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Green Investor News - Beacon Power Affirms Strong Support for $4-Billion Federal Government Energy Storage and Smart Grid Initiatives
Company Plans to Pursue Energy Storage Project Funding Opportunities Through U.S. Department of Energy Technology Development Grants
TYNGSBORO, Mass. - April 29 2009 -- Beacon Power Corporation (Nasdaq: BCON), a company that designs and develops advanced products and services to support more stable, reliable and efficient electricity grid operation, announced its full support for the U.S. Department of Energy's (DOE) new smart grid technology development project funding programs. The program plans were announced on April 16, 2009, by Vice President Joe Biden and Commerce Secretary Gary Locke.
The Vice President outlined plans to distribute grants for smart grid technology development ($3.3 billion) and for smart grid storage, monitoring and technology viability (an additional $615 million). As part of Vice President Biden's announcement, the DOE released a draft Funding Opportunity Announcement (FOA) for a smart grid regional demonstration initiative. Beacon Power has reviewed the initial FOA and plans to apply for one or more grants to support deployment of the Company's energy storage technology for grid frequency regulation.
"We're very pleased that the Obama administration and DOE have determined that energy storage and smart grid technologies merit funding support to demonstrate the benefits their implementation will bring to our nation's power grid," said Bill Capp, Beacon president and CEO. "It's very encouraging that flywheels have been specifically recognized as a candidate technology in the draft Funding Opportunity Announcement."
"We are reviewing the relevant energy storage project opportunities," Capp continued, "and we look forward to the details being finalized by DOE. We then expect to submit one or more grant proposals which, if successful, will help Beacon demonstrate how our flywheel technology can provide utility-scale frequency regulation service cleanly and efficiently, and in accordance with federal smart grid requirements."
The draft FOA includes proposed funding for one or two energy storage demonstration projects for grid frequency regulation. The proposed total funding to be made available for the project(s) is $40-50 million, on a 50% applicant cost-share basis. The DOE has not yet announced a schedule for finalizing the FOA, or for submission deadlines or award announcements.
In addition to and separate from this new funding opportunity from the federal government, Beacon Power and DOE are in the final due diligence stage of the Company's application for a loan guarantee. The loan guarantee, if approved and successfully negotiated, could lead to funding for a large majority of the cost of Beacon's proposed 20-megawatt flywheel frequency regulation plant in Stephentown, New York. The proposed new DOE grant funding opportunities described above are additive to Beacon's loan guarantee application – that is, Beacon has the potential to be awarded both a loan guarantee and one or more co-funding grants under the new DOE initiative.
About the Draft Funding Opportunity Announcement (FOA)
The Department of Energy's draft FOA outlines opportunities to apply for grants that will co-fund utility-scale energy storage projects based on advanced technologies, including flywheels. The specific language in the FOA is as follows:
"An objective of this FOA is to support demonstration projects for major, utility-scale, energy storage installations. The projects will help to establish costs and benefits, verify technical performance, and validate system reliability and durability, at scales that can be readily adapted and replicated across the United States. Energy storage systems include the following technologies: advanced battery systems (including flow batteries), ultra-capacitors, flywheels, and compressed air energy systems. Application areas include wind and photovoltaic (PV) integration with the grid, upgrade deferral of transmission and distribution assets, congestion relief, and system regulation. Applications are also sought to demonstrate promising utility-scale storage technologies in order to rapidly advance their market readiness in the U.S." [Emphasis added.]
Within the draft FOA's Utility-Scale Energy Storage Area of Interest are a number of sub-areas, including frequency regulation, for which project proposals are being sought. The draft FOA describes the frequency regulation requirements as follows:
"Frequency regulation ancillary services are important to balancing areas, independent system operators (ISOs), regional transmission operators (RTOs), and electricity market operations. Technology application areas include balancing generation and load to maintain system frequency within NERC-defined limits, maintain power transmission and distribution stability and reliability, improve regional energy efficiency, and reduce CO2 greenhouse gas emissions.
