Machine Design

Two sides of a green-energy failure

This issue of Machine Design has a focus on energy, with a look at developments related to efficiency, storage, alternative fuels, and the like. Last year in a similar edition, we reported on some of the research funded by the Dept. of Energy’s Advanced Research Projects Agency – Energy (ARPA-E).

Included was a story about Beacon Power and the grid-scale-flywheel energy- storage system it was developing with a $2.2 million ARPA-E grant (“Reinventing the Flywheel,” Aug. 11, 2011). A big problem with renewable energy like solar and wind is that it is intermittent and often unreliable. The massive flywheels Beacon hoped to develop were to serve as giant mechanical batteries, letting utilities store large amounts of electricity and deliver it when renewable sources are unavailable. They would have gone a long way towards bringing green energy into the mainstream.

Unfortunately, Beacon has since gone bankrupt. Worse, it also received $43–million in loan guarantees from the Dept. of Energy’s Loan Program Office (LPO), the same program that backed Solyndra, the failed solar firm that got $535 million in federal aid.

Does that mean ARPA-E is a bust? I’d like to think not. Its mission, according to the DOE’s Web site, is to focus on basic “out of the box” transformational energy research that industry, by itself, won’t support due to the risk — but where success would provide dramatic benefits for the nation.

ARPA-E’s focus is exclusively on high-risk, high-payoff concepts — technologies promising genuine transformation in the ways we generate, store, and use energy, such as biochemical-energy capture, novel battery chemistries, and revolutionary thermal-energy storage techniques.

Failure of projects like Beacon’s is to be expected, according to Microsoft Chairman Bill Gates. Speaking at an ARPA-E conference early this year, he pointed out that funding basic research naturally has a high failure rate, noting that potentially 90% of ARPA-E projects are headed for the dustbin.

But the high failure rate is why we “literally need thousands of these companies to try this,” to deliver needed energy breakthroughs, said Gates. He said the U.–S. government’s investment in energy research was woefully underfunded and, as part of the American Energy Innovation Council, called for a government investment of $16 billion per year into basic research to deliver energy innovation.

LPO, on the other hand, looks like corporate welfare. It seeks to finance the growth of the commercial “clean-energy” industry in areas such as biomass, hydrogen, solar, wind, carbon sequestration, and alternative-fuel vehicles. Its stated mission includes financing the growth of large-scale clean-energy technologies to reduce greenhouse gases and create “green” jobs, as well as reduce our dependency on foreign oil and enhance American competitiveness in the global economy.

LPO guarantees loans for clean-energy projects, agreeing to repay the debt if the borrower defaults. It also provides direct loans to eligible automobile manufacturers and their suppliers for equipment and facilities to produce advancedtechnology vehicles and components.

LPO has doled out about $35 billion, while ARPA-E was appropriated about $275 million for fiscal year 2012. It appears we have our priorities backwards.


© 2012 Penton Media, Inc.

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