NEWS OF THE WEEK
DOE LOAN PROGRAM SCRUTINIZED
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SECOND DEPARTMENT OF ENERGY loan
guarantee recipient has gone bust. Beacon Power, a Massachusetts-based developer and manufacturer of flywheels to provide backup electricity to the grid, filed for bankruptcy protection on Oct. 30. Unlike Solyndra—the much-discussed bankrupt solar manufacturer, which began auctioning off its plant and equipment last week—Beacon Power will continue operating, although its stock value has plummeted and all employees have agreed to a 20% wage cut. Beacon’s announcement came days after the Obama Administration said it will conduct a 60-day audit of the DOE loan program and its portfolio of $36 billion in loans and guarantees. In a statement, White House Chief of Staff William M. Daley said the independent audit will be led by Herbert M. Allison Jr., who oversaw the Troubled Asset Relief Program and who led mortgage provider Fannie Mae after it entered conservatorship. Allison is likely to enlist a team of outside experts, Daley said, and will examine enhancements and an early warning system for the loan program. “President Barack Obama remains committed to clean energy investments,” Daley stressed, “because he BEACON POWER
An energystorage flywheel and housing are lowered into a test cell at Beacon Power’s manufacturing facility in Tyngsboro, Mass.
CLEAN ENERGY: Another energy firm files for bankruptcy as Administration announces 60-day audit
understands these technologies will either be created here or in other countries.” DOE stood behind Beacon Power and its flywheel technology, which supplies electricity to stabilize grid power and mitigate load fluctuations. Flywheels are “charged,” DOE explains, using surplus electricity and then “discharged” to spin turbines and generate electricity for the grid when demand exceeds supply. The Energy Department attributed Beacon Power’s failure in part to the declining price of natural gas, which is also used to provide backup electricity. DOE provided $43 million in loan guarantees to Beacon Power to build a flywheel technology demonstration facility in New York. The plant is complete, says company spokesman Gene Hunt, and has drawn down $39.5 million of the loan guarantee. In addition, the company received a $24 million DOE grant to build a similar facility in Pennsylvania but has used little of that money. It also won a $2.25 million award through DOE’s Advanced Research Projects Agency-Energy for further R&D. Meanwhile, the House Energy & Commerce Committee’s Republican leadership is continuing to investigate Solyndra and DOE’s loan guarantee program. The committee has ordered the Administration to turn over all material since Obama first took office that relates to the program and the Solyndra loan guarantee, but the White House has refused. In a letter to the committee, Kathryn H. Ruemmler, counsel to the President, said some 70,000 pages of internal documents have already been given to the committee, and Administration staff have attended nine committee briefings as well as testified at many committee hearings. She added that the most recent House committee request carries significant confidentiality concerns for the President. Late last week, however, on a 14 to 9 party-line vote, the committee gave Chairman Fred Upton (R-Mich.) the authority to subpoena all internal White House material that pertains to Solyndra. The committee also announced Energy Secretary Steven Chu will testify Nov. 17 on the loan program.—JEFF JOHNSON
CYBER SECURITY Software firm identifies hacking program against chemical makers A cyber-attack campaign emanating from China targeted private companies involved in the research, development, and manufacture of chemicals and advanced materials between July and September of this year, according to a report from the computer security company Symantec. The firm claims the campaign, which it has dubbed the “Nitro” attacks, targeted intellectual property and followed similar attacks on nongovernmental organizations and the auto industry. Twenty-nine companies in the chemi-
cal sector were confirmed targets in the attack, according to the report, along with 19 firms in other industries including defense. Symantec says the hackers operated by sending e-mails purporting to be meeting invitations from established business partners. Opening the e-mails could have triggered a program called Poison Ivy that passed through networks and computers—primarily to obtain administrator credentials and access codes. Symantec says the attacks have been traced to a “20-something male” in
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China’s Hebei region. The firm called the man Covert Grove after the English translation of his Chinese name. The report prompted a response from the American Chemistry Council, a major U.S. industry trade association, stating that its members have spent nearly $10 billion to enhance facility, transportation, and cyber security since 2001. ACC also hosts a member networking group, the Chemical Information Technology Center, to address cyber-security related issues.—RICK MULLIN
