We design, market and sell electrical power conversion products using our proprietary
technology called Power Packet Switching Architecture (“PPSA”).
PPSA is a power conversion technology that improves upon existing power conversion
technologies in key product metrics, such as size, weight, cost, and efficiency.
PPSA utilizes standardized hardware with application specific embedded software.
Our advanced technology is important to our business and we make significant
investments in research and development and protection of our intellectual property.
We have been granted 36 United States, three European, one Chinese and two other
foreign patents.
We sell our products primarily to systems integrators for integration into
their larger turn-key system which enable end users to manage their electricity
consumption by reducing demand charges or fossil fuel consumption, integrating
renewable energy sources and/or form their own microgrid. Our products are made
by contract manufacturers to our specifications, enabling us to scale production
to meet demand on a cost-effective basis without requiring significant expenditures
on manufacturing facilities and equipment. As our products gain broader acceptance
in the power conversion market, we intend to license our proprietary PPSA-based
product designs to OEMs within our target markets, as well as license our technologies
for other markets which we do not plan to enter directly.
Utility power grids are built using AC generation, transmission, and distribution
resources. This method of power transmission and distribution has been proven
over time to be reliable and safe. The outlets in a typical home or business
are AC but many electrical devices, such as computers, televisions, and other
appliances operate on DC power. Batteries and PV solar panels produce DC power
as well. In order to connect DC devices to an AC power grid, a power conversion
device is necessary.
We believe that significant changes in the supply of and demand for electrical
power are driving demand for new energy infrastructure products and supporting
technologies. In a traditional utility model, electrical power is generated
from central stations and transmitted over long distance high-voltage transmission
lines to substations where the voltage is reduced for distribution to consumers.
Utility power grids are built to manage the flow of power in one direction,
from generation to use, where sophisticated tools have been developed to match
the amount of power being generated with the amount being consumed. Utilities
ramp power plants up or down to closely match generation with load.
The rapid growth in worldwide renewable energy generation, such as wind and
solar power, has added a new level of complexity to the task of matching power
generation with consumption. These intermittent resources cannot be dispatched
at will or relied upon to meet the peak power demands of the grid. Renewable
energy sources tend to ramp up and down quickly. For example, a single cloud
over a photovoltaic, or PV, farm can cause electrical output to change dramatically
in a matter of seconds. These new challenges make it increasingly difficult
for utilities to accurately forecast and meet peak power demands.
Increased peak demand for power also has exposed weaknesses in the existing
power grid. In high-cost, high-demand states, such as California, public utilities
have instituted peak demand charges as a way to ration power during periods
of peak demand and to incentivize customers to shift their power consumption
to off-peak times. At the same time, both the Federal and certain state governments
have created incentive programs to encourage the development and implementation
of alternative energy sources, such as solar and wind power, which has the perverse
consequence of making peak demand more difficult to forecast and satisfy. Strains
on the electric grid have resulted in significant brown-outs and black-outs
that have heightened awareness of the vulnerabilities of the existing system.
As a result, power consumers are turning to new technologies to manage their
energy consumption, lower costs and assure a reliable source of supply. We believe
that distributed generation with advanced power conversion systems, such as
our PPSA products, has become an increasingly important element of this new
infrastructure.
In response to these changes in the market for electrical power, a number of
technologies have been developed to enable users to more effectively manage
their consumption and, one of these technologies, energy storage systems, has
emerged as the best way to mitigate the instabilities and market inefficiencies
caused by these emerging power grid realities. For example, a commercial business
can shift energy usage from peak to non-peak times by installing a battery energy
storage system, or BESS. The commercial business can use electricity generated
during off-peak hours to charge the BESS and then use the stored power to satisfy
all or part of its demand during peak hours. Similarly, a commercial business
can install a solar power system to generate power for use either immediately
upon generation or for storage in a BESS for later use.
Battery energy storage systems and many alternative energy sources provide power
on a direct current, or DC, basis. However, the electric power grid and most
electrical equipment operates on an alternating current, or AC, basis. Consequently,
power conversion systems are required to convert power from DC to AC or from
AC or DC as necessary to make the various components of the system function
together. In addition to converting power, power conversion systems enable customers
to regulate current, voltage and frequency while optimizing system resources
such as batteries, PV and the utility power grid to reduce energy costs. Systems
incorporating advanced power converters may also manage distributed grid energy
storage and be used to create stand-alone microgrids to bring power to a business
or residence if the main electrical grid, if one is present, is unavailable.
We believe PPSA is the only power conversion technology on the market that provides
electrical isolation without the need for the transformer that conventional
power conversion systems require to connect electrical devices such as energy
storage systems to the grid. Electrical isolation is at the core of PPSA.
PPSA uses indirect power flow in which power flows through input switches and
is temporarily stored in our proprietary AC link inductor. Our proprietary fast
switching algorithms enable the transfer of quantum packets of power between
ports in our system. As the AC link becomes charged, it disconnects from its
input switches, resonates without being connected to either the input or output
switches, and then reconnects to its output switches when it reaches the correct
voltage and frequency for the application, providing true electrical isolation
without the need for a transformer.
