While Solyndra continues to look for a suitor in its bankruptcy proceedings, another bankrupt and federally-backed company looks like it’ll be able to pay back what it owes to taxpayers more quickly. Beacon Power, the federally-backed energy storage company, has found a buyer: Rockland Capital.
The private equity firm won the bid, which is subject to court approval on Tuesday, to buy Beacon’s assets, including its 20-megawatt flywheel energy plant in New York that was built with a federal loan guarantee.
Rockland Capital plans to pay $30.5 million in cash and a promissory note for Beacon. The deal would allow the U.S. Department of Energy to recoup more than 70 percent of the investments made through its loan guarantee program, a DOE spokesman told Reuters.
Rockland, a private equity firm founded in 2003, focuses on energy investments in North American and Europe. Its investment portfolio mostly includes natural gas power plants, according to a list on its website.
The DOE awarded Beacon a $43 million loan guarantee in 2010 to build a $69 million flywheel plant in New York. Beacon turned that loan guarantee into a loan from the Treasury-run Federal Financing Bank. It owed the government about $39.1 million when it filed for bankruptcy last October. The DOE’s interest to recoup the loan – and potentially minimize any comparison of Beacon to Solyndra and the government’s role in their failures – prompted Beacon to put the flywheel plant for sale last November.
A flywheel is a mechanical device for storing electricity. The term refers to the rotor in a vacuum chamber that spins at a high speed while being powered by electricity it takes from the grid. When the time comes to give the power back to the grid, the flywheel switches into the generator mode and the rotor slows down to discharge power.
A flywheel can charge and discharge energy quickly, making it a good source for providing quick bursts of power that an electric grid needs from time to time to make sure it operates at the optimal, 60-hertz frequency. Grid operators foresee a greater need for frequency regulation service in the future as more intermittent but cleaner energy such as wind and solar flows into the grid.
The Federal Energy Regulatory Commission (FERC) last year issued a critical ruling that will require higher payments for such services. Beacon was set to benefit from this ruling, which made its flywheel plant much more appealing to potential buyers. FERC will have to approve the sale of the flywheel plant before Rockland can own it.
Rockland said it plans to rehire the majority of the Beacon employees and put up money to build another, 20 MW flywheel plant, which will be in Pennsylvania.