialized, and now the Department of Energy is preparing to rush out nearly $5 billion in loans in the final 48 hours before stimulus funds expire — that’s nearly $105 million every hour that must be finalized until the deadline,' said Florida representative Cliff Stearns, who is chairman of the investigations subcommittee of the House Committee on Energy and Commerce.
Tom Schatz, president of Washington-based advocacy group Citizens Against Government Waste, said: 'It is time for a full audit of their activities, their management, and their results.
'Candidly, it might be time for the federal government to rethink the whole idea of loan programs.'
Energy Department spokesman Damien LaVera said the project, which was had extensive reviews that included scrutiny of the parent companies' finances.
Mr. Chu said the two projects will create about 900 construction jobs and at least 52 permanent jobs.
He added: 'If we want to be a player in the global clean energy race, we must continue to invest in innovative technologies that enable commercial-scale deployment of clean, renewable power like solar.'
The 110-megawatt Crescent Dunes project will use the sun’s heat to create steam that drives a turbine, SolarReserve, which is based in Santa Monica, California.
Senate Majority Leader Harry Reid is a strong supporter of the Nevada project, which he says will help his state's economy recover. Former Governor Jim Gibbons, a Republican, also supported the project.
Mr. Pelosi is one of several controversial figures set to benefit from the huge loan agreement.
The loan approvals came just two days before the renewable energy loan program approved under the 2009 economic stimulus law is set to expire. At least seven projects worth more than $5 billion are also waiting to be approved.
California-based solar panel maker Solyndra Inc went bankrupt after receiving its money and laid off 1,100 workers. The firm is now under investigation by the FBI.
It was the first renewable-energy company to receive a loan guarantee under a stimulus-law program to encourage green energy and was frequently touted by the Obama administration as a model.
President Barack Obama visited the company's Silicon Valley headquarters last year, and Vice President Joe Biden spoke by satellite at its groundbreaking ceremony.
Since then, the company's failure has become an embarrassment for Obama.
Nut Scott Crider, a spokesman for Sempra Generation, a Sempra Energy subsidiary that is developing the Arizona project, said its loan guarantee was not as risky as the Solyndra loan.
Most important, the project has a 20-year agreement with Pacific Gas & Electric Co. to buy power supplied by the solar plant, he said
Mr. Crider claimed the purchase agreement is a key element of the project and will 'provide assurance that there are sufficient revenues in place to support the loan guarantee'.
A similar agreement is in place in Nevada. NV Energy, the state's largest electric utility, has agreed to buy power from the Tonopah tower, which will connect to NV Energy's power grid.
UPDATE: This article has been amended since first publication to remove allegations that Nancy Pelosi's brother-in-law was given $737m of taxpayers' money. We are happy to clarify that the money was in the form of a loan guarantee from the U.S. Department of Energy, and that Mr Pelosi did not have a personal financial stake in the outcome.