Getting a Lead Balloon Aloft is Hard Even With Billions in Federal Subsidies

|

A government bureaucracy's notion of a pre-commercial balloon

Yesterday, the Washington Post reported that Beacon Power, a company that received one of the first federal loan guarantees being shoveled out the door of the Department of Energy under the Obama administration, is now bankrupt. Beacon Power manufactured and operated large flywheels with the goal of storing excess power. Its bankruptcy leaves the taxpayers on the hook for about $40 million. What's delightfully ironic is that Beacon's CEO Bill Capp explained to the Post why government subsidies are necessary to support "green" energy companies like his. From the Post

In an interview Sept. 14, Capp said his company would not have been able to construct its Stephentown [flywheel energy storage] plant without federal assistance.

"We absolutely couldn't have done it without support from the government, because no one else was willing to do it," he said, adding that it was challenging to find venture capital firms willing to finance a plant."The projects are so huge, that's the problem. If you demonstrate an energy technology on a grid scale, that's $100 million."

Capp added that he didn't understand the political furor surrounding Solyndra's collapse.

"I don't get it. The whole point of the loan guarantee program is it was designed to help companies that weren't quite ready to get a commercial loan," he said.

And here's a bonus quotation:

Nicole Lederer, co-founder of Environmental Entrepreneurs…said that federal support was important. "This country is not doing nearly enough to help this industry get off the runway and into the air," she said.

Getting a lead balloon aloft is difficult even with billions in federal subsidies.

As it happens, Bernard Weinstein, the associate director of the Maguire Energy Institute at the Cox School of Business at Southern Methodist University has a letter to the editor of the New York Times today that seems particularly relevant

…the renewable power industry has become addicted to federal subsidies and probably can't stand on its own without them. Last year alone, these tax breaks cost the Treasury $7 billion. For every megawatt of electricity produced by solar, the subsidy amounted to $776. For wind, it was $56.

At present, about 76 percent of all energy tax breaks go to renewables, even though they account for less than 5 percent of electric power generation, excluding hydropower. Green energy advocates justify these large and growing subsidies by making comparisons with current and past tax breaks for oil and gas. But they fail to mention that the tax incentives for fossil fuels amount to a mere 64 cents per megawatt.

Renewables have their place, and perhaps at some time in the future they'll be able to stand the market test. But they don't obviate the need for reliable, uninterruptible power. If the Obama administration is serious about energy security, it should approve the Keystone XL pipeline, open up more federal lands — including the outer continental shelf — for exploration and production, and embrace the shale gas revolution and its potential for providing a clean and relatively inexpensive fuel source for power generation. These actions will require no new subsidies.

For additional backgound, take a look at more insightful (but depressing) Reason commentary on the federal loan guarantees extended Solyndra which is just the first of many government subsidized green companies that will soon go bust. See also my feature article on the failed history of federal energy subsidies here and here

NEXT: Greece: Money! We Don't Need Your Stinkin' Money!

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. I hate to be a jerk but Mythbusters actually did make a lead ballon fly and quite well i might add.

    forces and vectors and pressure differentials man…like corporations man…

    1. My uneducated and non PHD substanceless opinion is that ACTUAL drivers for this market will come from more rural migration of people. I would love to live in the middle of nowhere but still have HSD, television, working toilets, etc. Unfortunately that is too expensive right now for me but maybe in the furutre who knows.

      1. Because out in the country we don’t have television or working toilets. We just shit all over the floor and the posts you see from me aren’t really there.

        1. Don’t make me kick your ass city boy. I have lived more rurally than a vast majority of prople in this country. I know what it means to be in the boonies. BUT if you want city water in Delta County, electricity in Crestone, or over 1200 baud internet in Chama New Mexico then you are going to either need to move closer to other people of pay a fuck load of money to get it to you. Hence the “green” solutions i mentioned. Self sufficiency is the real benefit to a lot of this tech. Ask a rancher the value of his windmills. Wells, effienct batteries, small scale hydro, solar, flywheels, all of this is more beneficial to a ruralite than to a city rat.

          1. There’s this new thing you may have heard about, it’s called satellite internet.

        2. White Indian will shit on your floor… probably for free!

    2. And the Mythbusters did it without government subsidies.

    3. Mythbusters showed it is entirely possible to have a lead balloon go over, but they also demonstarted there is no reason to want to make such a thing other than for the novelty.

  2. I’m beginning to suspect the federal government isn’t even very good at picking winners and losers anymore. In addition to subsidies and loan guarantees, would it be that difficult to ramp up regulation stifling the energy-producing competition?

    1. I’d have gone with, I dunno, “Communications Breakdown” or maybe “Dazed and Confused.” Something earlier and more futility-filled.

      1. “No Stairway? Denied!”