Applications should address the following goals:
- Fast-response multi-megawatt system that can achieve full power in 4-seconds or less, up or down
- Zero CO2 emissions from operations: system does not consume any fossil fuel but recycles electricity between the grid and energy storage system on a continuous basis
- Energy storage capacity: shall be sufficient to perform frequency regulation as defined by the applicable tariff, but in no case less than 15 minutes as measured from a state of rated charge to rated discharge
- Efficiency: Minimum round trip efficiency of 75% as measured at the last transformer interconnecting the system to the grid and inclusive of all losses of the storage system and ancillary equipment, based on an actively managed control signal designed for energy storage assets
- Frequency Response capability: in addition to performing frequency regulation, system has the capability to perform Frequency Response to help the regional system recover from events such as loss of generator or transmission capacity
- System life: 10-year minimum; also provide cost option to extend life to 20-years
- Installation, commissioning and start-up: 3 years or less after project award
- Capacity: must be sufficient to bid into open regulation market
- Hazardous materials: provide MSDS listing, as relevant
- Prior to installation, ability to operate at maximum rated charge/discharge rate sufficient to reach stable operating temperature must be demonstrated
- Prior to installation, ability to accurately respond to ISO/RTO signaling must be demonstrated
About Beacon Power
Beacon Power Corporation designs, develops and is taking steps to commercialize advanced products and services to support stable, reliable and efficient electricity grid operation. The Company's primary business strategy is to commercialize its patented flywheel energy storage technology to perform frequency regulation services on the grid. Beacon's Smart Energy Matrix, which is now in production, is a non-polluting, megawatt-level, utility-grade flywheel-based solution to provide sustainable frequency regulation services. Beacon is a publicly traded company with its research, development and manufacturing facility in the U.S. For more information, visit www.beaconpower.com.
Safe Harbor Statements under the Private Securities Litigation Reform Act of 1995: This Material contained in this press release may include statements that are not historical facts and are considered "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Beacon Power Corporation's current views about future events and financial performances. These "forward-looking" statements are identified by the use of terms and phrases such as "believe," "expect," "plan," "anticipate," and similar expressions identifying forward-looking statements. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from Beacon Power Corporation's expectation. These factors include: a short operating history; a history of losses and anticipated continued losses from operations; a need to raise additional capital combined with a questionable ability to do so, especially in view of the current situation in the financial markets; the complexity and other challenges of arranging project financing and resources for one or more frequency regulation power plants, including uncertainty about whether we will be successful in obtaining DOE loan guarantee support for our New York facility; conditions in target markets, including the fact that some ISOs have been slow to comply with the FERC's requirement to update market rules to include new technology such as the Company's; our ability to obtain site interconnection approvals, landlord approvals, or other zoning and construction approvals in a timely manner; limited experience manufacturing commercial products or supplying frequency regulation services on a commercial basis; limited commercial contracts for revenues to date; the dependence of revenues on the achievement of product optimization, manufacturing and commercialization milestones; the uncertainty of the political and economic climate, and the different electrical grid characteristics and requirements of any foreign countries into which we hope to sell or operate, including the uncertainty of enforcing contracts, the different market structures, and the potential substantial fluctuation in currency exchange rates in those countries; dependence on third-party suppliers; intense competition from companies with greater financial resources, especially from companies that are already in the frequency regulation market; possible government regulation that would impede the ability to market products or services or affect market size; possible product liability claims and the negative publicity which could result; any failure to protect intellectual property; retaining key executives and the possible need in the future to hire and retain key executives; the historical volatility of our stock price, as well as the volatility of the stock price of other companies in the energy sector, especially in view of the current situation in the financial markets generally. These factors are elaborated upon and other factors may be disclosed from time to time in Beacon Power Corporation's filings with the Securities and Exchange Commission. Beacon Power expressly does not undertake any duty to update forward-looking statements.
Contacts:
Beacon Power Corporation
James Spiezio, 978-694-9121
spiezio@beaconpower.com
or
Gene Hunt, 978-661-2825
hunt@beaconpower.com
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