The original publication of this story was by Guardian and is reproduced here as part of the Climate Desk collaboration.
Deep within the The brutalist, hulking Headquarters of the US Department of Agriculture Energie, down one of its long, starkly lit corridors, sits a small, unheralded office that is poised to play a pivotal role in America’s shift away from fossil fuels and help the world stave off disastrous global heating.
The department’s Office of loan programs This was “essentially dormant” According to Jigar Shah, its head, Trump has brought back a large war chest to finance emerging clean energy projects.
Last year’s vast Inflation Reduction Bill grew the previously moribund office’s loan authority to $140 billion, While adding a new program Additional $250 billion in loan guarantees are available to help retool projects which reduce global warming emissions. Shah, who is a former clean energy entrepreneur, podcast host and debonair man, controls resources that are comparable to Norway’s GDP. All of this to turbocharge solar, wind, and other climate technologies in America.
With a Newly divided Congress stymieing any new climate legislation in the foreseeable future, Shah has emerged as one of Washington’s most powerful figures in the effort to confront global heating. Shah believes such attention on Shah is important. “hyperbolic” The White House has pinned much of its climate agenda upon an office that had only a handful of people when Shah joined it in March 2021. As it scrambles for billions of dollars in loans, the office now employs more than 200 people.
John Podesta is a senior adviser to Joe Biden regarding clean energy. He stated that the loans office was in good shape. “essential to the effective implementation” of the administration’s goal to eliminate planet-heating emissions by 2050. “Jigar is laser-focused on working with all levels of government, project sponsors, and affected communities to deliver on that mission and realize results for the American people,” Podesta stated.
“There’s a lot of responsibility that’s been put on to this office, clearly Congress gave us those additional resources,” Shah said that Shah has been working hard to connect the newly enriched loan office with all corners the emerging clean-energy economy, not just solar operators and wind farms.
Shah claimed that there was “some rust on the gears” One of the people tasked to revive the office after Trump’s tenure was a president who was so wary about even the most basic environmental technology, that he complained of energy efficient lightbulbs He made him look orange And became Fixated Due to the poor flushing power of water-saving toilets.
However, clean energy loans are gaining momentum. 125 applications have been submitted for $119 billion in loans to finance the project. “bridge to bankability,” Shah puts it. A total of $2.5 billion has been spent Given to Ultium Cells to manufacture lithium-ion batteries for electric cars in three states, $700 million has gone to a project that will mine lithium in Nevada—despite Besorgnization this will negatively affect a rare flower in the region—and more than $500 million for the world’s largest facility Create “green” Utah will use hydrogen to fuel industry and trucks.
“We’ve left no stone unturned,” Shah claims he understands entrepreneurs’ mindsets. Founded previously SunEdison Renewable Energy and Generate Capital are the co-hosts of The Energy Gang podcast.
“We’ve called every one of those companies that have been labeled climate tech, whether it’s green chemicals, green cement, green steel,” He said. “It doesn’t matter who it is, we’ve called them and said, ‘Hey, let me introduce you to the loan programs office, so now we can help.’”
The new prominence of the loans office is likely to cause a strong Republican backlash. To conservatives, the loans office, which was founded in 2005, is forever tarred by the much-criticized decision during Barack Obama’s administration to loan $535 million to Solyndra, the California solar firm, only for the company to file for bankruptcy two years later, 2011.
The huge new financial arsenal at the office’s disposal risks “Solyndra on steroids,” According to Cathy McMorris Rodgers (incoming Republican chair of House energy committee), Rodgers is leading a group that includes Republicans and has stated the new loan authorities “raise questions about increased risks of waste, fraud and abuse, especially if the administration uses the program for its rush-to-green agenda.”
Shah, who could well be hauled in front of Rodgers’ committee this year, said GOP scrutiny is “totally ordinary and expected” This is because the loans office has become a maturer entity than it was in the Obama years. It backed an upstart auto company, Tesla, with a $465million loan. The failure rate of 3.3 percent for its loans is about that you’d expect from a prudent bank lender rather than a profligate waster of taxpayer money, Shah points out.
Some level of risk taking will be required if the US is to quickly scale up the sort of clean energy technologies that are regularly devised by Americans but can struggle to get support from investors, Biden’s allies argue. “Shah will pick some winners and some losers, that’s how it works,” Paul Bledsoe (an ex-Clinton White House climate change advisor), is now at the Progressive Policy Institute.
