Optimal Technologies on Monday said it secured $25 million in a second round of funding from Goldman Sachs to continue development of its electrical power systems technology.
The investment includes an immediate payment of $13 million to be followed by milestone payments over the next 12 months. The energy technology company has operations in San Francisco and Calgary.
Optimal’s products, which will be available commercially in 2008, can be applied to power grids and promise to reduce the amount of electricity used and needed by buildings and communities.
“What is being used today [in electrical power transmission and distribution] can be compared to a blunt hammer,” said Optimal CEO Roland Schoettle. “Optimal's mission is to make it easy for utilities, businesses, and consumers to analyze and manage energy usage for complete optimization and efficiency.”
As energy costs rise and fears of climate change intensify, technologists are scrambling to find ways to reduce energy consumption. But the U.S. government projects that electricity sales in the country will still increase between 28 percent and 54 percent by 2030.
Instead of looking to replace the current system, says John Quealy, an analyst with Canaccord Adams, the most capital efficient way to reduce energy consumption quickly is to improve the existing infrastructure.
“We are all looking for easily deployable solutions, and it seems Optimal Tech is bridging the gap,” Mr. Quealy said.
Optimal’s products target the demand and supply sides of the electrical power grid and require no new wires or transformers. The company’s analysis software, Aempfast, can be used by utilities to make their power grids more efficient and reliable, resulting in lower operating costs and fewer blackouts.
The software will immediately improve efficiency by at least 10 percent, according to Optimal. But the company says savings will increase over the long term when the system is used for planning new power sources and makes it easier to bring renewable energy online.
Aempfast has been used in studies commissioned by the California Energy Commission, and several utilities are test running prerelease versions.
Optimal’s Surefast technology is a combination of hardware and software for commercial and residential buildings, campuses, and utilities. The company claims the platform will make “genius” buildings that use power more efficiently and can communicate back to a power grid.
Mr. Quealy said the potential market for Optimal’s products is enormous since there not yet any intelligent grids in place in North America or Europe. But he warned that there are serious obstacles to adoption, especially among utilities.
“Utilities are not in the business to take technological risks,” he said. “They focus on reliability. They move slow for good reasons and won’t go into something that might disrupt electricity supply.”
Regulatory conditions may also prove difficult, Mr. Quealy said.