        1. Hey, I still love the song. I just thought they had more appropriate options. Maybe “The Lemon Song?” It’s about squeezing lemons.

        2. Maybe a little When the Levee Breaks to tie all the threads together.

      2. “Communications Breakdown” or maybe “Dazed and Confused.”

        This isn’t a post about the FCC or OWS. It’s about crony capitalism, so the song should be “How Many More Times” .

      3. “What Is and What Should Never Be” also works.

        1. In my mind, “What Is and What Should Never Be” is the pinnacle of rock bass playing. John Paul Jones is all over the place without ever becoming distracting. Just awesome.

      4. Good Times, Bad Times

      5. I Can’t Quit You Babe would accurately describe liberal obsession with green energy.

      6. Hang Man works too.

        1. Dread Zeppelin versions okay?

  3. People said the same thing about Led Zeppelin.

  4. We absolutely couldn’t have done it without support from the government, because no one else was willing to do it…. I don’t get it. The whole point of the loan guarantee program is it was designed to help companies that weren’t quite ready to get a commercial loan.

    Now why do you think no one else would give you a loan? Could it have anything to do with the fact that your idea failed, you went bankrupt, and are now unable to repay the loan?

    1. It’s obviously a vast right wing republican conspiracy to keep us using foreign oil and fighting wars with brown people that live in deserts.

    2. I don’t get it.

      Clearly.

  5. Beacon Power manufactured and operated large flywheels with the goal of storing excess power.

    Perpetual motion is just 20 years away! Friction is just a right-wing meme!

    1. Wait, wait, wait, BACON POWER?

      1. Do you have enough money to even be allowed to talk to me? I’ve checked the demographics tables, you know.

        1. Two sentences? And I don’t see a single reference to substances in either one of those sentences. Peasant.

          1. Three sentences? That’s supposed to be substantive enough to be worth talking to? You really are a fart in a hurricane.

            By the way, White Indian makes some great points. Which means substance is found in cut and pasting the same quote over and over again every time you post.

            “You’d better flush out your head, new guy. This isn’t about freedom; this is a slaughter. If I’m gonna get my balls blown off for a word, my word is ‘poontang’.”

            -Animal Mother, combat anthropologist

            1. Animal Mother. Jayne Cobb.

              Really, Adam Baldwin’s contributions to the betterment of humanity are grossly underestimated.

              1. The most underrated sidekick of the modern era. I have a picture of Jayne Cobb in my rear window with the caption, “Shiny, let’s be bad guys”

                That’s how much Jayne Cobb.

                1. I have a Blue Sun shirt. Nobody knows what the heck it’s for.

                  1. I have a Blue Sun shirt. Nobody knows what the heck it’s for.

                    I like the cut of your jib. Does it have the bloody slash across the chest?

                    1. Workin’ on it.

                    2. i’ll kill a man in a fair fight, or if he pisses me off, or i don’t like the way he looks at me,….

          2. Respond in Greek.

      2. NO, NO, NO, YOU FUCKERS!
        Your ethanol has already caused tequila shortages!

        1. Yes, let’s not add a bacon shortage to the damage done to our precious tequila.

          1. Hmmm, baconized tequila, with lime.

            1. Is it possible to combine such things?

              1. You’ve never had a margarita with your breakfast tacos?

                1. I will save that delicious looking breakfast Old-Fashioned recipe for a special occasion. Unfortunately waking up on a Thursday isn’t special enough.

        1. And for mushroom fans:

          http://www.kitchencritic.co.uk…..rooms.html

  6. This again reminds me of NPR’s story yesterday where the physicists were essentially giving warnings about the earth’s carrying capacity.

    It was a highly schizophrenic report with one physicist warning that the world can’t abide Africans living the way we do, with all of our cell phones, iPads, twitters and facebooks. It’s just too much consumption.

    He then said, “I hate to say this, but energy is too cheap.” Then at the tail end of the report, he said, “What we need is a form of cheap, renewable energy.”

    I’m sure in the first quote he was specifically worrying about fossil fuels being too cheap as opposed to other forms of energy. But the report was about consumption of goods: metals, raw materials– all the stuff required to make the professors iPhone 4s. And how Africans shouldn’t have those things.

    But what the good professor– and he’s a fucking physicist– fails to understand is energy is energy. If his fear is consumption of raw metals, then a cheap form of renewable energy is still energy which will allow me to continue to use my cell phone.

    When I turn on my cell phone, it doesn’t matter if I got the energy from wind, solar, oil, diesel, hydrogen or hydroelectric. All I know is my cell phone turned on. If his fear is consumption, then a cheap form of renewable energy allows me to keep my cell phone on. And it will allow Africans to have them too.

    1. I wonder how long it will be before we start mining landfills.

      Seriously.