“If you don’t pick any losers you haven’t taken on enough risk of picking a big winner. They key is a to pick a few really big winners and with this office there have been more Teslas than Solyndras, by a long shot.”
Bledsoe stated that the US has not traditionally funneled large sums of public money to commercialize clean energy technology. “right about now we are wishing we did,” China has emerged as the world’s largest economy. Global leader In solar panel, wind turbine, and battery production.
After many years of offshoring these activities, the US now wants to encourage domestic manufacturing with the Inflation Reduction Act incentives. “We have to harden our domestic supply chains because we can’t replace oil-based transportation with critical minerals-based transportation and be dependent on foreign nations when we can process those minerals ourselves,” Bledsoe.
The cost of solar and wind power has risen, but the price is still high. fallen Dramatically over the past decade—to the point new renewable projects are Often, it is cheaper than continuing with existing fossil fuel plants—and electric vehicle sales Boomed There were many causes of the climate crisis that caused global warming last year. That are the tipping points of mass adoption.
Heavy trucking, shipping and aviation that can’t run yet on batteries require a new fuel source, perhaps hydrogen (the Department of Energy is Currently looking for funding to finance clean-running aircraft) that isn’t as polluting as oil. The emissions from industrial processes like steel and cement production are far from zero.
Even if the US completely cleans its electricity grid, it will still need to run thousands of miles. new transmission lines and integrated large-scale batteries to store and distribute the renewable energy to where it’s needed. Meanwhile, the Department of Energy Put billions of dollars into efforts to remove carbon directly from the atmosphere or capture it at source and bury it underground, although this barely scratches the surface – A recent report estimated that 1,300x more CO2 To avoid a 2C increase above pre-industrial temperatures, it is necessary to remove all new technologies from the world by 2050.
John Kerry, the US climate ambassador, is key to all of this. Put it! recently, “money, money, money, money, money, money, money.” Jessica Jewell, a Chalmers University expert on clean energy, stated that solar and wind are both expensive. “has fallen tremendously over the last couple of decades, growth of low-carbon technologies is still not fast enough to reach our climate goals and has yet to make a significant dent in hard-to-abate sectors like industry and transportation.”
“There are many clean energy technologies which are still ‘pre-commercial’ which means they cannot compete without significant support,” Jewell was also added. “Without these technologies, even the growth of wind and solar power may stall or don’t have the required effect on bringing emissions down.”
Shah expressed confidence that major progress is being made in hydrogen fuels, and that this is a positive step. “foregone conclusion” That 100m tonnes of CO2 American industry will capture and place them in the ground because of carbon management investments.
However, he believes there are more things that can be done in nuclear. He recommends the development and use of small modular reactors. Also, advanced geothermal is where steam from underground hot waters is used to power power plants. He frets that the US is short of a million tradespeople to engineer the mass electrification of everything that currently runs on fossil fuels, and that the transmission lines aren’t being built quickly enough.
“I think there’s a lot of work to be done in some of those areas,” Shah said. “When you think about the enormity of the challenges that we’re faced with, that are all prerequisite ingredients to a successful climate deployment, there’s a lot of work to do.”
Shah, now 48, was raised in Gujarat, India and moved to America when he was only one. He now has a seven-year-old son of his own who adds a certain urgency to his father’s work. “He is asking me tougher questions every month—he says, ‘Hey, are you doing enough on these issues? Hey, why is there exhaust coming out of the car in front of me? Why don’t they have an electric car?’ I’m like, ‘We’re working on that,’” Shah said.
Aside from the pressure exerted by Republicans—and his son—Shah also has to grapple with the existential imperative of a ticking climate timebomb. The Last eight years were the most consistently hot on Earth. but they will appear almost frigid in the future if the US, the world’s biggest ever carbon emitter, doesn’t give up its fossil fuel habit.
“You feel that pressure,” Shah said. “I hold myself to outcomes. I don’t hold myself to best efforts. I feel like there’s a lot of people who are like, ‘Well, I gave it my best.’ And I was like ‘Well, I mean, that’This is not enough. You either have reduced climate emissions or you haven’t.’
“And it does weigh on you. I mean, I sleep well at night, I recognize that good sleep is a good thing. But I do put a lot of pressure on myself and my team, because I think we are up to the challenge. And I think that if not us, then who?”