Did Doe's Wright receive the message? – Watt?

from masterresource

Kennedy Corn

“Since its founding under Obama in 2009, ARPA-E within the Department of Energy has awarded approximately $4.2 billion in bonuses to approximately 1,700 energy projects. The latest nuclear revival continues a long-term start for a technology that is more promising than performance.”

Energy Secretary Chris Wright and the White House appear to be in conflict with major DOE spending plans, including the agency’s loan program office and main research unit, the Advanced Research Projects Agency – Energy (ARPA-Energy).

Last week, DOE allocated an additional $57.8 billion in federal funds to resurrect the Palisades nuclear power plant in Michigan, part of a $1.52 billion DOE loan that provided the project to Holtec International.

Since Doe's office approved the deal in September last year, the agency has rebooted nearly $96 million for the 805-megawatt reactor that was closed in 2022, up from $38 million since January this year.

The Biden administration, along with two Democratic Michigan Governor Gretchen Whitmer and her former Jennifer Granholm, are also Biden’s energy secretary and are a key part of the driving force behind the Palisades subsidies. Despite this prehistoric history, Wright said: “Today’s action is another step in promoting President Trump’s commitment to boost domestic energy production, strengthen our security and reduce the costs of the American people.”

As the keynote speaker at ARPA-E’s annual “Summit” conference at Maryland Resorts, Wright puts this technology (modeled by the Department of Defense Advanced Research Programs Agency) as crucial in U.S. defense and medical science.

The only way we get there is if we grow the energy system faster and faster, that's why you're all here. There is a huge, life-changing innovation opportunity there.

Since its inception under Obama in 2009, ARPA-E has awarded about $4.2 billion in bonuses to about 1,700 energy projects. The latest nuclear revival continues a long range of beginnings and avenues, a technology that is more promising than performance.

Financial caution?

On January 28, the White House Office of Management and Budget produced a 52-page spreadsheet (obtained by Bloomberg) that lists the targets for spending an axe or Elon Musk chain saw. Among the countless goals: DOE's Loan Program Office and ARPA-E. The next day, a federal judge issued a temporary holding of the cuts, which expired in February. Not cut so far.

The U.S. Department of Energy press release on Palisades funds uses financing as a “loan guarantee,” a term stolen by the federal government and Congress in 2005, suggesting that Uncle Sam is just supporting the private sector currency. The goal is to free up funds to build new nuclear power plants after the decline of the first generation. But these Zoro doesn't want it to look like it risking taxpayer dollars.

This doesn't work – because of the failure of the expensive new Vogtle unit in Georgia and the VC summer project in South Carolina.

A regular loan guarantee defined by Investopedia is a type of loan that a third party agrees to pay if the borrower defaults.” The DOE’s “loan guarantee” is a loan, just like a car loan. The borrower offers a 20% advance payment, while the DOE pays the rest. The loan has been approved by the Treasury Department and is paid by the Treasury Federal Financing Bank, which also collects loan payments.

Under the Federal Regulations, “the entire faith and credit of the United States is intended to pay principal and interest.” If the borrower defaults on principal or interest payments and “such defaults have not been cured within the applicable grace period, the (Financial) Secretary shall notify the Attorney General.”

Political Controversy

Since the collapse of senior solar photovoltaic company Solyndra in 2011, U.S. Department of Energy lenders have come under fire, leaving the Obama administration with a bag containing a $527 million default.

The 2012 Non-Proliferation Policy Education Center’s monograph – Pure Risk: Federal Clean Energy Loan Guarantee – provides a series of criticisms about loan guarantees, especially nuclear power plants. NPEC Executive Director Henry Sokolski wrote in his preface:

The volume focuses on the costs and risks associated with federal clean energy loan guarantees…. They noted that Solyndra's $5 billion has lost US taxpayers.

In 2017, Rep. Randy Weber (R-Texas) and four other hard right-right Conservatives — Mark Meadows of North Carolina, Pete Sessions of Texas, Pete Sessions of Alabama, and Jim Jordan of Ohio — introduced legislation to “modify the Energy Policy Act of 2005 to phase out the Energy Policy Act of 2005 to repeal some of the Department of Energy’s loan guarantee programs for other energy sectors.” It has nowhere to go.

The Heritage Foundation's 2023 book Mandate for Leadership Project 2025 – which Trump disdained during the campaign and has frequently attempted to implement once in office – says the “DOE Loan Program should be eliminated or reformed,” along with a list of other DOE subsidy programs including the “DOE Office of Clean Energy Demonstrations (OCED); Office of State and Community Energy Programs; ARPA-E; Office of Grid Deployment (OGD).”

Euthanasia of these doe plans will require Congressional action, which is unlikely.

False promises long-term hope

Vaclav smiles [Energy Myths and Realities (AEI Press, 2010)] Nuclear fission has been described as a “successful failure.” On the positive side: “Nuclear fission is a reliable, high-capacity, high-load generation mode, which makes it an ideal complement to a variety of renewable energy conservation models that remain mostly low-capacity, moderate-loading and unpredictable intermittent operation.” However, instead of meeting expectations, he added: “Nuclear power fulfills only a small part of its original commitment.” [1]

Trump 47's Department of Energy needs to consider nuclear policy from scratch.

[1] vaclav smiles, Energy Myth and Reality (Washington, DC: AEI Press, 2010), pp. 42, 40, 32.

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This is a slightly revised version of the original release on the blog website of electricity expert Kennedy Corn. Other posts on Masterresource Corn are here.

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