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Heritage Foundation List of Failing or At-Risk Taxpayer Energy Ventures (34 companies, $7.5 billion, and counting)

The Heritage Foundation (founded 1980) is a think-tank leader in the current debate over energy policy and related environmental issues. Heritage’s energy worldview is stated at their website:

Energy and environmental policy is a national priority. Lawmakers should implement a long-term plan that allows free markets to balance supply and demand, ensures reliable and competitively priced energy for the future, and creates incentives for responsible stewardship of the nation’s resources and environment.

A recent report, “President Obama’s Taxpayer-Based Green Energy Failures,” lists 34 examples of “faltering or bankrupt green-energy companies” (with * denoting companies that have filed for bankruptcy). The at-risk total is approximately $7.5 billion, of which $1.6  billion is in receivership.

The numbers will only get higher. Yesterday, it was reported that the Solyndra loss could be $849 million (not $535 million). And there might be a rush after the election with or without an extension of the Production Tax Credit.

Here is the Heritage Foundation list:

  1. Evergreen Solar ($25 million)*
  2. SpectraWatt ($500,000)*
  3. Solyndra ($535 million)*
  4. Beacon Power ($43 million)*
  5. Nevada Geothermal ($98.5 million)
  6. SunPower ($1.2 billion)
  7. First Solar ($1.46 billion)
  8. Babcock and Brown ($178 million)
  9. EnerDel’s subsidiary Ener1 ($118.5 million)*
  10. Amonix ($5.9 million)
  11. Fisker Automotive ($529 million)
  12. Abound Solar ($400 million)*
  13. A123 Systems ($279 million)*
  14. Willard and Kelsey Solar Group ($.7 million)
  15. Johnson Controls ($299 million)
  16. Schneider Electric ($86 million)
  17. Brightsource ($1.6 billion)
  18. ECOtality ($126.2 million)
  19. Raser Technologies ($33 million)*
  20. Energy Conversion Devices ($13.3 million)*
  21. Mountain Plaza, Inc. ($2 million)*
  22. Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million)*
  23. Range Fuels ($80 million)*
  24. Thompson River Power ($6.5 million)*
  25. Stirling Energy Systems ($7 million)*
  26. Azure Dynamics ($5.4 million)*
  27. GreenVolts ($500,000)
  28. Vestas ($50 million)
  29. LG Chem’s subsidiary Compact Power ($151 million)
  30. Nordic Windpower ($16 million)*
  31. Navistar ($39 million)
  32. Satcon ($3 million)*
  33. Konarka Technologies, Inc. ($20 million)
  34. Mascoma Corp. ($100 million)

The report’s conclusion speaks to the above, but it also wise words for other government forays into for-profit areas where a vibrant market exists:

The government’s picking winners and losers in the energy market has cost taxpayers billions of dollars, and the rate of failure, cronyism, and corruption at the companies receiving the subsidies is substantial. The fact that some companies are not under financial duress does not make the policy a success. It simply means that our taxpayer dollars subsidized companies that would’ve found the financial support in the private market.

5 comments

1 Ed Reid { 10.23.12 at 7:15 am }

One wonders how many of them might have been funded by Bain Capital; and, whether the results would have been different.

2 Jonathan Tross { 10.23.12 at 11:35 am }

From a free-market point of view, I reckon that a company funded by Bain Capital would be better suited to succeed than those funded by the USG. Bain risks their own capital and would have done their homework on the companies prior to writing a check. The USG, on the other hand, simply winks and nods and writes the check. The only return expected from those backed by the USG usually comes in the form of campaign donations. Sorry for the cynicism.

3 Kermit { 10.25.12 at 12:41 pm }

Department of Energy makes another losing investment. This time with Dow Chemical and its partners in the joint venture Dow Kokam.

I’ve got nothing against Dow Chemical or its partners, TK Advanced Battery (Townsend Capital), and Dassault for getting together to produce some pretty good technology for the market. Having worked with Dow on an electronics parts manufacturing subsidiary a decade ago, in Silicon Valley, I understand the business model to secure a market for high purity chemicals manufactured by Dow, as is the model for this venture http://www.dowkokam.com/presentations_resources/BeyondtheCell_16Sept10_Final.pdf with a corresponding good profit margin. That’s good business. The window for getting into such markets are often quite narrow, too early and capital sits idle, too late and market share is already lost to others. It is often just a matter of a few months in launch of the downstream business as to whether it is quite profitable, or lost opportunity with corresponding loss of investment. Particularly in the electronics industry we see new products being introduced monthly with cell phones and tablet computing at the forefront in full view of the public. Some if not many of these new products are made possible by new materials and corresponding new designs and advances in manufacturing techniques from feeder industries.

In the case of Dow Kokam, it received a $161 million grant from the Department of Energy http://news.dow.com/dow_news/corporate/2009/20090805b.htm , and later an additional $4.9 million grant http://www.dowkokam.com/news_2011_08_19-english.php as part of its funding.

Only days ago, Dow announced the closing of 20 plants worldwide and a write down for its investment in Dow Kokam http://www.bloomberg.com/news/2012-10-23/dow-chemical-considering-cutting-2-400-jobs-5-of-workforce-1-.html?cmpid=msnmoney

I love that fact that these companies are continuing to invest their own capital into R&D, and starting up new businesses, what I do not care for is MY money being used to fund a company start up.

4 Does the U.S. need a National Energy Board?Institute for Energy Research | Institute for Energy Research { 02.04.13 at 8:01 am }

[...] something for everyone—and thus special favor for politically-correct, economically-incorrect energies—will only exacerbate federal budget deficits and burden consumers. It is a recipe for [...]

5 John { 03.30.14 at 12:25 pm }

Another thing about funding by Bain. If done it would be risking ITS money. If it is a bad investment Bain Capital takes it in the neck. If it is US Government than EVERYONE in the country takes the hit if it is a bad investment.

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