Beacon slows flywheel storage plans

Tyngsboro, Mass.-based Beacon Power (Nasdaq: BCON) said the global economic uncertainty has prompted it to scale back plans for a 5-megawatt flywheel energy storage system.

Beacon made the announcement in its third-quarter earnings report, also noting the company will begin receiving its first commercial revenue Nov. 18 from the 1 MW frequency regulation capacity at its site in Tyngsboro, Mass., under ISO New England's Alternative Technologies Regulation Pilot Program.

In September, Beacon unveiled a system of 10 flywheels that operate together to supply or absorb up to 1 MW of electricity, giving extra stability to a grid that's experiencing demand or supply peaks (see Beacon Power, ISO New England test flywheel storage). A flywheel is a kinetic, or mechanical battery, spinning at very high speeds to store energy that is instantly available when needed. 

Beacon planned to put 5 MW of flywheels in service there by the end of the year, followed by commercial deployment, the company said. But because of the volatility in the credit and equity markets, Beacon plans to instead reach 3 MW by the end of the year and 5 MW by the end of the first quarter in 2009.

ISO New England is an independent system operator that oversees transmission grids in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont. 

Last year, Beacon completed successful field testing by the New York State Energy Research and Development Authority and the U.S. Department of Energy (see Beacon flywheels pass regulatory hurdle in New York).

The New York Independent System Operator's Management Committee recently approved the funding for new rules that are designed to allow energy storage devices to also regulate energy loads. Those rules are expected to go into effect in June 2009, Beacon said.

Beacon Power is awaiting a decision from the Department of Energy on its application for a loan guarantee to cover up to 75 percent of the cost of a plant in Stephentown, N.Y. Beacon expects to sign a 20-MW interconnection agreement with National Grid for the Stephentown plant in the first quarter of 2009 (see Beacon Power building frequency regulation plant).

In October, Beacon agreed to sell 8.7 million shares in exchange for $7.9 million of new investment, to be used to fund operations, including completing flywheel systems for commercial deployment of five megawatts of frequency regulation service.

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