Bust: Another Obama-backed green business goes bankrupt

“Only” $39 million down the drain this time.

From Bloomberg:

Beacon Power Corp., an energy- storage company that received $43 million in backing from the U.S. program that supported failed solar-panel maker Solyndra LLC, filed for bankruptcy after struggling to raise private financing.

The money-losing company, which makes flywheels that manage energy moving through a power grid, had sought to avoid the fate of Solyndra…

“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,” Chief Executive Officer F. William Capp said in papers filed yesterday in U.S. Bankruptcy Court in Wilmington, Delaware.

Beacon, based in Tyngsboro, Massachusetts, listed assets of $72 million and debt of $47 million in its Chapter 11 petition. Two affiliates also entered court protection.

Beacon’s first grid-scale plant, with 200 flywheels, began operating in January. The 20-megawatt facility in Stephentown, New York, was funded using the $43 million Energy Department loan guarantee issued in August 2010. About $39.1 million is currently due under the loan, Capp said.

Read the Bloomberg report.

7 thoughts on “Bust: Another Obama-backed green business goes bankrupt”

  1. WTF? “Markets are good at commercializing technologies developed with government money”????? It doesn’t matter the source of the money. If a business or technology is commercially viable and a profit can be made to sustain the business, it doesn’t matter the source of the money. Government infusions of cash are almost exclusively given to technologies or businesses that are NOT successful and cannot be commercially viable. If investors see a profit potential, they will invest. If not, they won’t. Your is one of the most untrue claims I have ever seen.

  2. I’ve never seen any good direction come out of the government sponsored development. Bell labs created the phone system quite on their own after the telegraph companies turned them down, and I don’t remember learning about the government building telegraph wires. That was Western Union’s doing. The railroads, yes.

    Computers developed from Military need (which is completely different from a government mandate), which is why the discoverer of the first computer bug later gained the title of Admiral, but this was quickly eclipsed by research at universities and then at private companies. Texas Instruments developed the integrated circuit quite on their own without government support or help (aside from military contracts, which is again, VERY different than the government giving people money to go build something).

    The entire “government created computers” meme is comparing the government filling a specific, military need for repetitive, complex calculations that was then taken up by accounting and research institutions planetwide to subsidizing production-line technology that no one really wants.

  3. nuclear energy, jet engine, modern telecommunications (internet did bot come from the private sector), human genome, most of modern biology, computing (did not begin with PC). Low hanging fruit has been picked.

    You want further examples, look at contemporary biotechnology. Big Pharma spends 30% of its income on advertising, often dubious off label drug applications. New drugs come from academia and other government sponsored research, converted into biotech startups when something seems promising, bought out by big pharma when really promising and taken into clinical trials.

    Want further examples, look at R&D budgets in industry. First to go to pad the bottom line, and limited to incremental improvements. Bell Labs during the time of Ma Bell monopoly, Bell Labs today under Lucent/Alcatel..

  4. “Markets are good at commercializing technologies developed with government money. Not so good developing far out new technologies.”

    Fire, wheel, bow and arrow, bronze, brass, steel, gunpowder, steam engine, refrigeration, light bulb, elevator, train brakes, telephone, Bessemer process, electric generators, internal combustion engine, airplane, nylon, Teflon, vulcanized rubber, butyl rubber, transistors, fiber optics, PC, Ipod, microwave oven, radio astronomy, . . .

  5. I am glad they built a plant. Much better spent money than another war. Get real, we need every energy source there is. markets are taking us towards global Brazil, rather than global prosperity. As in the past, the impetus for new technologies will come from the government. Some money will be lost in the process, as people who do this are pushing the envelope of what is possible and economic today.

    Markets are good at commercializing technologies developed with government money. Not so good developing far out new technologies. This is the inconvenient truth of market economy

  6. Flywheels to regulate power on an electrical grid? Isn’t that like using a feather to manage a hurricane?

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