Feb. 6 (Bloomberg) -- Beacon Power Corp., the power-storage developer that filed for bankruptcy after winning a U.S. loan guarantee, agreed to sell its only plant to Rockland Capital for $30.5 million in cash and a promissory note, plus additional obligations.
Rockland will continue operating the 20-megawatt plant in Stephentown, New York, and help develop a second facility in Pennsylvania, Beacon said today in a statement. Rockland also will assume Beacon’s funding obligations to the U.S. Energy Department of $6.6 million.
Beacon, based in Tyngsboro, Massachusetts, sought protection from creditors Oct. 30 after receiving a $43 million federal loan guarantee to build the world’s first commercial plant using spinning flywheels to retain energy. The agreement means the government may get back almost 71 percent of that, said Damien LaVera, an Energy Department spokesman.
“This agreement improves the prospect of recovering taxpayer funds,” LaVera said today in an e-mail. “Rockland’s commitment to this project demonstrates the viability of the Stephentown plant.”
Beacon’s systems use 2,500-pound (1,134-kilogram) carbon fiber cylinders rotating as fast as 16,000 times a minute to store kinetic energy. The power can be converted into electricity quickly when the grid needs an immediate bump to meet surges in demand. It also works in reverse when the grid has more power than it needs.
Rebuilding the Business
“It’s a good technology, and I think it’s something that if properly funded and financed can really grow into a grid-supporting role,” Walter Nasdeo, director of research at Ardour Capital Partners LLC in New York, said in an interview. “This deal gives them the opportunity to go out and rebuild their business without the challenge of finding future capital.”
Flywheel power-storage “has tremendous capabilities to help maintain the balance between grid supply and demand,” Shane Litts, a Rockland Capital spokesman, said in an e-mail. “The need for these types of technologies will only increase as more and more intermittent resources, such as wind and solar, are added to the generation mix.”
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