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Publication

June 3, 2009Client Alert

U.S. Department of Energy to Make $256 Million Available for Commercial Energy Efficiency Initiatives

U.S. Department of Energy Secretary Steven Chu announced on June 1, 2009 plans to provide a total of $256 million from the American Recovery and Reinvestment Act (the “Act”) to support commercial energy efficiency initiatives.

The first of these is a funding opportunity announcement (with reference number DE-FOA-0000044, the “FOA”) of a total of $156 million for competitive grants, the applications for which are due by July 14, 2009 at 8:00 p.m. Eastern. Awards are to be made as follows:

  • Combined Heat and Power. Grants of at least $1,000,000 each for the deployment of commercially available combined heat and power (“CHP”) technologies at a single installation or installations at multiple sites. CHP, as defined in the FOA, is the generation of electric energy and heat in a single, integrated system, with an overall thermal efficiency of 60% or greater on a higher-heating-value basis. As stated in the FOA, the replacement of an inefficient existing system should have at least a 25% efficiency increase when compared to the system being replaced.

  • District Energy Systems. Grants of at least $10,000,000 each for the deployment of commercially available district energy system technologies at a single installation or installations at multiple sites. The FOA defines “district energy systems” as systems providing thermal energy from a renewable energy source, thermal energy source, or highly efficient technology to more than one (1) building or fixed energy-consuming use from one (1) or more thermal-energy production facilities through pipes or other means to provide space heating, space conditioning, hot water, steam, compression, process energy, or other end uses for that energy. New systems should have a minimum efficiency of 60%, and the replacement of an inefficient existing system should have at least a 60% overall system efficiency and represent at least a 25% efficiency increase when compared to the system being replaced.

  • Waste Energy Recovery Systems. Grants of at least $500,000 each for the deployment of commercially available waste energy recovery technologies at a single installation or installations at multiple sites. “Waste energy recovery,” as defined in the FOA, is the collection and reuse of energy from sources such as exhaust heat or flared gas from any industrial process, waste gas or industrial tail gas that would otherwise be flared, incinerated, or vented, and a pressure drop in any gas, excluding any pressure drop to a condenser that subsequently vents the resulting heat. As stated in the FOA, new systems should have a minimum efficiency of 30%, and the replacement of an inefficient existing system should have at least a 30% overall system efficiency and represent at least a 25% efficiency increase when compared to the system being replaced.

  • Efficient Industrial Equipment. Grants of at least $10,000,000 each for the deployment into the industrial sector of efficient industrial equipment in the form of any proven, commercially available technology or systems that have a minimum efficiency improvement of 25%. The bundling of multiple projects within a single application is required, and the value of the project should exceed $10,000,000.

Please note that the FOA advises applicants who are not registered with the Central Contractor Registration (“CCR”) (http://www.ccr.gov/) and FedConnect (http://www.fedconnect.net) to allow at least ten (10) days to do so, which may include (if necessary for the applicant) obtaining a Dun and Bradstreet Data Universal Numbering System (DUNS) number (http://fedgov.dnb.com/webform).

Improved Energy Efficiency for Information and Communication Technology

While the details of other funding opportunities described in Secretary Chu’s June 1, 2009 announcement are not yet posted on fedconnect.net, the Secretary stated that $50 million will be made available for research, development and demonstration projects to promote new technologies that improve energy efficiency in the information and communication technology sector such as controlling the power usage of microprocessors or servers and their supporting power and cooling systems.

Advanced Materials in Support for Advanced Clean Energy Technologies and Energy-Intensive Processes

An additional $50 million will be made available for research, development and demonstration projects for advanced industrial materials that can be used in fuel flexibility programs, combined heat and power technologies, energy intensive processes, and nanomaterials and nanomanufacturing. The Secretary’s announcement stated that these projects are expected to help the American industrial sector increase competitiveness, while rapidly introducing advanced technologies.

This client alert is one of a series designed to provide summaries of the Act and information and guidance regarding opportunities and relief made available through the Act. All of the Act client alerts are available on Michael Best's Stimulus and Economic Recovery Team publications page. For additional information on this topic, please feel free to contact one of the authors of this alert, or your Michael Best attorney.

If you are interested in learning about other provisions included in the Act, the Michael Best Stimulus and Economic Recovery Team is prepared to assist you in understanding the implications and in developing and implementing a strategy to secure the benefits of this unprecedented legislation. Specifically, we will assist you to identify opportunities, prepare appropriate proposals and make targeted contacts to secure funds. We will also work with you to ensure that your applications are tailored to meet your needs and that your funded projects proceed in compliance with award requirements and applicable laws.

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