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  Beacon Power Corp.
Company Information
Beacon Power Corp.
Symbol: BCON
Exchange: NASDAQ
Sector: Alternative Energy
Share Related
S/O: 120,740,000
Float: NA
52 Wk: .28 - $1.10
Recent: 1.05
Contact Information
Contact: Investor Relations
Phone: (978) 694-9121
Fax: NA
E-mail: Click Here
Website: Click Here

Company Profile

The Company

Beacon Power is a global leader in the development and commercialization of flywheel-based energy storage solutions for grid-scale frequency regulation services and other utility-scale and unitary energy storage applications. BCON's goal is to use its environmentally sound flywheel technology to deliver superior performance at lower cost, and generate long-term value for the Company, its stakeholders, and society. With today's urgent need for clean energy solutions that do not burn fossil fuel, Beacon Power is well positioned to provide sustainable solutions for a broad range of energy-balancing applications in multiple global markets.

In 2008, Beacon began the commercial production and deployment of its patented composite flywheel technology for grid-scale frequency regulation. The Company's primary business model is to be an integrated provider of frequency regulation services by building, owning and operating flywheel-based frequency regulation plants on a merchant basis. BCON also plans to have co-investors for some of its regulation plants, and to sell some plants outright in parts of the world that lack open bid markets for frequency regulation services.

While BCON's initial market entry application is grid-scale frequency regulation, the Company is actively exploring other grid-scale and unitary equipment applications for its core technology. We plan to commercialize new applications as our production costs decrease and policy and regulatory reforms create attractive market economics for selected applications.

About Flywheel Energy Storage

Flywheel energy storage works by accelerating a cylindrical assembly called a rotor (flywheel) to a very high speed and maintaining the energy in the system as rotational energy. The energy is converted back by slowing down the flywheel. The flywheel system itself is a kinetic, or mechanical battery, spinning at very high speeds to store energy that is instantly available when needed.

At the core of Beacon's flywheel is a carbon-fiber composite rim, supported by a metal hub and shaft and with a motor/generator mounted on the shaft. Together the rim, hub, shaft and motor/generator assembly form the rotor. When charging (or absorbing) energy, the flywheel''s motor acts like a load and draws power from the grid to accelerate the rotor to a higher speed. When discharging, the motor is switched into generator mode, and the inertial energy of the rotor drives the generator which, in turn, creates electricity that is then injected back into the grid. Multiple flywheels may be connected together to provide various megawatt-level power capacities. Performance is measured in energy units - kilowatt-hours (kWh) or megawatt-hours (MwH), indicating the amount of power available over a given period of time.

Beacon's Smart Energy 25 flywheel has a high-performance rotor assembly that is sealed in a vacuum chamber and spins between 8,000 and 16,000 rpm. At 16,000 rpm the flywheel can store and deliver 25 kWh of extractable energy. At 16,000 rpm, the surface speed of the rim would be approximately Mach 2 - or about 1500 mph - if it were operated in normal atmosphere. At that speed the rim must be enclosed in a high vacuum to reduce friction and energy losses. To reduce losses even further, the rotor is levitated with a combination of permanent magnets and an electromagnetic bearing.

Beacon Power's grid-scale Smart Energy Matrix is made up of multiple integrated systems of (10) Smart Energy 25 flywheels, interconnected in an array, or matrix, to provide energy storage for certain utility applications. The Smart Energy Matrix can absorb and deliver megawatts of power for minutes, providing highly responsive frequency regulation capabilities for increased grid reliability.

A Word About Sustainability and Energy Storage

Sustainability is a philosophy and set of practices that have gained considerable acceptance among global organizations in recent years. The concept of sustainability refers to business conduct that addresses the economic, social and environmental impacts of operations; the so-called "triple bottom line." More than 50% of Fortune 100 companies have adopted sustainable business practices and issue comprehensive annual progress reports. These companies, including many in the energy sector, are taking a longer-term view that considers the total impact of a product or service, from development through end-of-life.

Flywheel-based energy storage systems, unlike fossil-fuel power plants that are used on the grid for frequency regulation, are sustainable "green" technology solutions that consume no fossil fuel, nor produce CO2 or other emissions during operation. Further, Beacon's flywheels operate reliably for many years with little or no maintenance, making them a true sustainable technology solution.


Frequency Regulation

To ensure a functional and reliable grid, the Independent System Operators (ISOs) that operate the various regional grids must maintain their electric frequency very close to 60 hertz (Hz), or cycles per second (50 Hz in Europe and elsewhere). When the supply of electricity exactly matches the demand (or "load"), grid frequency is held at a stable level. Grid operators, therefore, seek to continuously balance electricity supply with load to maintain the proper frequency. They do this by directing about one percent of total generation capacity to increase or decrease its power output in response to frequency deviations.

