As markets change, clean tech industry reduces ambitions

The Boston Globe reports:

In its heyday less than a decade ago, advanced battery maker A123 Systems LLC attracted hundreds of millions of dollars in government support and hundreds of millions more from investors on the promise of technology that would usher in a new era of electric cars.

In 2012, the Massachusetts company went bankrupt, its assets acquired for less than 20 percent of peak value by the Chinese-owned Wanxiang America Corp., which moved A123’s headquarters to Michigan. Today, A123’s presence in Massachusetts is limited to research centers in Waltham and Hopkinton, where engineers who once focused on systems to power electric vehicles are now developing small batteries that turn standard cars into “microhybrids” by shutting off engines when idling to save gasoline.

The saga of A123, founded on technology spun out of the Massachusetts Institute of Technology, represents the ups, downs, and scaled-back ambitions of the Massachusetts clean technology industry over the past decade as global energy markets changed dramatically. When oil prices raced toward $150 a barrel before the recession, investors, industry leaders, and state officials envisioned game-changing breakthroughs that would mean new factories building solar panels, wind farms producing power offshore, and refineries making alternative fuels from sawgrass, algae, and even garbage.

Today, with oil trading around $50 a barrel and natural gas prices at three-year lows, these dreams remain far from reality. The state’s leading solar panel maker, Evergreen Solar, went bankrupt in 2011, overwhelmed by cheaper panels made in China. Cape Wind, the proposed wind farm in Nantucket Sound, has stalled after missing a financing deadline at the end of last year. Venture investment in New England clean energy companies has plunged by almost half, to $198 million last year from $362 million in 2011, according to PricewaterhouseCoopers, the New York accounting and consulting firm.

As with A123, the clean energy sector here is undergoing an evolution, refocusing from breakthroughs that might take years and millions of dollars to incremental advances that can be achieved faster and for less money.

The failure of central planning.