Ideal Power Successful IPO Goes From $5 to $7; Company’s Bi-Directional Chargers Are Aimed at EVs

NOV 30 2013 BY MARK KANE 7

Ideal Power's 30kW Bi-Directional Battery Converter

Ideal Power’s 30kW Bi-Directional Battery Converter

Ideal Power is a small 10 full-time employee start-up focused on a power conversion technology called Power Packet Switching Architecture (PPSA), which according to Ideal Power improves the size, cost, efficiency, flexibility and reliability of electronic power converters.

On November 22, Ideal Power did am initial public offering of 3,000,000 shares of common stock at NASDAQ. 3,000,000 shares of common stock sold for $5.00 per share brought in $15 million (but, of course, some part of that cash will flow to lawyers) with and additional option to purchase up to an 450,000 shares by underwriters. Anyways, after the weekend, the stock went up by 40% to about $7 and after several days the stock’s price seems to be stable now.

Why  is this interesting? Because about one year ago, Ideal Power presented a bi-directional charger called Battery Converter, which passed some National Renewable Energy Laboratory (NREL) tests and the company aims to introduce such devices to the market.

The original unit had power of 30 kW charging or discharging, but users can stack many modules if needed to increase the power:

September 14, 2012 - Experiments conducted on DC bi-directional charging and communications at NREL's Vehicle Testing and Integration Facility.

September 14, 2012 – Experiments conducted on DC bi-directional charging and communications at NREL’s Vehicle Testing and Integration Facility.

“Ideal Power’s 30kW Bi-Directional Battery Converter (IBC-30kW-480) is ideal for DC fast charging of electrified vehicles including Plug-in Hybrid Electric Vehicles (PHEV) and fully Electric Vehicles (EV), dramatically lowering charging time and improving charging efficiency compared to on-board low-power AC charging systems. Multiple IBC-30kW-480 converters can be used in parallel to provide higher power capability.”

“High-power DC chargers are particularly important for commercial EV fleets, such as trucks and buses, due to their higher energy requirements. The Ideal Power solution offers lower installation cost and higher efficiency than conventional charging systems. The IBC-30kW-480 also supports bi-directional power flows that will generate additional value-added capabilities for fleet owners when their vehicles are parked and not in use. Such vehicle-to-grid (V2G) applications are now being evaluated by the U.S. Department of Defense, as well as numerous commercial entities.”

“An external plug-in EV interface is required to support the SAE j1772 combo-connector and ChaDeMo DC charger interfaces. These EV interfaces provide power connections to the vehicle, as well as communications and control. Ideal Power is cooperating with the National Renewable Energy Lab (NREL) and electric vehicle supply equipment (EVSE) suppliers on the development and demonstration of such solutions to support various EV charging scenarios.”

Separate communication modules for Combo and CHAdeMO interfaces are also welcome. The prototype has Combo.

From the IPO prospectus, we can learn some interesting things…

In the part about business its model, Ideal Power admits to selling a battery converter to some companies, among which we see Boulder Electric Vehicle that recently demonstrated Vehicle-to-Grid (V2G) charging.

“Our business model is to license PPSA to original equipment manufacturers (“OEMs”).  The types of OEMs that might be interested in using our products include subcontractors that would build our product designs for customers under license from us, as well as large commercial and industrial companies licensed by us to build the products to be sold under their own brands.  Our goal is to share in the overall economic benefit with these OEMs; we expect this approach will allow us to save on staffing and working capital requirements.”

We have designed and built our first two products: a 30kW PV inverter and a 30kW battery converter.  These products demonstrate the capabilities of PPSA and can be licensed to OEMs.  These products have met industry standards and, as of September 30, 2013, have been purchased by 24 commercial and government customers.  Since our inception, our top ten customers measured by aggregate dollar value of purchase orders for our products have been Powin Energy, Ontility, Meridian Solar, Boulder Electric Vehicle, the U.S. Navy, Texas Solar Power Company, Lighthouse Solar, Saddleback Church, Global Energy Products, and Sharp.  We are in the process of developing two more products that we plan to make available to OEMs: a 30kW 3-port hybrid converter and a 30kW micro-grid converter.”

In the part about target markets, we read something about a next product – the 30 kW hybrid converter (two DC ports and one AC grid port).

“EV DC charging market: The DC charging market is sometimes called the fast-charging market, as it can reduce charge time for a standard electric vehicle from 8 hours to 30 minutes. This market is growing quickly, spurred on by EV manufacturers such as Tesla and Nissan; industry analysts estimate that EV DC or fast charger shipments will grow from 9,000 in 2012 to 98,000 in 2020.”