Not all generators can operate reliably in such a variable way. Changing power output causes greater wear and tear on equipment, and fossil generators that perform frequency regulation incur higher operating costs due to increased fuel consumption and maintenance costs. They also suffer a significant loss in "heat rate" efficiency and produce greater quantities of CO2 and other unwanted emissions when throttling up and down to perform frequency regulation services.

Over the last decade, Beacon Power, in conjunction with the U.S. Department of Energy (DOE), California Energy Commission (CEC), the New York State Energy Research and Development Authority (NYSERDA), and various ISOs, has developed an advanced flywheel-based energy storage technology to perform fast-response frequency regulation. This technology has highly attractive performance attributes, low variable operating costs, and produces zero direct CO2 greenhouse gas or other emissions.

Other Flywheel Applications

    Cloud Mitigation for Solar PV
Power outputs from solar photovoltaic (PV) assets are subject to rapid fluctuations due to clouds. A passing cloud, for example, can easily decrease PV power output by 80 percent or more within seconds. Conversely, as the cloud passes, power output can increase just as rapidly. Most PV resources are interconnected at distribution voltages, and such power fluctuations can cause unacceptable voltage disturbance. Depending on local conditions, utilities may refuse to allow a PV resource to interconnect unless something is done to mitigate these fast ramps in power output. Beacon''s flywheel technology has the ability to buffer these fluctuations and, where they are unacceptable to the local distribution utility, our energy storage can neatly solve the problem.

    Ramp Mitigation for Wind
A safe, reliable and energy-efficient modern grid should be capable of integrating pollution-free renewable energy resources on a large scale without causing deterioration of generation, transmission or distribution operations. Renewable Portfolio Standards have been put in place at the state level to encourage greater market penetration of wind and solar power. However, the variable nature of these resources poses a challenge. For example, in one western state, wind developers filed plans to add new wind capacity that exceeds the current peak load of the region. Without a new and more effective approach for integrating variable wind resources, the deployment of wind power could be severely curtailed.

Fast ramp-rate flywheel energy storage systems can be coordinated as part of an integrated energy balancing system that includes variable wind generation, slower-ramping conventional fossil generation, and demand response resources. Such a system could be effective in leveling out the big peaks and valleys that adding more wind generation is expected to create. Flywheel-based energy storage could act as both a buffer and balancing resource between variable wind generation, slower-ramping conventional fossil generation, and various fast- and slow-acting demand response resources. Flywheel energy storage offers an excellent set of features to accomplish this new energy balancing application. These include a ramp rate up to 100 times faster than conventional fossil-fired generation plants; high-cyclic capability without any degradation of energy storage capacity over time; low maintenance; zero fuel consumption and no direct CO2 emissions; no use of toxic materials; and a 20-year life.

    Wind/Diesel/Flywheel Hybrid
The number of wind/diesel power systems operating around the world continues to increase at a rapid pace. A wind turbine placed in parallel with a diesel generator works to reduce the fuel used by that generator by allowing it to be shut down when wind power exceeds load. However, when load approximately matches available wind power, the generator must be kept at idle for the occasional event when wind power drops for a few seconds or minutes below connected load. This mode of operation is not very efficient, since much of the diesel generator''s time is spent either at idle or inefficient low power settings.

The introduction of energy storage can act to further reduce diesel fuel consumption by using the stored energy to provide both load following and supplying the occasional shortfall, while leaving the generator turned off. Beacon''s flywheel energy storage should be ideal for this application thanks to its low maintenance, long design life, high cycling capability without any degradation in storage value, its ability to respond almost instantaneously (thus improving load following), and its ability to provide real and/or reactive power.

    Stabilization of Distributed Generation (DG) Systems
Functionally, Beacon's flywheel technology can supplant the grid with respect to the grid's normal provision of a synchronization signal. Our technology can also provide load following capability above the capacity rating of the DG asset, as well as voltage and reactive power support and control. For Combined Heat and Power (CHP) systems, Beacon's technology has the potential to facilitate the use of natural gas reciprocating engines and/or gas turbines as part of a CHP system, by improving these systems'' ability to follow fast-changing loads. The benefits to grid operators would be to improve the ability of the DG asset to operate on an islanded basis during a blackout, as well as to reduce emissions.

    Peak Power Support
A large number of applications exist that collectively can be categorized under "peak power support." For example, oil drilling rigs typically maintain a number of diesel power systems to meet the peak power needs of an oil drilling platform. Collectively, much of this diesel power capacity stands idle or operates at a low capacity factor (often with high emissions) based on the irregular power demands of drilling. A flywheel system could augment the capacity of the diesel generators, thereby making it possible for fewer diesels to meet peak power demand requirements. The economics of this application are based on the ability to reduce the needed investment in power generation assets. Added value may derive from reduced wear and tear on generating equipment and reduced air emissions, especially in ecologically sensitive areas and/or air basins currently operating outside of EPA-mandated air pollution limits.

