Beacon Power: DOE Grants
Beacon Power Corporation announced that on August 26th it applied to the U.S. Department of Energy (DOE) for grants totaling $46.7 million to support funding of the Company’s next two 20 MW flywheel energy storage plants.
Beacon applied under the Smart Grid Demonstrations program of DOE Funding Opportunity Announcement DE-FOA-0000036, which authorizes approximately $615 million that DOE expects to allocate across seven Areas of Interest. The Company submitted two applications under Area of Interest 2.2, “Frequency Regulation Ancillary Services.” DOE anticipates making grant awards within this Area for one or two storage-based frequency regulation plants totaling an aggregate amount of up to $50 million.
One of the Company’s proposed plants would be located in Glenville, New York, at a site within the New York Independent System Operator (NYISO) region. The other plant is located within an area operated by the PJM Interconnection (PJM).
Beacon Power believes its proposed plants meet or exceed every DOE grant program performance requirement. These include fast response, zero direct CO2 emissions, 10-year minimum system life and demonstrated frequency response capability. DOE demonstrated its support of Beacon’s technology in July by making a conditional loan guarantee commitment for the Company’s first 20 MW energy storage plant, planned for Stephentown, New York. As with all such applications, there is no assurance that DOE will approve either or both grant applications, or that if approved, the grants would be for the same amount or on the same terms as requested by the Company.
Beacon Power president and CEO, Bill Capp, commented, “Beacon has now reached the point where we are ready to deploy our technology on a broad commercial basis. We are currently operating two megawatts of our Smart Energy Matrix flywheel energy storage systems on the New England power grid. We’ve proven that the technology is effective at providing frequency regulation services and that we can generate revenue. We look forward to DOE making its grant awards, which they anticipate will begin in December 2009.”
Beacon continues to explore a number of possibilities for obtaining a significant portion of the additional capital required to build its plants from strategic partners. However, to maximize its financial flexibility, the Company filed a universal shelf registration statement on September 1, 2009, on Form S-3 with the Securities and Exchange Commission (SEC). The shelf registration statement must first be declared effective by the SEC. Upon being declared effective, the shelf registration would permit Beacon to offer and sell from time to time up to $60 million of common stock, preferred stock, warrants, units or other types of equity securities described in the registration statement in one or more future public offerings.
Beacon does not currently have any commitments or intentions to sell securities under this registration statement. Future offerings thereunder would be made only by means of a written prospectus or other permitted documents. In that event, the Company would file a prospectus supplement with the SEC outlining the type of securities, amounts, prices, use of proceeds and other terms. The terms of any future offering would be established at the time of such offering subject to market conditions.
A registration statement relating to these securities has been filed with the SEC, but has not yet become effective. Securities may not be sold, nor may offers to buy be accepted, prior to the time that the registration statement becomes effective. This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such state or jurisdiction.
About the DOE Smart Grid Demonstration Projects
Projects under DOE’s Funding Opportunity Announcement (FOA) will be funded, in whole or in part, with funds appropriated by the American Recovery and Reinvestment Act of 2009 (“Recovery Act”). The goal of the FOA is to encourage regionally unique technology demonstrations to verify the viability of smart grid technology, quantify smart grid costs and benefits, and validate new smart grid business models, at a scale that can be readily adapted and replicated around the country. Consistent with the purpose of the Recovery Act, the DOE is expected to give selection preference to projects that can be completed expeditiously.
These demonstration projects are also intended to support the goals of the Energy Storage Competitiveness Act which includes the accelerated development and strengthening of energy storage manufacturing capabilities of the U.S. and the establishment of regional solutions and best practices in implementing smart grid technologies.
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, 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; uncertainties relating to the success of Beacon’s DOE grant proposals; 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 finalizing the DOE loan guarantee support for our New York facility, or complying with the conditions or ongoing covenants of that support; a need to raise additional equity to fund the project and Beacon’s other operations in uncertain financial markets; conditions in target markets, including the fact that some ISOs have been slow 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; 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 filings with the Securities and Exchange Commission. Beacon Power expressly does not undertake any duty to update forward-looking statements.
Beacon Power Corporation
James Spiezio, 978-694-9121
Gene Hunt, 978-661-2825
Source: Beacon Power Corporation