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