Solyndra and the debate on gov’t funding

Sorry for the post delay this week. Work deadlines and school are bad combination.

This week, most of the green social media talk is on solar panel manufacturer Solyndra and it’s bankruptcy filing. Solyndra was one of the biggest recipients of US government funding (around $527m to be exact according to a NY Times article). I remembered in 2008-2009, the company was also a darling of the venture capital world.

The debate these days is whether government funding, loans and subsidies are really that helpful – both for taxpayers and for technology start-ups, especially when US lawmakers are talking about cutting spending.

According to the NY Times, two other US solar companies, American solar companies, Evergreen Solar and SpectraWatt, also sought bankruptcy protection in August. All of the companies blamed stiff competition from cheaper Chinese solar panel manufacturers as well as ongoing bad economy. When it comes to the business of chemistry, I like Cleantech Chemistry blog‘s explanation on how Solyndra’s product economics failed driven by ramped up of polysilicon and solar modules capacity around the world.

Regarding DOE financing, an interesting perspective was posted by Greentech Media on Solydra’s share of the total DOE solar funding, which the blog said was 3.4% of the DOE solar portfolio.

Now, the green blog has been putting out news lately of further US grant and loan announcements on the development and commercialization of carbon capture technologies, advanced biofuel and renewable chemicals, and also in solar technologies. You would think that the Solyndra story could have paused these fundings? Think again.

Just last week, the Department of Energy (DOE) announced funding up to $12m in three-small scale projects from LanzaTech, Virent Energy Systems and Research Triangle Institute, which aims to accelerate development of drop-in biofuels and biobased chemicals.

Just for background here, LanzaTech will receive up to $4m to convert biomass-based ethanol into jet fuel; Virent will receive up to $4m to convert biomass into oxygenated chemical intermediates; and Research Triangle Institute will receive up to $4m to integrate thermochemical and hydroprocessing technologies that will help produce biomass-based gasoline and diesel.

Also last week, the DOE plans to plunk $41m to 16 projects that will develop post-combustion technologies for carbon capture from coal-fired power plants within a span of 3 years. Some of the companies that capture the blog’s attention here were Novozymes, GE Global Research, and W.R. Grace.

Archer Daniels Midland (ADM), a big recipient of a 2009 carbon capture DOE funding ($141m to be exact), recently broke ground on the construction of the US’ first large scale industrial CCS facility in Decatur, Illinois. The facility is expected to capture and store 1m tons/year of carbon dioxide coming from cron-based ethanol biofuel processing from nearby plants. The capture and storage is expected to begin in late summer 2013.

Some of the renewable chemical companies that I’ve talked to about CCS noted that it is actually better for the DOE to just fund development of the use of waste CO2 and convert it into something useful (and profitable) than have it stored on the ground.

Back to recent government funding announcements,  the blog posted last week a biofuel development and commercialization investment of up to $510m coming from the DOE, US Department of Agriculture (USDA) and the US Navy. The agencies plan to collaborate with private firms that will match the investments to construct or retrofit several drop-in biofuel plants and refineries.

And finally this first week of September, the DOE are awarding more than $145m in 69 solar projects. The projects are expected to improve materials, manufacturing processes and supply chains for a wide range of photovoltaic solar cells and solar energy system components. Dow Chemical, GE, and Owens Corning are the recipients that stood out for the blog.

I’ve actually asked some of the companies that I’ve covered in the green chemicals/biofuel field regarding the necessity of government grants/loans. All agree that they are helpful especially when it comes to advancing new technologies but to a point. All also agree that a business cannot and must not rely on these grants/loans and especially subsidies.

But then the field of renewable chemicals could be a little different compared to cleantech energy and biofuels. Come to think of it, renewable chemicals do not really get as much funding as renewable energy/biofuel funding anyway.

addthis_pub = ‘greenchicgeek’;

Leave a Reply