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New Energy: The Effects of Regulatory Reforms on the US Department of Energy Loan Guarantee Program

Greg W. Durham
September 2011

Energy, Climate, and Innovation Discussion Paper


durhamThe US Department of Energy initiated the Loan Guarantee Program to promote innovative technologies, but why did it fail to issue a single loan guarantee in its first four years?


What reforms to the Loan Guarantee Program (LGP) were enacted, and to what degree have these reforms reshaped the LGP program?


The US Department of Energy Loan Guarantee Program (LGP) was created in 2005 to assist energy companies in securing financing for projects that deploy innovative energy technologies. However, the legal, regulatory, and administrative challenges put the brakes on progress, and the stagnation generated criticism and doubt regarding the program's potential for success. This study examines the Obama Administration's efforts to reform and administer the LGP program. Looking at both the shortcomings of the program at its origin as well as the impact of measures implemented by the Obama Administration, the paper evaluates the LGP’s ability to attract applicants and issue loan guarantees going forward, and argues that the credit subsidy cost is one of the most significant barriers to success.

Read the complete paper here.

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