Optimal Starts Selling "Brain" for the Power Grid

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Optimal Technologies CEO Roland Schoettle likens the country’s current power grid to a person with Alzheimer’s: As time goes on, the brain gets worse and the problems just keep on growing. The eight-year-old company said today that it’s started to sell its first commercial product that uses a mathematical algorithm to act as the “brain” of an ailing power system. The company’s network-optimizing tool is called AEMPFAST, which stands for “Advanced Energy Management Power Flow Analysis System Technology.” And that mouthful helps utilities design and streamline their grids, freeing up valuable extra power, and helping to eliminate blackouts.

Schoettle is so confident of the product’s ability that Optimal had previously been offering its services for free, with a deal to take a cut of the value of the freed-up power that an optimized network can provide. For example if Otimal’s software can free up 90MW, that would be worth north of $50 million, Schoettle explained.

According to the company’s research for the California Independent System Operator, if utilities in California had used its tool during the Bay Area blackouts in 2000, they could have been avoided altogether. Same goes for the blackout on the East Coast in 2003, according to Optimal. Now that is some powerfully convincing data.

How does it work? The company’s product is software based on an algorithm that looks at the big picture of the grid and calculates the best placement of generators and renewable power, as well as other optimizing designs and system configurations. The software can rank the different choices that utilities have by price and the impact to the rest of the grid. Schoettle calls the software “an absolutely dramatic shift from what the industry uses today.” Everything else, he says is a “blunt hammer.”

To put it bluntly. Optimal has also gained the confidence of Goldman Sachs, which invested a Series B round of $25 million into the company. Previously Optimal raised over $11 million from individual investors, including Schoettle’s own millions in a seed round.

Optimal has been working on the technology for almost a decade, and has used the software for consulting purposes. If the company’s technology is as powerful as they say it is, Optimal’s biggest hurdle could actually be turning the technology into a product that appeals to a utility customer.

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