    Frequency Response Reserve (FRR)
When there is a sudden loss of a power plant, transmission line or distribution line, a rapid drop in grid frequency can occur. While most generators must be able to compensate for a rapid drop in frequency on a fractional basis according to their capacity rating, some parts of the grid lack sufficient frequency response resources, either because there is not enough fast-response generating capacity, and/or because of transmission constraints.

Beacon's 20 MW frequency regulation plants have the inherent ability to provide frequency response support without compromising the efficacy of the primary frequency regulation application. As with the other potential secondary overlay applications for our flywheel regulation plants, the economics of this application will compete with other technology solutions on the basis of incremental versus stand-alone cost. Since nearly all the equipment needed to provide FRR is already built into a 20 MW frequency regulation plant, the economics of this application are potentially quite attractive.

The Western Electricity Coordinating Council, which is responsible for coordinating and promoting electric system reliability across 14 western states between Canada and Mexico, is currently evaluating the possible inclusion of a 30-second tariff for FRR.

    Voltage Support for Rail Systems
As the number of passengers carried by rail increases, trains become heavier, the spacing between trains decreases and rail systems become more prone to voltage drops that impair performance and reliability. While substations can be upgraded to add power conditioning equipment, space constraints and the related difficulty of increasing local power distribution can make it very costly to upgrade some substations. Another solution would be to install flywheels to boost voltage. Our flywheel systems can be located in places where the voltage sag is severe. For retrofit of existing rail systems or construction of new light rail transit systems, installing flywheels at strategic trackside locations can support voltage and reduce both the number and cost of substations required. Reduction in the number of substations needed and associated savings in equipment, land and maintenance may provide an attractive economic basis for installation of our flywheel systems. Another related secondary application for rail systems is regenerative braking. Most new trains are designed to use regenerative braking to generate electricity as they decelerate. Instead of wasting this energy by sending it to a resistive load bank, our flywheels can be used to capture that energy. Savings would derive from lower energy costs, reduction in peak power demand charges, and reduced maintenance on brake systems.

    Uninterruptible Power Supply (UPS)
A global industry exists for Uninterruptible Power Supply (UPS) systems. Beacon''s flywheels have the capability to supply highly reliable backup power. As a replacement for battery-based UPS systems, flywheel technology has the advantage of being virtually maintenance-free compared to maintenance-intensive and less-reliable battery-based UPS. The challenge for market acceptance of flywheel-based UPS is cost. As Beacon scales up production of its flywheels for frequency regulation, we expect to lower costs based on the learning curve and volume production effect. Over time, we expect to be able to participate in the global UPS market in a variety of sub-applications, especially those requiring very high reliability and minimal need for maintenance. Our core technology can also be used as part of a flywheel design with a higher power-to-energy ratio, cost-effectively aligning with some UPS application requirements.

    Angular Instability Control
A safe, reliable and energy-efficient modern grid should be capable of automatically detecting and mitigating grid-wide conditions that can lead to wide-scale blackouts. Despite extensive engineering efforts, modern power infrastructures remain vulnerable to the phenomenon of angular instability. Angular instability is essentially a low-frequency (usually less than 1 Hz) undamped power fluctuation traveling from one end of a power grid to the other end. This traveling wave cannot be easily damped and can take up significant capacity on transmission lines. If the low-frequency oscillation could be damped, the transmission line capacity could be restored making it easier to relieve congested lines or reduce possible grid instability. In the past, this type of instability has been linked to wide-scale regional blackouts costing billions of dollars in lost productivity, goods and services. A flywheel energy storage system, combined with phasor measurements and an integrated communications and control network, has the potential to overcome this vulnerability and prevent such blackouts.

Analysis conducted by the Pacific Northwest National Laboratory (PNNL) of the August 10, 1996, blackout indicates that a Phasor Measurement Unit (PMU)-based Wide Area Measurement System (WAMS) could have provided a 6-minute warning prior to separation of the then-Western System Coordinating Council (WSCC) system into four islands. With a lead time of six minutes, the opportunity exists for real-time control actions designed to damp out the system oscillations. In the case of the August 10, 1996, blackout, system separation might have been avoided if the oscillations of the California-Oregon Intertie had been damped to a sufficient degree. Damping of oscillations may be achieved by fast injection of real and reactive power at a frequency similar to that of the oscillations.

Application of flywheel energy storage for angular instability control could be done as a standalone application, or as an application "overlay" on top of one or more multi-megawatt flywheel regulation power plants. A new revenue model would need to be created for the angular instability control application before it can be commercialized. Such precedent exists for the purchase by ISOs of key grid services, e.g., black start capacity, that are considered essential to reliable operation of the grid.

    Reactive Power Support (VAR support)

Reactive power support can be provided on either a unitary or small-system basis, or as a secondary overlay application for a full-scale 20 MW frequency regulation power plant. For industrial and commercial end users, potential benefits include lower fees from utilities resulting from improvement of power factor levels that would otherwise fall below specified minimums, as well as higher power quality for sensitive industrial and commercial applications. For grid operators or utilities, potential benefits include the ability to defer investments in transmission and/or distribution infrastructure.

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