Loan Guarantees for Beacon, Nordic; USEC Prepares for Offer
The Department of Energy (DOE) last week issued $59 million in conditional loan guarantees to Beacon Power Corp. and Nordic Windpower, while USEC said on Monday it expects to receive a loan guarantee for its American Centrifuge Plant by early August.
These are the second and third loan guarantees made this year. In March, the department made its first conditional loan guarantee for $535 million to Solyndra Inc., which plans to construct a manufacturing plant for its cylindrical solar photovoltaic panels. The loans are contingent on companies providing additional financing.
Beacon Power Wins $43 Million Loan Guarantee
The DOE conditionally committed about $43 million to finance more than 62% of Beacon Power’s 20-MW flywheel-based energy storage (PDF) plant to be located in Stephentown, N.Y. The innovative plant, which will provide frequency regulation services, is expected to help stabilize and enhance the performance of the grid.
Beacon said in a statement last week that nearly $50 million of the estimated $69 million total project cost will be spent on equipment and on the facility. Beacon’s equity contribution of roughly $26 million will be provided by a combination of cash, in-kind assets, and other eligible project costs.
“With this anticipated federal funding and expected plant construction, we will make a major transition from development and pilot operation of our flywheel technology to full-scale commercial deployment,” said Bill Capp, Beacon president and CEO. “For New York initially, and later other regions where plants could be built, it will also signal a dramatic shift to a cleaner, more sustainable method of providing frequency regulation on the grid.”
Nordic Windpower Offered $16 Million
Last week, the DOE also offered a $16 million loan guarantee to Nordic Windpower to support its expansion of an assembly plant in Pocatello, Idaho. The Berkeley, Calif.–based company manufactures and sells innovative two-bladed (rather than three-bladed), utility-scale wind turbines with flexible teeter hub technology. Its 1-MW N1000 turbine’s rotor blades flex at the hub to dissipate turbulent winds before they can reach or damage the drive train, increasing reliability. “The turbines are more economical to install because the blades can be attached to the hub and nacelle on the ground and then raised with a single crane lift,” the company said in a statement.
The loans will be supported by the $787 billion economic recovery bill. The DOE has the authority to issue $32.7 billion in grants and another $6 billion in loan guarantees for alternative and advanced energy technologies. Chu had previously said the DOE would likely disperse 70% of the total $38.7 billion the department received in the stimulus package by the end of 2010.
The loan guarantee program has been heavily criticized for its slow pace. It was called for in a 2005 law but was not established until 2007. Through December 2008, the DOE had issued five solicitations for projects, and it had received 11 applications requesting about $8.2 billion in loan guarantees.
Beacon Power and Nordic Windpower were two of 16 finalists selected in 2007 from 143 applicants, which had solicited more than $27 billion.
USEC Expects Loan Guarantee by August, or Bust
In a related story, USEC on Monday said that it expects the DOE to award the enriched uranium fuel supplier a conditional loan guarantee by early August. The loan guarantee would allow USEC to continue deployment of its American Centrifuge Plant, currently being built in Piketon, Ohio.
But the company also said that it is preparing demobilization plans for the American Centrifuge Plant if it does not receive a conditional commitment by early August. USEC had announced in February a slowdown in the planned escalation of spending on the project. It said a further delay in obtaining a DOE loan guarantee would require the company to implement further project spending reductions.
USEC has invested nearly $1.5 billion in the American Centrifuge project and needs a DOE loan guarantee to secure a substantial portion of the remaining financing needed to complete the project. USEC submitted its application to the DOE in 2008 and said it has been working closely with the department to expedite the process.
Demobilization could be initiated in August and would involve the “partial or full halt” of certain American Centrifuge project activities and plant construction. “Even if a conditional commitment is provided by early August, demobilization may be initiated if the terms of such conditional commitment are not acceptable or if subsequent progress toward achieving actual funding later this year under the loan guarantee is not maintained,” USEC said.
Sources: DOE, Beacon Power, Nordic Windpower, USEC, POWERnews