BOARD IS DEAD HERE!! NEWS IS OUT TODAY!!! BCON (2.00) Beacon Power Project Chosen by U.S. Department of Energy as Finalist for Loan Guarantee Program Friday October 5, 1:40 pm ET Flywheel-based Frequency Regulation Plant is One of 16 Clean Energy Projects Selected From 143 Pre-Applications
WILMINGTON, Mass.--(BUSINESS WIRE)--Beacon Power Corporation (NASDAQ: BCON - News), a company that designs and develops advanced products and services to support more stable, reliable and efficient electricity grid operation, today announced that it has been notified by the U.S. Department of Energy (DOE) that the Company can submit a full application for a DOE program that would provide loan guarantees to commercial lenders for up to 80% of the project debt needed to finance the construction of its first 20-megawatt flywheel frequency regulation plant. Beacon Power was one of only 16 companies selected from a total of 143 that filed "pre-applications" for loan guarantees, and the only company whose project was chosen in the "Electricity Delivery and Energy Reliability" category. ADVERTISEMENT
In commenting on the final regulations that were issued under which the loan guarantee applications would be submitted, Secretary of Energy Samuel W. Bodman said, "Loan guarantees aim to stimulate investment and commercialization of clean energy technologies to reduce our Nation's reliance on foreign sources of energy. Finalizing this regulation for the Department's Loan Guarantee program puts Americans one step closer to being able to use new and novel sources of energy on a mass scale to reduce emissions and allow for vigorous economic growth and increased energy security."
The clean energy loan guarantee program is a product of the U.S. Energy Policy Act (EPAct), which was signed into law in August 2005. The invitation to Beacon Power is the result of months of action by DOE to implement the loan guarantee program, beginning in August 2006, when the Department issued a solicitation inviting pre-applications. By the December 31, 2006, deadline for this solicitation, DOE had received 143 pre-applications requesting more than $27 billion in loan guarantee protection (for project costs estimated at more than $51 billion). Of these, 16 were selected to submit full applications. The Department currently has $4 billion in loan guarantee authority, and has requested $9 billion in loan guarantee authority in the FY 2008 budget.
"We are very pleased to be selected by the Department of Energy to apply for a loan guarantee to support the construction of a 20-megawatt flywheel frequency regulation plant," said Bill Capp, Beacon president and CEO. "The DOE has been a strong and effective supporter of our energy storage technology, helping to fund two successful flywheel system demonstrations, as well as the basic design of a 20-megawatt plant. The loan guarantees are intended to assist companies like Beacon to deploy innovative energy technologies on a commercial basis. We look forward to capitalizing on this opportunity."
An important factor in the DOE decision to approve Beacon's pre-application was a condition in the loan guarantee regulations that states: "Eligible projects must employ new or significantly improved technologies that avoid, reduce or sequester air pollutants or anthropogenic emissions of greenhouse gases as compared to commercial technologies in service in the United States at the time the loan guarantee agreement is executed." Beacon's flywheel technology consumes zero fossil fuel and produces no direct CO2, SO2, NOX, mercury or other harmful emissions, and is therefore a significantly cleaner solution for providing frequency regulation compared to older fossil-fuel-based technologies. Detailed research data on the significant emissions reductions enabled by Beacon's technology has been published by KEMA, Inc. The full report is available on Beacon's website.
Beacon Power recently announced that it has applied to build its first frequency regulation plant in New York State in 2008, as well as its intention to pursue additional locations elsewhere in the country as part of its plan to deploy multiple flywheel regulation plants.
Beacon intends to respond to the invitation by submitting a full Application to DOE. However, the fact that it has been invited to submit the application does not mean that Beacon will receive a loan guarantee. As the DOE announcement states, "The applications received will undergo disciplined and rigorous reviews, necessary to take proper account of the potential risks of a project. The full application review will be subject to the final regulations issued today. The decision to issue loan guarantees will depend on the merits and benefits of particular project proposals and their compliance with statutory and regulatory requirements."
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 has been approved for use in three of the country's five open-bid regulation markets, is designed to be a non-polluting, megawatt-level, utility-grade flywheel-based solution that would 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: Material contained in this press release may include statements that are not historical facts and are considered "forward-looking" 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 and financial performances. These forward-looking statements are identified by the use of terms and phrases such as "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 Power Corporation's expectation. These factors include: a short operating history; a history of losses and anticipated continued losses from operations; a need to raise additional capital combined with a questionable ability to do so; conditions in target markets; no experience manufacturing any product at a commercial level or supplying frequency regulation services on a commercial basis; limited commercial contracts for sales to date; our ability to obtain site interconnection or other construction approvals in a timely manner; the dependence of revenues on the achievement of product 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 Beacon hopes 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; the complexity and other challenges of arranging project finance and resources for one or more frequency regulation power plants; 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 the Company's stock price, as well as volatility of the stock price of other companies in the energy sector. These factors are elaborated upon and other factors may be disclosed from time to time in Beacon Power Corporation's filings with the Securities and Exchange Commission. Beacon Power Corporation expressly does not undertake any duty to update forward-looking statements.
Contact: Beacon Power Corporation James Spiezio, 978-694-9121 spiezio@beaconpower.com or Gene Hunt
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