Beacon Power bankruptcy: NOT “another Solyndra”

Seth Kaplan

The unfortunate news that Beacon Power, an innovative technology company based in Massachusetts,  declared bankruptcy has inspired a bit of a media feeding frenzy centered around analogies to the failed California solar company Solyndra,  because Beacon (like Solyndra) received  a federal loan guarantee.

This analogy simply doesn’t hold up for the following reasons:

  • Beacon Power has a fully operational facility in Stephentown New York that is an operating model of their flywheel technology, a innovative technology that provides an essential service to the electricity grid, providing stability to the power system at a very low cost.  This stability will allow smoother operation of the power grid and allow for integration of many more renewable resources like wind and solar smoothly at a reasonable price.
  • The Federal loan guarantee is structured in a way that protects the financial interests of the taxpayers – giving them the right to be repaid out of the assets of Beacon before other companies and people that are owed money.
  • Unlike Solyndra, which was effectively losing a price competition with Chinese and other US manufacturers, Beacon makes a unique product that is being developed here in the United States.
  • The Federal Energy Regulatory Commission, a mere 11 days ago, issued a detailed rule that requires utilities to compensate companies like Beacon that provide power system stability in a competitive manner.  This sets a clear trajectory for Beacon, and the handful of other companies providing similar services, to be economically successful.

Given the assaults on the environment and climate and continuing economic and social disruptions there is enough bad news out in the world without alarmist voices generating scary stories because of events like the Beacon bankruptcy.   While it is an unfortunate event for some private investors and employees of Beacon it is not a crisis for taxpayers and can and will not stop the development of innovative and important technologies that will be the backbone of a new clean energy economy.

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