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