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Summary:

In the telecom and Internet worlds, it’s standard to re-route data over different lines when one path is overloaded. But not so much, when it comes to the power grid. However, a newly-emerged startup called Varentec, backed by Khosla Ventures, is looking to change all that.

Electric grid substation

In the telecom and Internet worlds, it’s standard to re-route data over different lines when one path is broken or overloaded. But not so much, when it comes to the power grid, and utilities can’t easily control where power goes. However, a newly-emerged startup called Varentec, backed by Khosla Ventures, is looking to change all that and is developing equipment and software that will allow utilities to manage the sometimes unpredictable infusion of solar and wind power.

San Jose-based Varentec, incorporated in June 2010, is working on what it calls “power routers,” which will allow utilities to channel electrons to whichever transmission or distribution lines they deem suitable to deliver the necessary amount of power and meet demand at any time of the day or night.

“If people want green electrons, then we can guarantee the electrons are green,” Deepak Divan, president and chief technology officer of the company told us. “We can route power around a congestion point. If there is wind being curtailed, we can route the wind to different places to make sure the wind power gets to market.”

Varentec is using a $5 million grant from the U.S. Department of Energy’s ARPA-E program (for high-risk early-stage research) to develop its technology for both directing and adjusting the amount of power that flows all the way from a power plant to a home or business, said Divan. Varentec plans to both unveil the equipment and announce a pilot project with a utility in 2013, said Andrew Dillon, Varentec’s head of business development and marketing.

Dillon declined to name the utility, whose involvement could not only help demonstrate the tech but also to market it to other utilities. Utilities are known to shun the use of new (and sometimes expensive) equipment unless they have to do so for regulatory compliance.

Varentec also raised a $7.7 million Series A round last year and counts Khosla Ventures as a lead investor. Varentec is one of the rare smart grid startups that Khosla Ventures has funded.

The current power grid

Currently, the grid isn’t set up to allow utilities to have this dynamic control of the power flow. And there really isn’t a major need for it — yet. The majority of power today comes from fossil fuel-based power plants, which can produce electricity consistently 24/7, and can meet utilities’ demands predictably.

But with the emergence of wind and solar power, there could be a potentially huge headache. Wind and solar power production is variable because it depends on whether the sun shines or the wind blows. If the sun hides behind the clouds or the wind dies, utilities may not have enough time to crank up their coal or natural gas power plants to make up for the temporary loss of power supply, or to direct that power to certain neighborhoods quickly. They also will have to cut power production at these fossil fuel plants quickly once the sun comes out from hiding or the wind kicks up again.

“You don’t want your lights to go off just because wind has died down somewhere,” Divan said. “Utilities are forced to route power from a different place.”

In addition if electric cars become more popular, utilities will have figure out when and where in their territories they will have to provide the necessary amount of power to accommodate car charging. Utilities face penalties for not delivering power reliably – that means, for example, they can’t have too many outages and have to restore power as quickly as they can.

Varentec’s secret sauce

Varentec’s got some ideas about controlling the direction and volume of the power flow, but Divan declined to describe exactly how that could be done. We do know, however, that its power router technology will come with silicon-based converters that Divan said will be more efficient at adjusting the voltage, current and other characteristics of power as it courses through the grid. Power losses happen with each power conversion step, but Varentec’s converters will reduce that loss to less than 1 percent, compared with the 3-5 percent of converters today, Divan said.

Varentec also says its power routers will be more efficient and cost less in other ways. “To regulate 10 MW of power, we only need 1 MW of the equipment. We can get a 10x cost reduction, and that’ll become more economical,” Dillon said.

For an idea of what Varentec is working on, you can check out this presentation from the Georgia Institute of Technology, which is a partner in Varentec’s project and has done its own, separate research in power electronics for the grid. The presentation counts Divan as a co-author but describes another ARPA-E funded project to use a “power converter-augmented transformer” using silicon-based “direct AC converter cells” to control power flow.

Photo courtesy of Florian via Flickr

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  1. Werent they sued for ip infringement by Princeton power?

  2. Katie Fehrenbacher Friday, January 20, 2012

    @Lawsuit. A look at PACER says, yep looks like Princeton Power sued them in April 2011 and then they came to some kind of agreement and the suit was voluntarily dismissed October 2011.

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