by Lindsay Riddell, San Francisco Business Times

Zenergy Power Inc. has invented a cure for the common blackout.  

The South San Francisco-based company shipped its first commercially available fault current limiter — essentially a trailer-sized surge protector for the power grid — to Southern California Edison last week.

The company’s device absorbs electrical power surges that cause blackouts, potentially saving utilities billions of dollars in repairs and replacement of damaged equipment. The company did not pay to test the device, which was partially funded by the Department of Energy and the California Energy Commission.

Zenergy’s device is being installed in Southern California Edison’s Avanti circuit, called the “circuit of the future.” The circuit powers about 1,400 homes and businesses in the Inland Empire and serves as a testing ground for advanced grid technology.

Once Zenergy has proven its technology at the neighborhood circuit breaker level, the company plans to build larger models that can absorb higher voltages of power for the larger distribution grid — the big towers that carry bulk power long distances, for instance, from power plants in the desert to city centers. Because that equipment is far more expensive than the equipment that carries power within neighborhoods, the savings that could be provided by larger fault current limiters grows exponentially.

“I could imagine that Edison could potentially, at this higher level, need dozens or a hundred of them depending on how that works out,” said Russell Neal, who oversees the Avanti circuit for Southern California Edison. He said the utility was testing several types of fault current limiters made with varying technology from different distributors, but that Zenergy was the first to connect its device. The full connection will occur in the first quarter of 2009 and testing will take place for six months.

Zenergy’s surge protectors use high-temperature superconductors — materials that conduct electricity with no resistance — to capture a power surge (or fault current) temporarily, giving circuits that control a power substation a chance to shut down and protect equipment.

The power surges occur more frequently as more sources of energy, like solar panels and wind turbines, tie into the grid and as utilities look to connect more homes and businesses within densely populated areas to each circuit. And as more states pass renewable mandates requiring utilities to load up the grid with renewable power, power surges are more likely, said Larry Masur, vice president of business development for Zenergy Power Inc. The Electric Power Research Institute estimates that blackouts cost the U.S. economy between $104 billion and $164 billion every year.

“The other choice you have is bigger and bigger breakers that get more and more expensive or air core reactors,” said Zenergy CEO and founder Woody Gibson. “All of that is really inefficient.”

He said Zenergy’s fault current limiter reacts within one-quarter of one-sixtieth of a second after detecting a power surge.

“We’re talking fast,” Gibson said.

Gibson said the company is nearing announcements on orders from utilities. The company also won a contract in March from the U.S. Department of Homeland Security to study the use of Zenergy’s fault current limiters on New York City’s power grid.

Analyst Walter Nasdeo said the market for the fault current limiter is about $5 billion a year and Zenergy could capture a hefty piece of that market if it continues as planned by selling large orders to utilities.

“You start talking about utilities, and you’re not talking about five or 10 units,” he said. “They have a significant amount of capital expenditures they need to go through to maintain their systems.”

Zenergy said it can manufacture the fault current limiters within four to six months of getting an order. They cost between $1 million and $1.5 million today, but that is expected to decrease when Zenergy ramps up production.

But Nasdeo also said Zenergy is a small company and if utilities decide to delay their orders, it could hurt the company.

Gibson started San Mateo-based SC Power Systems Inc. with San Francisco-based merchant bank Jane Capital Partners in 2004. They formed London-based Zenergy Power Group, a financial holding company, to buy SC Power and two other companies that manufacture and develop commercial applications for superconductive materials. The SC Power unit changed its name to Zenergy Power Inc. and moved to South San Francisco in early 2008. Most of the research for the company’s products is done in Germany as is the manufacturing of the giant magnets used in the fault current limiter.

The holding company is listed on the London Alternative Investment Market.

Zenergy won an $11 million grant through the Department of Energy to research and design the device, as part of the government’s $50 million commitment to a better secured power grid.

The company also is working on applications of its high-temperature superconductors for wind turbines and hydroelectric dams. Its superconducting coils will be used in the world’s largest wind turbine — the Britannia project — off the coast of England, which will be installed in 2010. The 7.5 megawatt turbine can power about 5,500 homes.

Zenergy Power Inc.

Location: South San Francisco.
Established: 2004 as SC Power Systems.
Employees: 14.
CEO: Woody Gibson.
Technology: High-temperature, superconducting, fault current limiter, or a giant surge protector for the grid.

Original article.

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