DOE's new grant scrutiny could endanger some energy projects
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The Energy Department revealed it's carefully auditing billions of dollars in Biden-era grant awards. It could spell trouble for some projects.
Why it matters: The news sheds light on an area of intense interest — how and whether DOE will proceed with unprecedented project support amid Trump 2.0's climate policy U-turn.
- Awards under the 2021 infrastructure law and 2022 climate law are provided in tranches based on milestones.
- That gives Trump 2.0 sway over its predecessors' award decisions — as well as openings to apply new types of vetting.
Catch up quick: DOE on Thursday announced case-by-case reviews of grant awards and other aid.
- It's designed to ensure projects are "financially sound and economically viable, aligned with national and economic security interests," and consistent with Trump 2.0 priorities, the announcement states.
- Secretary Chris Wright, in a statement, said money was "rushed out the door" in the late Biden era and that DOE has already found "concerning" info.
What they're saying: Jeff Navin, a partner at clean-tech focused lobbying and advisory firm Boundary Stone Partners, said he's already getting questions from clients about how to prepare for DOE reviews.
- "For some of these newer sectors, there isn't a ton of market data available, some of the assumptions in the analysis could be quite subjective, and it's going to be important that applicants are very diligent in responding to the questions," Navin, a senior Obama-era DOE aide, said via email.
State of play: The agency said it's initially seeking more info on 179 awards totaling over $15 billion.
- It's focused on $8.4 billion in projects approved by DOE's Grid Deployment Office (GDO) and $7.3 billion under the Office of Manufacturing and Energy Supply Chains (MESC), per a tally via Bloomberg and confirmed to Axios by DOE.
Zoom in: A DOE document sent to awardees and viewed by Axios shows many granular questions that together give a sense of department aims.
- For instance, GDO recipients are asked about their projects' effects on reliability, consumer energy costs, and more.
- For MESC projects, it seeks extremely detailed data on financial models, expected rates of return, pitchbooks, board minutes, market analyses and many other things.
- Both categories of recipients get expansive questions about any links to China, Iran, Russia or North Korea (the bucket known as "foreign entities of concern").
"With this process, the Department will ensure we are doing our due diligence, utilizing taxpayer dollars to generate the largest possible benefit to the American people and safeguarding our national security," Wright said in a statement.
Threat level: Bridget Bartol, a senior DOE aide under Biden, said it's normal for a new team to examine existing awards.
- But she added: "This action comes across as though they're struggling to find a legally justifiable way to cancel projects they ideologically disagree with, and the delay tactic approach is getting stale."
- She said awarded projects have been very well-vetted and are aimed at "building a stronger industrial base, increasing electrons across the country and building secure infrastructure."
The bottom line: It's early days, but don't be surprised if some projects don't survive DOE's new vetting.
