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Beacon Power Corp: Contract to Begin Developing Long-Duration Flywheel
Tyngsboro, Mass. - Beacon Power Corporation (Nasdaq:BCON), a leading provider of advanced energy storage systems and services to support a more stable, reliable and efficient electricity grid, has signed a contract with the U.S. Department of Energy's Advanced Research Projects Agency -- Energy (ARPA-E) calling for Beacon to develop critical components of a highly advanced "flying ring" flywheel energy storage system over a two-year period, beginning immediately. The contract is valued at $2.8 million. ARPA-E grant recipients share a portion of the program cost, and Beacon would contribute $560,000, or 20% of the $2.8 million program total.
As previously announced, the goal of the development project would be to store four times the energy at one-eighth the cost per kilowatt-hour, versus Beacon's current Smart Energy 25 (Gen 4) flywheel system. Beacon's Gen 4 flywheel is currently in production and being deployed on the grid to provide frequency regulation service. Beacon expects that the ARPA-E-funded flywheel system, if successfully carried through to a commercial product, would be suitable for a variety of new applications.
"These innovative ideas will play a critical role in our energy security and economic growth," said U.S. Energy Secretary Steven Chu. "It is now more important than ever to invest in a new, clean energy economy," he added, referencing the projects ARPA-E selected for funding in July of this year. Beacon Power was one of only 43 projects selected during this competitive funding opportunity. ARPA-E had received 529 initial concept papers and encouraged 164 applicants to submit full applications.
One new application of particular interest to the Department of Energy is so-called "ramping" support for wind and solar power. The goal would be to provide one hour of flywheel storage as an energy-balancing resource for intermittent renewable energy assets, and thereby reduce the amount of fossil-based backup power that might be used to provide the same effect. The benefit would be to enable significantly greater market penetration of renewable generation resources in a clean and sustainable way. Some of the technology developed under the ARPA-E program may also lead to reduced costs and increased performance for Beacon's current generation of flywheels.
The Advanced Research Projects Agency -- Energy (ARPA-E) is an agency within the Department of Energy (DOE), chartered by Congress in the America COMPETES Act to create transformational new energy technologies and systems through funding and managing research and development (R&D) efforts. The ARPA-E GRIDS program is focused on supporting high-risk, high-impact R&D efforts to develop proof-of-concept technologies and advanced system prototypes with high potential to revolutionize grid-scale electric energy storage.
About Beacon Power Corporation
Beacon Power Corporation designs, develops and is commercializing advanced products and services to support stable, reliable and efficient electricity grid operation. Beacon's Smart Energy Matrix(TM), now in production, being operated and earning revenue, is a non-polluting, megawatt-scale, fast-response flywheel-based solution designed to provide less expensive, more sustainable and effective frequency regulation services to the nation's power grid. The Company's business strategy is both to supply frequency regulation services from its own plants and to sell systems directly to utilities or grid operators in parts of North America and selected international markets. 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: The 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, financial performances, and project development. These "forward-looking" statements are identified by the use of terms and phrases such as "will," "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's expectation. These factors include: a short operating history; a history of losses and anticipated continued losses from operations; 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 able to comply with the conditions or ongoing covenants of the Federal Financing Bank loan for our Stephentown, New York, facility; our need to comply with any disbursement or other conditions under the DOE Smart Grid grant program; a need to raise additional equity to fund Beacon's projects and its other operations in uncertain financial markets; conditions in target markets, including the fact that it has taken longer than anticipated for some ISOs to comply with 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; 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 current conditions in the financial markets generally. These factors are elaborated upon and other factors may be disclosed from time to time in Beacon Power filings with the Securities and Exchange Commission. Beacon Power expressly does not undertake any duty to update forward-looking statements.
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