Beacon Power, a Tyngsboro, Massachusetts flywheel energy storage company, is filing for Chapter 11 bankruptcy protection. The company was the recipient of a $43 million loan guarantee from the Department of Energy in 2009 to finance an energy storage facility in New York.
With an election year looming, this will add additional fuel to the fire ignited by the Solyndra bankruptcy. Solyndra was the beneficiary of a half billion federal loan guarantee and has been a politically high profile company. Its bankruptcy will cost taxpayers the full amount of the loan guarantee and has provided the administration’s opponents with an issue about both the propriety government investments in cleantech and the administration of the program itself. “This latest failure is a sharp reminder that DOE has fallen well short of delivering the stimulus jobs that were promised,” says FL Republican Representative Cliff Stearns, who is leading the Solyndra bankruptcy investigation. “Now taxpayers find themselves millions of more dollars in the hole.”
The DoE says the Beacon deal is different. DOE spokesman Damien LaVere that Beacon has an operational facility in NY which has long term contracts. The company also has cash and the government has top priority to be repaid. “Protecting taxpayer dollars remains the top priority for Secretary (Stephen) Chu and the Department, which is why we were careful to include many protections for the taxpayer in the loan guarantee for the Stephentown project,” said LaVere.
Beacon Power makes energy storage devices used to help the power grid become more efficient. The device works by suspending a large carbon cylinder between two magnets in a vacuum-sealed tube. The Beacon facility can store 20 megawatts of power, about one-50th the output of a nuclear reactor.
The loan program was started by President Bush and expanded under President Obama as part of the stimulus effort. It has backed nearly $40 billion worth of loans so far in renewable energy, nuclear power, and advanced auto technology. The renewable energy component, which backed both the Solyndra and Beacon loans, recently ended.