        “Our 30kW battery converter is our first product for this market.  NREL in Colorado, along with several early commercial customers in pilot installations, is using this product to buffer or reduce the intermittency of high power loads seen by the utility grid.  We believe the efficiency, flexibility and cost benefits of PPSA will contribute to the spread of DC charging stations.  Our next product for this market will be a 30kW hybrid converter, which we will design to exploit the multi-port capabilities of PPSA and to integrate DC charging with PV or stationary battery storage.”
One of the latest customers for bi-directional charging devices could be NRG that first wants to prepare a technical and economical demonstration and then intends to deploy it (if viable) with Ideal Power units on-board. The bad news is that NRG is slow in terms of building infrastructure in California.
       “NRG Energy, Inc. (“NRG”) is the largest competitive generator of electricity in the U.S., with 47GW of generation assets. Through NRG’s agreement with the California Public Utilities Commission (“CPUC”), NRG anticipates investing $100 million over the next four years in the eVgo California charging network including 200 Freedom Stations with DC charging, and a Technology Demonstration Program. On July 3, 2013 NRG submitted a $1.9 million proposal for a Modular Micro-Grid DC Charging Technology Demonstration Program to the CPUC.  This proposal contemplates developing and demonstrating a new EV DC charging solution using our 30kW 2-port battery converter and 3-port hybrid converter.  After successful technical and economic demonstration, NRG intends to deploy these solutions, including our 3-port hybrid converter, into its broad EV charging station rollout.”
        “We believe there is strong market demand to cost effectively integrate buffer batteries and distributed PV generation with EV charging infrastructure.  NRG’s proposal to the CPUC states that the modular micro-grid platform using our 3-port hybrid converter and our micro-grid converter will save installation costs, operational costs and create new value streams for the host and power grid operator.  According to NRG, the additional flexibility and functionality of this platform should lower total lifetime cost of ownership of EV DC charging infrastructure, thereby accelerating NRG’s deployment of charging infrastructure and customer adoption of EVs.”

From other parts of the prospectus we see an interesting sentence on 50 kW DC chargers that indicates high costs.  Ideal Power suggests just 30 kW chargers without transformers to limit cost or to use a hybrid converter to directly send energy from resources like storage or PV.

“DC chargers can incur high demand charges, which translate into high operating costs for DC charging stations.  A typical 50kW DC charger in Southern California can fully charge a Nissan Leaf for less than $4 per vehicle, but the utility peak demand charges on the installation can be more than $1000/month.”
“We have a 30KW battery charger for this market that exhibits the characteristics of our PPSA technology. Our PPSA-enabled battery charger is 95% efficient.  Competing chargers have approximately 90% efficiency, which means that they may waste twice as much energy as our products do.  This improved efficiency should result in lower electricity expense.  We believe our system is more efficient because competing EV DC chargers may require an isolation transformer, while our system provides the necessary isolation without a transformer.”
It’s remarkable what you can find simply by reading a prospectus.

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7 Comments on "Ideal Power Successful IPO Goes From $5 to $7; Company’s Bi-Directional Chargers Are Aimed at EVs"

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Dan Frederiksen

Bla bla bla, such a racket these IPOs.
The only relevant metric here is the price of their product and since they don’t talk about that at all, not even indirectly, that means this company is worthless.

Where is the demand for V2G??? what are they thinking…
And given the industrial look of the product I can only assume the price is nitwitted.

I hope EMW does a good cheap chademo so Ideal will have a quick death.

Dr. Kenneth Noisewater

V2G could make quite a bit of sense if you think of it as a large battery backup for the home, especially when coupled with home-based renewables. The average home with a 200A 240v service could get quite happily by with a 40kWh EV in the garage providing nighttime power to a home with a solar array.

I would definitely not want to tie my vehicle into the grid and expose it to the wear and tear of constant community utilization without some sort of compensation though. Perhaps power companies can get into the battery leasing game!

Dan Frederiksen

Sure it would be cool as a blackout backup supply. But not for 20k$ extra which I expect is the price range for this riduculous product.
Nissan has a 6.6kW V2G thing that might be more reasonable in price.
It should be called V2H instead because noone wants to pay to wear down their battery to be free infrastructure for the power companies.
There has to be zero demand for industrial V2G which is what the above product seems to be. You can’t even use it as a business backup because what if you paid 30k$ to install one and then the car is not there during the blackout..

Benjamin

I still don’t see why I any Ev owner would to wear out there battery faster and spend more money on a more expensive charger.

pjwood
Mark and Dan, You have to understand how demand-charges work a little more to know what the prospectus was getting at with “$1,000 a month” increases in electric bills. Instantaneous consumption of electricity, by a business, can set the kwh rate for all watts it consumes. L3 charging is a relatively big instant demand on a utility’s resources. One visit by a Tesla may take down ~70kwh of fast charging, in one month, but since up to 135,000 watts of capacity had to be dedicated the moments it charged, instead of, say, 70kwh delivered at 1,000 watts (70 hours), the utility seeks to displace its costs for having to have that much more in reserve capacity to supply the L3 charger (or massive HVAC unit, plus ovens, plus commercial X, Y or Z). If a 50kw L3 unit fires when the HVAC units also call for 20kw at start–up, the business registers 70kw instant demand. I don’t know all the tiers, but there could be a jump point where all kwhs price higher, if a business reaches over a 60kwh instant demand, at any point during a month. Understanding demand-charge pricing is important to understand where the incentive comes from… Read more »
pjwood

..I meant 60kw, not “60kwh” instant demand.

miimura

Why would a business that is allowing installation of a DCQC not insist on separate metering? The cost to add another meter to the point of entry would easily be offset by the avoidance of demand charges. I just looked at PG&E commercial rates and the A-1 tariff “Small General Service” is applicable to any non-residential, non-agricultural customer that has less than 75kW peak demand. This would be sufficient for one 50kW DCFC and a couple J1772 EVSEs. This rate schedule has NO demand charges.

Obviously you can’t do a Supercharger installation on this kind of plan, but you could easily put 2 or 3 50-60kW DCFCs if you included some integrated battery storage and configured the system to limit the grid power draw to below 75kW. That is what I took away from this story – you don’t have to do V2G, you can just add some hardware to avoid punitive pricing from the utility. Add some solar with net energy metering and the variable costs can approach zero for a site that is mostly used for road trips.