Gesh

Energy Storage Stocks: Performance, Cost and Bell Shaped Curves

NOTE: In the interest, John, of full disclosure, you're a lawyer living in Switzerland, and this is your third article pumping AXPW in 1.5 months. It's obvious you're 'talking your book,' as a former Director of the company who still holds a long position in its stock, and you're still listed on Yahoo as its General Counsel.

However, rather than asking your audience to presume that passing the Bar in Texas allows you to extrapolate your legal training into passing judgment on the comparative energy-storage efficiencies of batteries over Beacon Power's flywheels, perhaps you and your audience might wish to at least consider the countervailing opinion of John Bzura, principal engineer of research and development for National Grid USA, a major utility company, who has worked closely with Beacon Power engineers on Beacon's planned 200-MW Stephentown, NY, project.

As you can read in the following "Boston Globe" article of 9.15.08, Bzura says that Beacon's flywheel system could be 85-to-90% efficient, ensuring that little electricity would go to waste, adding: "It's about the highest percentage of efficiency of any energy-storage system that I know of. . .much better than batteries, for example."

Source: "Reinventing The Flywheel"

Giant Electricity Storage And Generation Units Might Help Power Grids Run More Smoothly

From "Boston Globe," by Hiawatha Bray, "Globe" staff, 9.15.08

EVEN ELECTRIC UTILITIES can use a little extra power now and then. Usually, they get it by burning more coal, oil, or gas. Beacon Power Corp. says it has a better idea: massive rotating flywheels that store power like giant alkaline batteries, spinning at twice the speed of sound.

"At the end of the day, it's a box of energy," said Bill Capp, president of the Tyngsboro company.

The idea is to fill it up when power demand is low, by using electric motors to spin the flywheels. Then, the whirling wheels are connected to generators to release the power when it's needed.

Publicly-traded Beacon Power has been around for 10 years and has invested $150 million in the concept, with hardly any revenue to show for it, so far. Now, the company is building its first large-scale commercial system, capable of storing and releasing 5 million watts of power.

ISO NEW ENGLAND (New England Independent System Operator), made up of utilities in the region, is launching a Pilot Program to test new ways to regulate power on the grid. Beacon Power was the first company to offer technology for the test, expected to begin in November, pending approval by Federal regulators. The company is also awaiting final approval to build a 20-million watt system In Stephentown, NY, just west of the Massachusetts state line.

Beacon Power's flywheels are complex to build, but simple to understand. If you spin a bicycle wheel with your hand, you're feeding energy into it. The wheel keeps spinning until the energy is absorbed by friction with the air or the wheel bearings. Now, imagine a very heavy wheel. It takes far more energy to move it, but all that energy is stored in the spinning wheel. If you eliminate nearly all sources of friction, the wheel will store the energy for a long time.

Beacon Power flywheels are 2500-pound cylinders made of carbon fiber and fiberglass, and bonded with epoxy. Each is mounted on bearings that generate a magnetic field to support the flywheel, so it floats inside its steel casing. Friction is almost nonexistent. When the flywheel is spun to its full speed of 16,000 revolutions per minute, it can store the energy for hours with little loss.

"The surface speed on this thing would be Mach 2," or twice the speed of sound, Capp said. But, these flywheels don't generate a sonic boom, because they operate in a vacuum to reduce friction even more.

At the base of each flywheel is a motor-generator system like those found in hybrid cars. When electricity is added to the system, it acts as a motor, speeding up the rotation. To release power, the system acts as a generator, translating the rotation to electric power and feeding it into the grid.

Each flywheel can store enough power to run a typical U.S. home for a full day. But, they cost $200,000 apiece, and while Capp hopes to cut the cost to $100,000, they're still far out of the average consumer's price range.

INSTEAD, BEACON POWER hopes to address a constant nuisance for electric utilities--precise regulation of power.

