Scary times for U.S. Department of Energy loan guarantee recipients. Energy storage company Beacon Power, which received $56 million from the federal program since 2009, has reportedly filed for bankruptcy protection.
Beacon Power, makers a flywheel technology to store and supply energy to the grid, will continue to maintain operations and plans to first pay off loans to the government. This is in contrast to fellow DOE loan guarantee Solyndra, whose solar manufacturing facilities were abruptly shutdown several weeks ago.
According to a Bloomberg report, Beacon Power CEO William Capp listed several factors restricting growth for the company. "The current economic and political climate, the financing terms mandated by DOE, and Beacon's recent delisting notice from Nasdaq have together severely restricted Beacon's access to additional investments through the equity markets," Capp wrote.
Flywheel technology is used to stabilize the power grid in the event of an emergency outage or as a way to integrate intermittent energy sources such as solar and wind. Commonly, the storage technology is used by data centers to guarantee uninterrupted power supply.
Despite widespread criticism of the DOE loan guarantee program -- and ties to alternative forms of energy -- some analysts maintain a positive outlook on discretionary forms of federal funding.
"Like Evergreen Solar and Solyndra, Beacon Power is another example of the risks the federal government faces when it encourages specific technologies, rather than categories of spending," said Paul Baier, VP of Sustainability Consulting at Groom Energy and a regular GreenBiz contributor. "Better programs aim at technology-agnostic tax incentives for renewables or energy efficiency. The EPAct 2005 program is a good example of this."
In August of 2010, Beacon Power received a $43 million loan guarantee to build and commercially deploy a 20MW flywheel energy storage plant in Stephentown, N.Y. The storage plant was built to stabilize the grid and integrate renewable energy sources, like solar and wind.
While flywheel and ultracapacitor technologies hold some promise for energy storage efficiencies, a significant challenge remains in lowering costs to fund, operate, and deploy grid-level storage systems.
Photo courtesy of Beacon Power.