Boston (Platts)--11May2011/440 pm EDT/2040 GMT

The US Department of Energy has notified "dozens" of renewable energy project developers that they likely will not receive loan guarantees under an $800 million program Congress created in the 2009 economic stimulus bill, an agency official said Wednesday.

The department has told the applicants it does not believe their projects are capable of beginning construction by September 30, the date when the so-called Section 1705 program expires.

In a blog posted on DOE's website, Jonathan Silver, director of the agency's loan programs office, said "[i]n light of the impending, statutorily imposed deadline, we expect that all, or nearly all, of the remaining funding will be utilized by a group of other projects already in the pipeline that have the strongest chance of completing all necessary steps' within the next four and a half months."

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In letter sent to applicants still in the running, Silver said that to ensure their projects have "a reasonable prospect of closing" in time applications "will need to be reviewed and recommended for a conditional commitment by our Credit Review Board by June 16."

He told developers whose applications have been placed on hold that their projects may be eligible for funding under a broader loan-guarantee program, known as Section 1703, that received another $170 million under the fiscal 2011 continuing resolution. The Section 1705 program was designed to support cutting-edge reneweable energy projects.

A DOE spokeswoman Wednesday said "dozens" of developers received hold letters and fewer than that were told their applications are still being considered. She said the agency is not releasing the names of the companies that received each letter because the information is "business sensitive."

But Rentech, a Los Angeles-based developer planning a 55-MW biomass project in Florida, said it had been told its application for a Section 1705 loan guarantee is on hold.

The company said it will assess the next steps for developing and financing for the project, including further discussions with the US government and expected to have an announcement in the "coming weeks."

--Housley Carr, newsdesk@platts.com