MOU Announced between U.S. Department of Energy and New York State Energy Research and Development Authority to Accelerate Clean Energy Financing
Memorandum of Understanding Will Allow New York State to Leverage the DOE Loan Programs Office Financing for Large-Scale Renewable Energy Projects
September 28, 2023
Governor Kathy Hochul today announced a Memorandum of Understanding between the U.S. Department of Energy and the New York State Energy Research and Development Authority to facilitate clean energy financing for large-scale renewable projects. The MOU will allow New York State to leverage the DOE Loan Programs Office and strengthen the cooperation between Federal and State energy departments, supporting New York's goal to obtain 70 percent of the state's electricity from renewable sources by 2030.
"To ensure New York achieves a zero-emissions grid, the financing process for clean energy projects must be streamlined,” Governor Hochul said. “This new partnership between New York State and the U.S. Department of Energy illustrates a shared belief among New York and Federal leaders that time is of the essence. We must pave a clear path forward for clean energy.”
Within the bounds of this new partnership, NYSERDA and DOE have defined a process to facilitate the review of applications from utility scale solar, onshore, and offshore wind clean energy projects applying for financing through the LPO. This would include projects already under contract with NYSERDA, as well as those that will contract with NYSERDA in the future.
Under the Title 17 Loan Guarantee Program, LPO may, subject to obtaining required credit approvals, provide financing to eligible projects for up to 80 percent of eligible project costs, with a tenor dependent on project needs and expected asset life, and in any event, not exceeding 30 years.
This partnership will enable clean energy projects in New York to access alternative financing options considering the current inflationary and high interest rate environment. Any cost savings that could benefit projects from accessing LPO loans could be shared with New York State ratepayers and potentially enable billions of dollars in savings.
New York State Energy and Research Development Authority President and CEO Doreen M. Harris said, “This partnership highlights the power of federal and state collaboration as we work toward achieving key climate goals. Together, DOE and NYSERDA are charting a viable pathway for federal programs to help reduce overall costs for New York’s ratepayers in deploying these clean energy projects.”
U.S. Senate Majority Leader Charles Schumer said, “Powered by the Inflation Reduction Act, this new partnership between the DOE and NYSERDA will help further accelerate clean energy technology and infrastructure projects across the Empire State. When I passed the Inflation Reduction Act last year, delivering major federal investment to support NY’s growing clean energy economy while protecting our environment was at the forefront of my mind. I commend Governor Hochul for her efforts to accelerate clean energy financing across the state as a way to take advantage of this major infusion of federal funding, and I am proud to help lay the foundation for a brighter future for our NY economy and jobs in communities across the state.”
Representative Paul Tonko said, “Today’s announcement between DOE and NYSERDA will further enable our state to accelerate toward a clean energy future. During my time in Congress, I have been proud to help lead the fight to increase funding and expand authorities for DOE’s Loan Programs Office, enabling partnerships like this one. I remain committed to driving federal action that will allow New York to continue leading the nation in energy innovation, clean energy job creation, and pollution reduction.”
About the Loan Programs Office Title 17 Clean Energy Financing Program
Under the Title 17 Clean Energy Financing Program, LPO can finance projects in the United States that support clean energy deployment and energy infrastructure reinvestment to reduce greenhouse gas emissions and air pollution. Title 17 was created by the Energy Policy Act of 2005 and has since been amended, most recently by the Infrastructure Investment and Jobs Act in 2021 and the Inflation Reduction Act in 2022. The legislation expanded the scope of Title 17 to include certain state-supported projects and projects that reinvest in legacy energy infrastructure, and it leverages additional loan authority and funding available for projects involving innovative energy technologies.
There are four project categories within the Title 17 Clean Energy Financing Program:
- Innovative Energy : Financing for projects that deploy New or Significantly Improved Technology that is technically proven but not yet widely commercialized in the United States.
- Innovative Supply Chain : Financing for projects that employ a New or Significantly Improved Technology in the manufacturing process for a qualifying clean energy technology or for projects that manufacture a New or Significantly Improved Technology.
- State Energy Financing Institution (SEFI)-Supported : Financing for projects that support deployment of qualifying clean energy technology and receive meaningful financial support or credit enhancements from an entity within a state agency or financing authority.
- Energy Infrastructure Reinvestment (EIR) : Financing for projects that retool, repower, repurpose, or replace energy infrastructure that has ceased operations or upgrade operating energy infrastructure to avoid, reduce, utilize, or sequester air pollutants or greenhouse gas emissions.
New York State's Nation-Leading Climate Plan
New York State's nation-leading climate agenda calls for an orderly and just transition that creates family-sustaining jobs, continues to foster a green economy across all sectors and ensures that at least 35%, with a goal of 40%, of the benefits of clean energy investments are directed to disadvantaged communities. Guided by some of the nation’s most aggressive climate and clean energy initiatives, New York is on a path to achieving a zero-emission electricity sector by 2040, including 70% renewable energy generation by 2030, and economywide carbon neutrality by mid-century. A cornerstone of this transition is New York's unprecedented clean energy investments, including more than $35 billion in 120 large-scale renewable and transmission projects across the state, $6.8 billion to reduce building emissions, $3.3 billion to scale up solar, more than $1 billion for clean transportation initiatives, and over $2 billion in NY Green Bank commitments. These and other investments are supporting more than 165,000 jobs in New York’s clean energy sector in 2021 and over 3,000% growth in the distributed solar sector since 2011. To reduce greenhouse gas emissions and improve air quality, New York also adopted zero-emission vehicle regulations, including requiring all new passenger cars and light-duty trucks sold in the State be zero emission by 2035. Partnerships are continuing to advance New York’s climate action with nearly 400 registered and more than 100 certified Climate Smart Communities, nearly 500 Clean Energy Communities, and the State’s largest community air monitoring initiative in 10 disadvantaged communities across the state to help target air pollution and combat climate change.
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