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According to the Boston Business Journal, Beacon Power (NASDAQ: BCON) may be about to go the same way as Solyndra despite receiving government funding. This represents another government-backed alternative energy company seeking Chapter 11 protection.
Beacon Power manufactures flywheel-based energy storage devices, which are, according to the article, “designed to help regulate the flow of power into the electric grid from inconsistent alternative energy sources like solar power and wind power.”
“The firm has received at least $67 million in grants and loan guarantees from the federal government – far less than the $500 million-plus Solyndra reportedly received before it declared bankruptcy.”
BCON received $43 million from the Department of Energy only last year to finance an energy storage plant in Stephenstown, New York. The company then used part of a $24 million smart grid grant to build a second facility in Pennsylvania.
Apparently, all of that money has gone. We are not sure how much one of these facilities costs to build, but they have to be pricey if a company can blow through that amount of money in approximately 12 months.
Early October saw BCON receive a delisting warning from NASDAQ, as the price of stock was fairly well settled at less that $1.
According to BBN, “Beacon Power's loss widened in its second quarter, to $6.2 million, even as its Stephentown, N.Y. plant came to full capacity, bringing the company's quarterly revenue to $525,000. A U.S. government regulatory move announced earlier this month will increase the rates utilities must pay Beacon Power and other storage companies.”
By Steven Anfield
Benzinga is an innovative news and analysis service that focuses on global markets. Benzinga prides itself on providing original, accurate and timely global financial content…