Friday, October 21, 2011

Beacon Power, other energy storage companies get backing

By James M. Connolly

Companies such as Tyngsborough’s Beacon Power Corp. that promise to help regulate the flow of energy on the electric grid through use of backup power got a boost from a federal agency Thursday when the Federal Energy Regulatory Commission (FERC) approved changes to how those companies are compensated by the utilities that they work with.

Beacon Power (Nasdaq: BCON), which earlier this month was threatened with delisting on the Nasdaq Stock Market and has hired an advisory group to help line up additional funding for its initial projects, has developed large-scale flywheel technology that would store energy generated by sources such as wind and solar projects and then release it into the grid as needed, particularly when renewable sources reduce their energy production because of factors like weather changes. Beacon, along with other energy storage developers, would provide the grid with what is called frequency regulation, keeping the flow of electricity at required levels.

On Thursday, FERC approved a plan that the industry group Electricity Storage Association said in a press release will “justly compensate energy storage-based resources that provide certain key reliability services on the electric grid.”

With the FERC approving the plan, FERC chairman Jon Wellinghoff said in a released statement, “It became clear that, by not compensating for the amounts of frequency regulation service that different resources provide, organized markets do not adequately compensate for the additional work performed by faster and more accurate resources.”

The new plan doesn’t just affect Beacon. It also could benefit battery developers such as A123 Systems Inc. (Nasdaq: AONE) of Waltham or the various companies that are focused on storing energy using compression techniques involving cylinders or caverns.

In a press release issued by the Electricity Storage Association, Beacon Power vice president of asset management and market development and chairperson of the ESA Advocacy Council Judith Judson said, “We have shovel-ready energy storage projects along with associated potential jobs that have been waiting for financial commitments from investors. With this final rule, we hope to see a much greater willingness by the private sector to support these new technologies. We urge FERC and the grid system operators to work toward timely implementation of the rule.”