Twelve years ago, the Department of Energy was so central to the incoming Obama administration’s stimulus plans that DOE staffers were among the first through the doors at the transition headquarters, helping the Secret Service take the plastic wrap off tables and chairs so they could get to work.
Now, DOE is poised to again play an essential role as the Biden administration looks to leverage clean energy investments toward its twin goals of pulling the economy out of a deep slump and delivering on the president-elect’s ambitious climate pledges.
And Biden, who oversaw the Obama administration’s stimulus work as vice president, unknowingly left himself a down-payment for the work ahead: $40 billion in unused Energy Department loan authority awarded under the 2009 stimulus. That pot of money could offer a way to kick start his climate and infrastructure plan at a time when a narrowly divided Congress may balk at his call to spend $2 trillion over four years.
The Energy Department will play a key role in helping slash emissions from the transportation sector, the largest contributor to climate change. Electrifying the nation's fleet of vehicles would represent one of the most seismic market and technological upheavals in recent history. And the department will also have a major role to play in stanching emissions from buildings, appliances and the electric power sector.
“This situation does feel eerily reminiscent of what it was like during the Obama administration,” said Sanjay Wagle, who served in Obama’s DOE and now is managing director of investment firm The Lightsmith Group.
DOE's loan program helped a raft of clean energy companies deploy projects across the country during the early Obama years, when it provided financing that helped drive down the cost of solar and wind farms. But it became a political target after solar company Solyndra collapsed, defaulting on more than $500 million in federal loans — even though the overall program recorded an overall default rate of less than 3 percent, far lower than private lenders typically experience, according to a Bipartisan Policy Center analysis.