For the past 130 years, electric power has flowed from distant utility-owned power plants to consumers, whether commercial, industrial or residential customers hundreds of miles away.
But this model is changing with the rise of alternative generating sources, such as solar, wind and gas-fired turbines, sited close to their loads.
They can be found on college campuses and military bases, as well as on oil rigs, and other self-contained areas.
“Microgrids are going to become the next big thing in the electric power industry,” said John Jennings, director of product management for San Diego-based Power Analytics Inc., one of the leaders in software used to design, monitor and manage microgrid networks.
The company, which changed its name from EDSA Micro Corp. two years ago, has been around since 1983.
Jennings said the privately held concern is an important competitor in a sector that includes Boeing, General Electric, Lockheed, Raytheon and BAE Systems.
Navy Is Using Software
He said his business is the only one that has the software to monitor and manage the data from power networks in real time as well as the software to design the networks.
The company generates $10 million in sales annually, according to published reports.
The U.S. Navy said it is using Power Analytics software to manage a cluster of microgrids at three San Diego naval facilities.
Jennings said once the system is installed, the Navy will be the first to manage a cluster of networks, which will put Power Analytics in the forefront of innovation in microgrid network command and control.
But he was quick to point out that Power Analytics is not just focused on the military.
Those customers include financial data centers, which are huge electric power consumers, 16 air traffic control sites, plus a dozen or so deep sea oil platforms.
‘Mastermind of the Microgrid’
Closer to home, the company can point to a case study in its own back yard.
UC San Diego uses Power Analytics’ product to monitor and manage its network, Jennings noted.
Holly Smithson, president and chief operating officer at CleanTECH San Diego, said the company is one of the masterminds of the microgrid that “showcases this futuristic model of how small communities can generate and manage their energy.”
She said the company is collaborating with CleanTECH to “position other communities domestically and abroad to replicate the successes minus the trial and error elements of pioneering.”
Wexford Capital, a private equity firm located in Connecticut, is majority owner of the firm though a subsidiary, Digital Power Capital.
The firm first invested in Power Analytics in 2005.
Michael Nark joined the company as president and CEO in August of 2012 after having served as the top executive at Prenova before it was sold to Avista, an electric utility, a year ago.
Jennings said Power Analytics is looking ahead to its next big market, the nuclear power industry at home and abroad.
Platform is Top Tier
He thinks new nuclear power plants will be constructed once standards for design and construction are revised by Washington, and said the market will open up overseas, too, despite the major nuclear power plant accident at Fukushima, Japan, two years ago.
Power Analytics will benefit from a number of new projects that federal agencies are funding in the sector, Jennings said.
“This is a big deal,” said Jennings. “This is how the future will be.”
“There is no consensus yet as to which company or even which technical approach is best for microgrids, since they come in so many different sizes and can be designed for a variety of purposes,” said Peter Asmus, a San Francisco-based analyst for energy market research firm Navigant. “That said, for the ultimate in smart grid functionality, the Power Analytics platform is certainly in the top tier.”
“Microgrids are the wave of the future and extreme weather such as superstorm Sandy are building intense interest in this aggregation and optimization approach to networking distributed energy resources,” said Asmus.
“It’s a very intricate, complex system that has developed over the past 100 years,” said John Cooper, president of Austin, Texas, alternative energy consulting firm Next Watt Solutions. “Now the idea is to take that system and to shrink it down to a college campus or military base.”
“Power Analytics have been around for a while, and they have a developed a mature, stable platform that makes them more than effective,” said Cooper. “I am very bullish on the company.”