Power-surge prevention technology provider Beacon Power, solar energy company Mojave Solar, Nevada Geothermal Power among renewable energy companies backed by DOE loan guarantees that are facing financial challenges
October 31, 2011
– Several renewable energy companies backed by U.S. Dept. of Energy (DOE) loan guarantees are facing financial problems, reported The Wall Street Journal on Oct. 27.
Among these companies are power-surge prevention technology provider Beacon Power Corp. The Tyngsboro, Massachusetts-based company provides “flywheel” technology that helps avert power surges on the electrical grid.
In a June filing with the Securities and Exchange Commission (SEC), Beacon warned that it would need to raise more capital to continue operating into 2012. As of June 30, the project had used up US$38 million of its $43-million DOE loan guarantee, the Journal reported.
Mojave Solar LLC might lose a $1.2-billion DOE loan guarantee it won last month for its large southern California solar project. The state regulator said it was considering denying the project’s power contract with Pacific Gas & Electric Corp. (PG&E) due to high project costs.
The future of Mojave’s power purchase contract with PG&E rests with the California Public Utilities Commission. The project, which is expected to cost $1.6 billion, is already under construction, reported the Journal.
The project is sponsored by Abengoa Solar Inc., according to a Sept. 13 press release announcing that DOE had approved the loan guarantee. It was carried on IndustryIntel.com the same day.
Vancouver, British Columbia-based Nevada Geothermal Power Inc. indicated in a June SEC filing that it probably won’t be able to pay interest due Dec. 31on a $91.3-million private loan, which isn’t U.S. guaranteed.
Last year, it received $79 million in federal loan guarantees, but there isn’t any taxpayer money at risk, according to Nevada Geothermal spokesperson Paul Mitchell. The company is negotiating with lenders for a project that could boost its power generation and ease its financial troubles, according to the filing.
Beacon used its loan to build a 20-megawatt flywheel energy storage plant in Stephentown, New York. The plant stores excess energy from the power grid and releases it back to the grid when needed, the Journal reported.
The plant is operating and making money, but Beacon is concerned about continued low power prices inhibiting its ability to repay debt, according to its filing. The company has issued such warnings for several years, said spokesperson Gene Hunt.
In a move that could help companies like Beacon, the Federal Energy Regulatory Commission last week approved new payments from wholesale power providers, reported the Journal.
The primary source of this article is The Wall Street Journal, New York, New York, on Oct. 27, 2011.