The U.S. power grid is supposed to deliver electricity at 60 cycles per second. Any substantial variation could cause malfunctions in millions of electrical devices. But, surges in electrical demand can cause unwanted frequency variations. Managers of regional electric grids rely on a handful of generators (powered by coal, gas, or oil) to vary their output and regulate grid frequency.

However, that causes plants to emit more air pollution, and subjects equipment to extra wear and tear. "The life of a generator is reduced by one year when you put it on regulation," Capp said.

A flywheel-based regulation service neatly sidesteps those problems. Beacon Power plans to build storage arrays, with dozens of flywheels buried underground, inside vaults made from concrete sewer pipes.

A standard shipping container stuffed with computers and power cables controls the array, and links it to the electrical grid. When there's extra power available, Beacon Power would buy it and use it to spin the flywheels. When the grid needs an extra burst of juice, the flywheels can convert the stored energy back into electricity, which is re-sold to the power network.

"You can almost think of it as recycling electricity," said Gene Hunt, company spokesman. Beacon Power would make its profit by charging a fee for its power-regulation service.

ISO New England is awaiting approval from the Federal Energy Regulatory Commission (FERC) for a plan to test alternative methods of power-frequency regulation. Beacon Power plans to participate, using a 5-megawatt flywheel array under construction in Tyngsboro.

Meanwhile, the company also plans to build a array of 200 flywheels in Stephentown. Regulators have approved construction of the facility, which would provide 20 megawatts of backup power, enough to run 200 homes for one day. The project awaits final approval from managers of the New York power grid.

JOHN BZURA, principal engineer of research and development for National Grid USA, a major utility company, has worked closely with Beacon Power engineers on the Stephentown project. Bzura said the flywheel system could be 85-to-90% efficient, ensuring that little electricity would go to waste.

"It's about the highest percentage of efficiency of any energy-storage system that I know of," he said. "Much better than batteries, for example."

Beacon figures a 20-megawatt system would cost $25 million to build, and bring in $9 million a year in power-regulation fees, at today's prices. That means the installation would earn back its construction cost in less than three years. The flywheels have a 20-year life expectancy.

Capp expects to cash in on surging demand for alternative energy sources. Consider a wind farm that's cranking out lots of megawatts on a Sunday morning, when nobody wants the juice. Beacon Power could capture the electricity with its flywheels, then use it later to balance power demands on the grid.

Energy Storage Stocks: Performance, Cost and Bell Shaped Curves

[Portion of 9.9.08 ltr. from Beacon Power's Dir. of Communication Gene Hunt]:

Dear Sir:

Today we are hard at work building flywheel systems that will soon connect to the grid. Shortly after that happens we expect that they will begin generating revenue from regulation services. When we accomplish this it will be the first time anyone has ever done it. Doing so should prove that there is a clean, sustainable, high performance way to provide regulation, superior in many aspects to fossil-fuel plants. They will add stability to the grid and offer a far better alternative to conventional methods.

There have been very few breakthroughs in energy technology in recent decades. We believe that our technology has this potential, and we know there are many industry and government officials who support the idea. You can be sure that when it happens, the world will hear about it. One would expect such news to go a long way toward restoring investor confidence.

Thank you for your continued support of Beacon Power.

Kind regards, Gene Hunt

Director of Corporate Communications
Beacon Power Corporation
65 Middlesex Road
Tyngsboro MA 01879
office: 978-661-2825
fax: [phone]
email: [e-mail]

Energy Storage Stocks: Performance, Cost and Bell Shaped Curves

This is, John, your third article pumping AXPW in 1.5 months. You're a former Director of the company, hold a long position in its stock, and are still listed on Yahoo as its General Counsel. Clearly, you're shamelessly 'talking your book' in all three "Seeking Alpha" articles. AXPW was at $1.95 when you wrote your first; at $1.80, your second, and the day after your penned this one--in which you again diss Beacon Power/BCON--your own stock's range today is $1.75-to-$1.80, with an average volume of 5527 shares (pink sheeted). I see no point in you posting more of your sales pitches here, since most are now aware of your game. Respectfully, Gesh