Another DOE loan guarantee recipient files for bankruptcy
Massachusetts-based renewable energy start-up Beacon Power now has the distinction of being the second U.S. Department of Energy (DOE) loan guarantee recipient to file for bankruptcy this year.
In August 2010, the company closed a US$43 million DOE loan for 20MW flywheel energy storage facility near Albany, New York. The facility will remain operating to fulfill long-term contracts as the company reorganizes under bankruptcy protection.
"Despite the need for this restructuring, we believe that our long‐term prospects are favorable. Our goal in taking this action is to minimize job loss, and to continue to find ways to apply our innovative technology in the frequency regulation and energy storage markets," it said in a statement.
Beacon Power’s Smart Energy Matrix energy storage technology was promising to regulate and stabilize the power grid for the addition of renewable energy sources. It is now a looming embarrassment for the Obama Administration.
The DOE released a statement saying that taxpayers’ investment in Beacon Power is safeguarded by several protections: aside from its continued revenue potential, the company has retained a cash reserve that can be used to pay back its creditors.
The loan guarantee program drew controversy when in September, Solyndra, which was granted a flagship $535 million loan guarantee, seized operations immediately after filing for bankruptcy.
While the price tag of Solyndra’s failure pales in comparison to the Pentagon’s biggest boondoggles, it has still wrought a major political cost. DOE loan chief Jonathan Silver resigned last month, and Congressional Republicans have been generating an air of scandal with aggressive oversight investigations.
The Obama Administration is conducting its own internal review of the loan process, but the revelation that another DOE loan guarantee recipient has filed for bankruptcy is surely to deepen the political morass in Washington, D.C.
Related on SmartPlanet:
- DOE Loan Chief Jonathan Silver Resigns
- Chart of the day: Solyndra loan guarantee VS Pentagon boondoggles
- Beacon Power closes 43 million DOE loan for 20mw flywheel energy storage plant
This post was originally published on Smartplanet.com