      1. I was thinking about this last night as I considered whether to put a tin in the garbage or recycling.

      2. We already do.

      3. That is the future. As it becomes cheaper to recycle than to extract new raw materials, we will lean more heavily upon it. Whether the breaking point between the two happens is in 50 or 5,000 years though, I have no idea.

    2. Someone should tell the professor (I’m curious as to who it was) that that ship has sailed – Africa is lousy with cell phones.

      1. Those are NGO’s. They need them for their work.

    3. Doublethink is alive and well.

    4. Who WAS that dumbass, Paul? We need to spend an entire thread tearing him apart.

  7. Flies? WHeels? How did they make the little bastards run on them?

    1. Lots of horse shit.

  8. beacon Power wasn’t renewable energy and I’m not convinced it was really green either.

    1. People do realize that a flywheel is a battery, right? Right? A flywheel isn’t energy, it’s energy storage.

      Beacon power had a physicist or… someone who graduated high school on his staff to tell him this, right?

      1. Hold it there Tom Mix, you’re not fooling me with a lot of sciencey talk.

      2. I mean, don’t get me wrong. We need clever forms of storage of power, but I’m not convinced flywheels are the way to go.

        There’s some interesting work being done with wind power which pumps water into a column when the wind is blowing but the demand is low. But flywheels? This is so fucking niche it’s no wonder he couldn’t find someone to give their hard-earned cash for this “investment”.

        1. A few years ago I went on a internet-rabbit-hole exploration of Flywheels. They seemed to make sense at a house-by-house level. You could use it to either : buy electricity during off-peak hours and store it fairly efficiently, or use it to store excess solar/wind stuff. From what I recall, it seemed reasonably efficient as long as your goal was to store energy for on the order of 24 hours.

          Cost was 5-10K. You had to bury the flywheel, in case of catastrophic failure. And like most things in this category, it required (a) a power company that has some kind of rational pricing scheme and/or (b) current energy prices going up by 2-3x. So in the real world right now, ya it’s stupid.

          This is all based on memory of a 24-hour internet OCD explosion from a few years ago, so YMMV.

      3. Paul: Yes, but the idea is that you need such flyhwheels to store the intermittent energy produced by solar and wind. The hope is that such storage might move solar and wind in the direction of being baseload power.

        1. Ron: I have a prediction. We will find ways of storage, but if and when we figure out a workable, efficient free-market method, it won’t involve flywheels. My guess is any company which tries this will go bankrupt.

          1. I seem to recall some talk about using kinetic storage for electric cars.

            1. Compressed air is more intriguing to me.

              1. I store all of my excess energy in neutrinos that I keep in a singularity next to my bed.

                1. I store all of my excess energy in neutrinos that I keep in a singularity next to my bed.

                  A.K.A. Your wife?

                  1. My wife lacks the mass to achieve a singularity.

                    1. Give her five years.

        2. Molten salt. I don’t care if it’s actually workable in light of the fact that “molted salt” just sounds cool.

          And there is a lot of neat secondary uses of superheated salt, like making pretzels explode into carbohydrate cinder death knot fireballs!

  9. I actually mused about something similar while driving home one day.
    Could a windmill be combined with a flywheel to provide constant energy?
    The flywheel drives the generator and the windmill drives the flywheel. Excess is stored as kinetic energy in the flywheel.
    The biggest problem is that friction is a bitch, not to mention that a flywheel an incredibly bulky an inefficient means of storing energy.
    It would make a lot more sense to store the excess as chemical energy in batteries, as is currently done.
    Why reinvent the wheel? (pun intended)

    So I dropped the idea and mused about something else.

    Only a politician could be convinced that something like that is a good idea.

  10. Beacon Power manufactured and operated large flywheels with the goal of storing excess power.

    Nobody ever went broke underestimating the intelligence of the American people politician. I hope the storage capacity of these things is calibrated in “Barnums”.

  11. “I don’t get it. The whole point of the loan guarantee program is it was designed to help companies that weren’t quite ready to get a commercial loan,” he said.

    I’m not quite ready to get a $100 million loan either. Can I get the taxpayers to front me?

    Heh. I’ll bet I could if I promised to give the Obama re-election campaign a nice big cut.

  12. I know this is late bu:

    “Flywheel energy storage” is a retarded idea.

    1. If the system didn’t have any inertia, it could be useful for reacting to short term mismatch between generation and load (otherwise, frequency would be all over the map and the interconnection would fall apart).

      Thing is, most of the generation out there does have inertia and frequency response, and it doesn’t scale up enough to deal with medium-term mismatch.

  13. what’s that looks like?

  14. I wish that the reporters at either “Science” or “Scientific American” had Ron Bailey’s penchant for clarity and his insight. This is a great example of America’s best science reporter’s work. Awesome!

Please to post comments

Comments are closed.