Smart Wire Grid may hold key to power transmission woes
By Christina Williams
Sustainable Business Oregon editor
Arnerich Massena-backed Smart Wire Grid has a device that could help utilities get more capacity from their power lines, solving what has been a detriment to renewable energy development.
A Bay Area company backed by a prominent Portland investor may hold the key to grid transmission issues that are throwing up roadblocks to renewable energy integration.
Smart Wire Grid Inc., backed by an Arnerich Massena-run private equity fund, is poised to start a nationwide pilot program to test its device, which attaches to power lines to improve the communication and performance of the grid.
"It goes on lines that are congested," said Woody Gibson, chief operating officer and founder of Smart Wire Grid.
As an example of what Smart Wire devices can achieve, consider the distinctly Northwest issue of overgeneration — times when an oversupply of water causes too much hydropower to overwhelm Bonneville Power Administration's system. This spring, for the second year in a row, the situation prompted BPA to require wind energy operators feeding into its system to suspend operations. A device like the one Smart Wire Grid is developing could address the issue from a transmission perspective by increasing the capacity on power lines.
Smart Wire Grid officials estimate that between $3 billion and $5 billion per year is lost due to grid congestion.
"What we're trying to do is pretty important to the power industry," Gibson said.
Employing the appropriate amount of skepticism for an early-stage investor, Tony Arnerich, CEO and chief investment officer for Arnerich Massena puts it this way: "If it works, it's the holy grail of electrical transmission."
Arnerich believes in the proposition enough that he's invested $7 million dollars so far in Smart Wire Grid, with another $3 million set aside to close out the Series A round later this year, providing that the company hits a final set of milestones.
Key to hitting those milestones is the launch of a one-year pilot program to test Smart Wire devices, which work by redirecting the flow on congested wires — think of electricity like water and transmission wires like a garden hose — to redirect the power flow to other lines on a connected system. (See details about the device here.) Early tests show that the devices, which contain software and transmitter to communicate with grid operators, can improve transmission system performance from using 60 percent of existing grid capacity to using 90 percent of capacity.
Smart Wire Grid technology was developed at Georgia Tech University and received a $4.4 million grant from the U.S. government's ARPA-E program last year to work with Boeing, Carnegie Mellon University and others to develop the transmission and communication aspects of the devices.
Tennessee Valley Authority, a $11 billion government-owned utility in the Southeast, has already signed on as a test user and will participate in the pilot.
"We received a lot of utility interest," Arnerich said.
The plan is to sign on two or three other utilities from other parts of the country to participate in the pilot. Gibson said he has had conversations with BPA about Smart Wire Grid.
The company is working with a contract manufacturer in St. Louis to develop the pilot production line and the company's first devices. Gibson said he's in talks with several states about where the company might eventually based its operations.
"We're looking for the state that offers us the best deal," he said.
In addition to its largest backer being based in Portland, Smart Wire Grid has another Oregon tie with former PacifiCorp CEO Fred Buckman sitting as chairman of its board of directors.
Gibson expressed interest in entertaining Oregon as a potential home base for Smart Wire Grid operations, but the company's lead investor said it might be a long shot.
"I would be tickled pink if it could come here. We would love to site it here," Arnerich said. "But we're not a manufacturing powerhouse and this is a heavy metal manufacturing business."
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