(a) (1) In this section the following words have the meanings indicated.
(2) (i) “Renewable fuel” means gaseous, liquid, or solid fuel from any organic matter and its by–products.
(ii) “Renewable fuel” includes fuel from:
1. an agricultural crop, agricultural waste, or agricultural residue;
2. wood, wood waste, or wood residue;
3. animal waste;
4. aquatic plants;
5. sewage or sewage sludge;
6. municipal, industrial, or commercial waste;
7. any mixture of any of these substances with inorganic refuse from a public or private municipal waste collection system or similar disposal system; or
8. any combination of items 1 through 7 of this subparagraph.
(iii) “Renewable fuel” does not include fossil fuel.
(3) “Transportation facility” means a transportation facility that is used exclusively to transport fuel produced by a fuel production facility to:
(i) a storage facility;
(ii) a pipeline connection to an existing pipeline or processing facility; or
(iii) an area near the fuel production facility.
(b) A project qualifies as an energy project if it consists of:
(1) an energy conservation project;
(2) a solar energy project;
(3) the construction of a facility to produce solar energy equipment;
(4) the construction of a facility or portion of a facility to:
(i) produce renewable fuel; and
(ii) burn renewable fuel, or a mixture of renewable fuel with other materials, to generate:
1. heat;
2. mechanical power;
3. electricity, including by cogeneration; or
4. other useful forms of energy;
(5) the conversion of any facility to use renewable fuel;
(6) the expansion or improvement of a facility that increases its capacity or efficiency to use renewable fuel;
(7) the acquisition and improvement of equipment for use in a facility specified in items (4) through (6) of this subsection;
(8) the acquisition or improvement of land for a facility specified in items (4) through (6) of this subsection;
(9) the purchase, construction, or installation of a facility or equipment to use groundwater as a heat source for a heating system or as a heat sink for an air conditioning system;
(10) the purchase, construction, or installation of a facility or equipment to develop and use the natural heat of the earth for direct use or to generate electricity;
(11) the purchase, construction, and installation of a hydroelectric facility at an existing dam that:
(i) uses the water power potential of the dam; and
(ii) has no more than 30 megawatts of installed capacity;
(12) the construction of a fuel production facility for commercial production of a gaseous, liquid, or solid fuel, or of a combination of them, that:
(i) is produced by chemical or physical transformation of coal or mixtures of coal and other materials;
(ii) can be used as a substitute for petroleum or natural gas, or any of their derivatives, including chemical feedstocks; and
(iii) includes only:
1. the fuel production facility, including the equipment, plant, supplies, and other materials associated with the fuel production facility;
2. the land and mineral rights required directly for use in connection with the fuel production facility;
3. any other facility or equipment to be used in the extraction of a mineral for use directly and exclusively in the fuel production facility that is necessary to the project and is:
A. colocated with or located in the immediate vicinity of the fuel production facility; or
B. if not colocated or located in accordance with item A of this item:
I. a coal mine in the case that no other reasonable source of coal is available to the project; or
II. incidental to the project; and
4. any transportation facility, electric power plant, electric transmission line, or other facility that is:
A. for the exclusive use of the project;
B. incidental to the project; and
C. necessary to the project;
(13) the conversion of a facility from using petroleum–based fuel to coal or to a mixture of coal and other materials as a fuel; or
(14) the construction of a facility to burn coal using innovative technology that increases the efficiency of the combustion process.