New Bedford poised to be alternative energy epicenter

NEW BEDFORD — In the face of Konarka’s bankruptcy and the closure of Ze-Gen’s research facility, green energy champions are still optimistic about the city’s role in alternative energy advances in the future.
“New Bedford has been and will continue to be home to the test bed of ideas and innovation,” said Matthew Morrissey, executive director of the New Bedford Economic Development Council, emphasizing that the closure of two facilities does not constitute a trend.
“You’re going to see challenges, you’re going to see failures, and you’re going to see successes.”
Thomas G. Davis, executive director of the Greater New Bedford Industrial Foundation which oversees the New Bedford Business Park, added that where Konarka was located, “renewable energy is alive and well,” citing several other successful alternative energy companies in the park.
Konarka Technologies Inc., developer of thin-film solar panels, filed for bankruptcy protection at the beginning of June, laid off 25 employees at its facility in a former Polaroid building in New Bedford Business Park and has plans to liquidate the business. The company was unable to secure additional financing, said president Howard Berke.
Ze-Gen, a Boston-based company that was developing liquid metal gasification technology by converting municipal waste into a synthetic gas, was testing its technology at a 12-employee facility in New Bedford. Morrissey confirmed the test facility was no longer operating, though exactly when it closed was not certain.
There is speculation that the facility’s Department of Environmental Protection Research and Development permits expired and it ceased operations as expected. However the company as a whole experienced a huge setback with a failed attempt to establish a $15-million permanent plant in Attleboro, where local environmental groups were voicing opposition.
Ze-Gen CEO Walter Howard said the company wanted to allocate resources to developing projects in locations with stronger energy markets more receptive to the deployment of alternative energy technology. Those other projects never materialized.
Morrissey said the situations of Konarka and Ze-Gen were similar, in that both companies were in their pilot stages, without the proper investment climate to sustain them through the costly — and risky — research and development period. Even with a promising product, investors cannot be sure what will work, and a lot of capital is needed to start up that first plant, he said.
“The market being as soft as it is right now…This was not possible.”
While the failures of Konarka and Ze-Gen are not necessarily tied to a trend, alternative energy companies do face unique challenges, said Dr. Michael Goodman, professor of public policy at UMass Dartmouth.
One of the major issues is the cost of alternative energy — right now it’s higher than traditional sources, like coal and oil.
“Businesses and people are looking to save money wherever possible, so at this point in their development, alternative energy . . . really isn’t competitive in terms of the price,” Goodman said.
Government subsidies are necessary in order to even out the cost, he added.
According to a Congressional Budget Office study, renewable energy subsidies were 6.4 times greater than fossil fuel subsidies in fiscal year 2011. Of the $24 billion in federal subsidies for energy — a combination of tax preferences and Department of Energy spending programs — $16 billion was spent on renewable energy and energy efficiency, compared to $2.5 billion on fossil fuels.
Goodman said that the environmental costs of dirtier types of energy production are not built into the price of that energy.
“I do know that the fact that polluters are not required to compensate society for the damage they’re doing is in fact a subsidy,” he said.
Goodman recommends a carbon tax or cap and trade to put a price on pollution, which would drive up the cost of fossil fuels and give alternative energy a “fair competition.”
But, he said, “We’re not really in a place that there’s either a political or financial will to do that.”
Goodman added that lower production costs in other parts of the world also make it hard for companies based in the United States to compete.
Still, he said, there are potential niche opportunities in alternative energy in the areas of technology development and research.
“In the New Bedford area in particular . . . offshore wind has potential as well,” Goodman said.
Morrissey agreed, saying that various companies and partnerships are coming down the pipeline in this sector, including an upcoming June 29 meeting between a local company and a major offshore energy provider.
“The reality is it’s coming and we are positioned to be the first in the nation to be home for (offshore wind) deployment,” Morrissey said.
“There’s plenty of opportunity for future success.”
By Jennifer Lade
Bulletin correspondent
June 22, 2012 1:56 PM
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