First round of renewable energy grants announced

The Department of Energy and the Treasury Department announced Tuesday the recipients of the first round of Recovery Act funding aimed at temporarily replacing the languishing renewable energy production tax credit (PTC). Twelve projects will receive a total of $502.6 million in funding for this first round. The program is expected to provide more than $3 billion in financial support for clean energy projects.

In essence, the grants are upfront payments of the Production Tax Credit, thereby giving companies the operating capital they need to build wind farms and other renewable installations— capital that has been difficult to squeeze from the tight credit markets.

Created under Section 1603 of the Recovery Act, the program is expected to provide more than $3 billion in financial support for clean energy projects. Tuesday's announcement was the first of what will likely be several such announcements in the coming months.

“These grants will help America's businesses launch clean energy projects, putting Americans back to work in good construction and manufacturing jobs," said Energy Secretary Stephen Chu, adding, "The initiative will help double our renewable energy capacity over the next few years and make sure America leads the world in creating the clean energy economy of the future.”

Wind industry gets much needed boost

The big winner on Tuesday was the wind energy industry, and more specifically, Spanish renewable energy giant, Iberdrola Renewables. Of the twelve projects receiving funding, ten were wind farms; of those ten wind farms, five are being developed by Iberdrola, accounting for nearly two-thirds ($296 million) of the $502 million in grants announced on Tuesday.

Like the other wind projects receiving the 30% investment grant, Iberdrola will be receiving the grants in lieu of the PTC tax benefit it otherwise would be claiming for the projects.

But company officials hope the federal tap hasn't run out for Iberdrola as it has several more projects in the grant application pipeline.

“We hope to get another $251 million soon,” said Jan Johnson, a company spokeswoman for Iberdrola Renewables, at Green Inc. “The public policy that’s in place now has certainly been a big factor in our business planning in the United States.”

And much of that public policy has been shaped by the leading wind industry group, the American Wind Energy Association, which applauded the much-needed boost for the industry.

“For these grantees and many other projects that are preparing their applications, we are seeing business activity picking up and turbine and parts orders being sent all the way up the value chain,” said American Wind Energy Association Senior Vice President for Public Policy Rob Gramlich.

“That activity had all but dried up and it is very encouraging to see this turnaround underway. Time will tell if that market signal is strong enough to keep the 85,000 people working in the wind industry employed for the next couple of years," Gramlich added.

The administration says that more than 2,000 Americans will have access to jobs in the renewable energy industry—both in construction and in manufacturing—as a result of this first round of funding.

Follow Tim Hurst on twitter