US lithium ion battery maker A123 Systems filed for bankruptcy protection in a Delaware federal court Tuesday, announcing it was calling off a major deal with a Chinese auto parts conglomerate, and would sell its auto assets to fellow US battery maker, Johnson Controls. The electric-car battery maker’s filing, just hours before the commencement of the second US presidential debate, looks like manna from heaven for Mitt Romney, giving the Republican candidate fresh ammunition against Barack Obama’s green-energy policies.
As Bloomberg today points out, A123 was not one of the cleantech companies Romney called “losers” in the first debate with Obama two weeks ago (he did, however, name Fisker Automotive, Tesla Motors, Solyndra and Ener1). But he and his campaign managers will be sure to mention it now – a lot. “A123’s bankruptcy is yet another failure for the [President Barack Obama’s] disastrous strategy of gambling away billions of taxpayer dollars on a strategy of government-led growth that simply does not work,” said Andrea Saul, a Romney campaign spokeswoman, in an e-mailed statement quoted by Bloomberg on Wednesday.
The Massachusetts-based company was, however once viewed by Obama and Mass. Governor Deval Patrick as a key component of a clean-energy driven economy, says The Boston Globe, with the US DoE pouring hundreds of millions of dollars into A123, including nearly $250 million towards a battery plant in Michigan that was expected to create 38,000 jobs. “This is about the birth of an entire new industry in America – an industry that’s going to be central to the next generation of cars,” Obama said in a phone interview reported by Reuters. “When folks lift up their hoods on the cars of the future, I want them to see engines and batteries that are stamped: Made in America.”
A123 System’s decline has been attributed to the slower-than-expected uptake of hybrid and electric vehicles against the backdrop of a struggling US economy and more moderate crude oil prices, says The Boston Globe. To counter this, the company had tried to diversify, expanding into power storage for utilities and other markets, and in August it got what looked like a lifeline with a $465 million deal with China’s Wanxiang Group. That deal is now off, and A123 says it has entered into an asset purchase agreement with Johnson Controls – another battery maker that has received hundreds of millions in federal backing – which plans to acquire A123’s automotive business assets, including its two plants in Michigan, for $125 million.
In other news…
A new report released on Tuesday has estimated that global solar industry overcapacity will claim at least 180 panel makers – by way of bankruptcy or acquisition – by 2015. Reuters reports that GTM Research estimates that global solar products supply will exceed demand by 35GW on average annually over the next three years, and says the largest number of casualties will occur in high-cost manufacturing markets such as the US, Europe and Canada.
Another report has found that the UK could save £10.9 billion ($US17 billion) on its annual energy bill by 2030 with the introduction of energy efficiency incentives. Bloomberg reports that the so-called negawatt savings would reduce the need to build more wind farms, nuclear plants and fossil-fuel power stations, according to environmental policy group Green Alliance and WWF.
News that controversial American businessman Russ George dumped around 100 tonnes of iron sulphate into the Pacific Ocean as part of a geoengineering scheme is being labelled as a “blatant violation” of UN laws, after it was revealed this week by a Guardian newspaper investigation. Lawyers, environmentalists, and civil society groups say the dumping, which took place in July off the west coast of Canada, contravenes two international moratoria, and is likely to spark outrage at a United Nations environmental summit taking place in India this week.
Brazil and South Korea have been named as green business goldmines, with two new UK government reports highlighting billions of pounds of green opportunities in the emerging economies. BusinessGreenreports that the UK Trade & Investment (UKTI) published the reports earlier this week, with the Brazil study, produced by The Carbon Trust, titled Brazil: the $200bn low carbon opportunity, and identifying waste management, water treatment, automotive, ethanol and biomass among a range of burgeoning sectors.