American Superconductor: Hooking Up the Grid

By Jeff St. John

After decades of technical development, superconductors – materials that can carry far more electricity than similarly sized copper wires – are being integrated into electricity transmission and distribution grids.

On Monday, American Superconductor Corp. (AMSC) announced its biggest sale yet of superconducting wire meant to transmit electricity at high voltages across long distances – 80,000 meters of wire going to South Korea.

The wire will be used by LS Cable to make cable for a distribution system for national utility Korea Electric Power Corp. (KEP), expected to be up and running in 2010. It's the single biggest superconductor wire order ever, meant to create the longest-ever superconductor distribution system, nearly a half-mile long, American Superconductor announced.

While the Devens, Mass.-based company was founded in 1987 to commercialize superconductors, it now makes most of its money licensing its wind turbine designs to other manufacturers – mainly Chinese companies at this point – and selling ancillary power equipment (see American Superconductor: The Quiet Wind Player).

Still, the company's superconductor wires, which can carry up to 150 times more electricity than similarly sized copper wires, are in use in a number of grid applications.

In 2006, utility American Electric Power (AEP) installed superconductor cable using American Superconductor's wires for distribution-level system. And in July, New York's Long Island Power Authority started up the first underground transmission voltage level superconductor cable system using the company's wires.

Despite the extra cost of making and cooling the high-temperature cables, the savings in delivering power in a narrow underground right of way, rather than through massive overhead transmission lines, made it worth the utility's while, said Jason Fredette, American Superconductor director of investor and media relations.

That project, along with the South Korea project, puts the company "on the threshold of commercial success with superconducting cables," he said – though he added that he expects utilities to wait for such projects to be proven in the field before that happens.

Beyond transmission, superconducting cables have characteristics that suit them for use as fault current limiters to prevent current surges caused by grid breakdowns. That's because superconductors actually stop being superconductors and start resisting current when that current grows too great.

London-based superconductor company Zenergy Power [AIM: ZEN] announced Monday that it had landed a contract to provide a superconductor fault current limiter to Consolidated Edison.

The New York utility wants to test the system as part of the $39 million, Department of Homeland Security-funded project HYDRA, which aims to give New York City's power grid the ability to withstand disruptions either natural or man-made.

IN 2007, Zenergy subsidiary SC Power, based in Sam Mateo, Calif., got $500,000 from the California Energy Commission, along with $11 million from the Department of Energy, to study the technology for California's power grid.

That DOE funding round also included a total of $21.7 million for American Superconductor to develop fault current limiter and power delivery equipment, and the company has worked on project Hydra as well.

Of course, utilities are notorious for being slow to adopt new technologies. Both American Superconductor and Zenergy have faced losses in recent quarters as they've sought to build up their utility business.

American Superconductor in February reported a loss of $17.9 million for the first nine months of fiscal year 2008, compared to a $23.6 million loss in the same period in 2007. Revenue for the first nine months of 2008 grew to $109.8 million from $62.5 million in the same period in 2007.

Zenergy reported a loss of €2.5 million ($3.2 million) on revenues of €1.04 million ($1.3 million) for the first six months of 2008, compared to a loss of €1.8 million ($2.3 million) on revenues of €94,000 ($122,000) in the first six months of 2007.

Comments

[LKofScotland:]

interesting article. obviously electric utilities are usually by definition huge losers in financial based recessions. having said that, Uncle Sam isn't standing idly by this time and indeed is at the forefront of recovery. That is clearly life-saving news to emerging industries such as the superconductor business. Clearly it is "the future" as in the most efficient and SECURE way to transfer electricity from producer to consumer which is all the grid is suppose to do. Having said that financing such change is expensive--as the article noted we're only talking one half a mile of grid!--we'll see just how much money Uncle Sam really is willing to commit going forward to a secure electricity grid. Might not be a lot--could be huge, though, if stories like the ones where the Chinese and Russians are plotting to disrupt our electrical grid "just because" keep getting reporting.

Apr 24 01:37 PM

[TinyTim:]

Hey, AMSC, more power to ya!!

This is a niche application that deserves more research.

I have a hard time envisioning SC wires replacing PILC in urban environments, except in extremely special circumstances. For long distance, high voltage transmission, where 5-10% is lost to resistance ohmic heating, nothing can replace adding a few more pounds of aluminum to the bundle.

Apr 24 05:07 PM

[Dave Marsh:]

I sold my AMSC today just based on valuation. Because it's so cool and because they have the crossover appeal of wind turbines + smart grid apps, it's a very appealing play. Just too high right now. It double topped (yesterday and today) at $25. But I'm in under $19. That should happen. Everyone loves it but at 7X sales, everyone knows about it, and if you buy on a momentum play you'll lose. Look for a pullback in the market and get in then.

Apr 24 09:26 PM

[trader2:]

80,000 meters is 80 kilometers. That means 50 miles not .50 miles.

Apr 26 03:27 PM

[Butch:]

@LKofScotland: Efficient? Technically - yes. Economically - not if there are viable alternatives. More secure? The cables are subject to all of the same sources of damage as any other, plus if the cooling goes off so do the cables. There are niches for this technology today and with continued effort it will become more feasible economically. But dollar for dollar I'd put my personal money into existing infrastructure to get the best bang for the buck.

Apr 28 06:32 PM