EESTOR - ZNNMF
Seeking Alpha Analyst Since 2013
Interesting news out of EESTOR. Leading capacitor expert Dennis Zogbi seems to believe EESTOR has a produced "disruptive" technology to the multi-billion dollar capacitor business. See link to Zogbi Interview.
EESTOR CEO Ian Clifford has indicated that they will be going ahead with joint venture discussions as of January 2016.
What could EESTOR's product mean to the multi billion dollar capacitor business?
● Here are the observations of two leading scientists related to EESTOR tech. The comments were made after Intertek released their third party EESTOR capacitor testing results.
● The reports from intertek from December 2014 and March 2015 show that EEStor can build a very good power correction capacitor that could dominate all the high voltage markets Mr. Dennis Zogbi identifies in his report. The Zogbi report stresses that this technology is disruptive because it is dry (solid state) and low cost. Zogbi goes on to define the market space where this technology has a disruptive edge over existing technology of Aluminum and tantalum electrolytic capacitors. These two facts when taken together reveal an upside that is potentially staggering.
● EEStor technology is a solid state storage system that does not use any fluids. Current electrolytic capacitor technology must use a toxic fluid sealed in a can. Because of this it must not be exposed to extreme temperatures and it has a short life due to leakage, temperature breakdown etc. of around 9000 hours . When they fail they sometimes explode and the fluid is corrosive and damages other components.
● EEStor solid state technology should last hundreds of thousands of hours, has no toxic fluids to leak, can take extreme temperatures, and failures, if they do occur, should not damage other equipment.
● EEStor technology is based on Barite as a raw material. It is so cheap it is used as drilling mud while the existing competitive technology uses aluminum and tantalum, both very expensive in comparison and in most cases EEStor needs ten times less raw material because EEStor technology is 10 times smaller.
● This change will be like the change from tube televisions to transistor televisions. You are probably just old enough to remember tube testers at Walgreens. When your TV went out, a common thing, you would go take all your tubes out of your tv and get them tested to see which one was broken. When solid state transistors came on the scene TVs did not break all the time and the need for tube testers went away. That is what is going to happen to all the other capacitor technology in this space, that's a multi billion dollar market, plus the Solar inverter market could all be replaced by EEStor technology in very short order.
● High voltage EEStor capacitors are:
● 10 times smaller
● take heat and cold temperatures current technology can not take without failing
● last over 50 times longer
● performs better (better filtering: quicker response)
● are safer
● are non toxic
● Cheaper (1/3 the cost)
● What widget would not take over the space with those advantages?
● Now let's talk about just these two markets:
● What is power factor correction?
● When large resistive loads (light bulbs or space heaters) are powered with alternating current electricity the voltage and the amperage rise and fall at the same time ("in phase"), 60 times a second in N America. This results in a power factor of one. When inductive loads (motors and transformers) are turned on the voltage has to rise before the current (amperage) can start to flow to create a magnetic field to drive the device. This means the voltage and the amperage rise and fall at different times ("out of phase"), which results in a power factor which is lower than one, perhaps 0.7. To supply the same quantity of useful power the current has to be higher than if the voltage and current were in phase.
● The increased current from a low power factor has two bad and costly effects on the electricity grid. Firstly, it is the current (not voltage) which causes power losses on grid transmission lines, so the increased current caused by a low power factor causes additional heating of the transmission lines, requiring more fuel to be burned at the generating station. Secondly, grid equipment, such as a transformer, has to be rated in kVAs, not kW. kVAs are the product of the independent current and voltage values, and the product is the same whether the current and voltage are in phase or not. If the power factor of a large motor behind a transformer is only 0.5, then the current is twice as high as it needs to be and the transformer has only half the capacity of delivering useful power. Using capacitors to correct the power factor to 1.0 would increase the useful power which can pass through the transformer by 100%! Transformers are expensive, but are expected to have a long lifetime, so power factor correction can result in large grid equipment cost savings through deferred upgrades.
● Because of this the utility charges the customer a surcharge each month if your power factor is not very close to 1. This surcharge can be more than 50 % of the energy costs each month so it is a recurring significant expense. If the customer adds a large capacitor bank to their equipment they can realign the amperage and the voltage so that the power company sees a power factor of 1 so they don't get the surcharge. This is what large companies do. They spend big bucks (see EEStor comparison Sheet one power factor correction unit is more than $1500.00 ) on large banks of these capacitors even though the average life expectancy of each one of the capacitors in the bank is just over a year at max load and temp. EEStor capacitor banks, based on Intertek data, should be 10 times smaller and should last 50 times longer and are projected to cost 1/3 as much to produce.
● Solar inverter market
● Solar inverters use the same capacitors as mentioned above. They have the same lifetime issues. This market is huge and growing and EEStor technology has the same advantages here. Temperature extreme is a key advantage in this space as well as lifetime potential. The solar installation that is connected to the grid must match the waveform of the grid. The Direct Current generated by the solar panels is sent to an inverter, usually at voltages between 500 and 1000 volts DC. The inverter uses capacitors to convert this to Alternating Current in synchronization with the grid waveform. When the capacitors go out they take down the money generating array since failures occur frequently. Solar companies pay people to monitor the capacitors to try and predict the failures to minimize downtime and damage from exploding capacitors. These companies will be put out of business by reliable capacitors in this space just like tube testers. I mention it to give you an idea of the issue with these capacitors and that there are no current cost effective solutions except EEStor.
● From Sandia labs report on inverter reliability:
● PV Inverter Performance and Reliability: What is the Role of the Bus Capacitor? Jack D. Flicker, Robert Kaplar, Matthew Marinella, and Jennifer Granata Sandia National Laboratories, Albuquerque, NM 87185, USA
● "........ Inverter reliability typically tends to be short because the inverter is both expected to serve a large number of functions (e.g. PV power management, grid connection/disconnection, VAR management, and/or island monitoring ) while operating in relatively harsh, changing conditions (-30-70˚C, 0-100% humidity, high salinity, etc). Many sources [2, 9] consider bus capacitors to be among the most unreliable elements of the inverter, decreasing the inverter lifetime as much as 50%  due to temperature and power cycling  resulting in high internal temperatures . Capacitors represent the constituent that can most easily be altered in the short term to increase inverter lifetime and decrease lifetime PV system cost......"
● The opportunity for EEStor in Solar Inverters can best be illustrated by these two statements, the first from:
● .."....Some design choices, made on the manufacturer level, could raise the cost and lessen performance of inverters in the name of reliability. For example, to replace electrolytic caps with dry film caps, Xantrex Technology claims the cost per unit of capacity would be 30 times higher and the volume 15 times larger....."
● With EEstor technology that issue turns into this:
● Some design choices, made on the manufacturer level, could LOWER the cost and INCREASE performance of inverters in the name of reliability. For example, to replace electrolytic caps with EEStor dry caps, Mr. Zogbi suggests the cost per unit of capacity would be 2/3 lower and Intertek says the volume will be 10 times smaller....."
● So here is a quick take away: think how fast old clunky monitors were replaced by thin flat panels for TVs and computers. Now imagine that no one thought you could make a flat panel tv so only one company was silly enough to be working on it and they patented the only way to do it. Now imagine that the one company was going to make all the flat panel tvs to replace all tvs and monitors in the world in 2 years
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