SCHENECTADY hings are starting to heat up at SuperPower Inc.
The Schenectady-based energy technology firm has been in a hiring mode
lately, and it announced a new $3 million military contract just last
the company, which is owned by Philips Medical Systems in Andover,
Mass., and employs 60 people, is in the process of seeking investment
That is part of a process that former owner
Intermagnetics General Corp. began a year ago to make SuperPower an
SuperPower's talks with investors are
apparently so sensitive right now that neither company officials nor
Philips Medical would talk to the Times Union for this story.
industry experts and analysts say that the high-temperature
superconducting technology market that SuperPower is involved in has
the potential to revolutionize the equipment used by electric
utilities, which spend about $6 billion a year upgrading transmission
lines. That amount may reach $100 billion over the next 10 years.
has said that industry and the federal government have invested $1
billion in high-temper ature superconductor technology in the U.S.
since it was first discovered about 20 years ago.
typically occurs when wires are chilled to temperatures approaching
absolute zero, or minus 273 Celsius. The superconducting technology
that SuperPower is developing functions at minus 190 Celsius, which is
why it is called a high-temperature superconductor.
commercial payoff in HTS technology would be years from now. Experts
say the high costs of the technology must be reduced and reliability
improved. And the power companies must eventually adopt the technology,
which they haven't done yet.
That makes investment risky but with a huge upside.
is like being around for the discovery of the transistor," said Louis
Castellani, president of Metal Oxide Technologies Inc., an HTS wire
developer based in Houston. "This is not for the timid."
as it is known, is one of a handful of companies around the globe that
compete in this field, along with SuperPower and American
Superconductor Corp., a public company based in Westborough, Mass.
Superconductor, which went public in 1991, has 237 employees and a
stock market capitalization of $315 million. It has never turned a
profit and lost $30 million during its fiscal year that ended March 31
of last year.
Rick Sheehy, a spokesman for American Superconductor, said the company would not comment for this article.
materials carry electricity without resistance, which is why utilities
and other energy companies are so interested in the technology.
Superconductivity was first discovered by a Dutch scientist in 1911,
and in the late 1980s, scientists from IBM discovered high-temperature
superconductors that are now being developed by SuperPower and others.
electric utility industry is particularly interested in HTS technology
because scientists believe HTS wire can be a viable alternative to
traditional copper wires used in electrical transmission.
copper wires, HTS wires have no resistance to electricity, so they are
more efficient and can provide more reliability to the electrical grid.
SuperPower is developing a second-generation HTS wire that it says has
superior performance to other HTS wires.
The resistance in traditional copper wires causes a loss of 7 percent to 10 percent of the electricity flowing through them.
Superconductors are also used in medical imaging devices such as magnetic resonance imaging, or MRI, machines.
which Philips Medical acquired for $1.3 billion in November, made large
magnets used in MRI machines that also have superconducting properties.
the decision was made about a year ago that SuperPower would be better
off on its own, and the investment bank Stephens Inc. of Little Rock,
Ark., was hired to seek out a buyer.
Philips won't say whether Stephens is still working on the deal, or whether another firm has been hired.
also won't address statements that SuperPower President Philip
Pellegrino has made that the company is seeking $30 million in
financing and that a deal could be secured by the spring
decisions have not been made yet," said Philips Medical spokesman Ian
Race. "And we're looking to find out why information has been
Pellegrino did not return a call seeking comment,
and SuperPower spokeswoman Trudy Lehner said he and other company
officials would not comment for this story.
Carl Rosner, the
founder of Intermagnetics who is now CEO of a Schenectady medical
imaging company called CardioMag Imaging Inc., says SuperPower is
developing an important product that could dramatically improve energy
"I think the technology obviously has an important
future," he said. "And the potential is huge if there is enough
investment dollars over the next few years."
didn't know any specifics about what types of funding are available to
SuperPower, he pointed to the fact that the stock of American
Superconductor, SuperPower's main competitor, has been attracting a lot
of interest lately.
In fact, shares of American Superconductor
were trading at a 52-week high of more than $14 late last week, and
they have risen more than 50 percent since late January.
Haldar, one of the scientists at Intermagnetics who helped to create
SuperPower and is now head of the University at Albany's Energy and
Environmental Technology Applications Center, says the adoption of HTS
technology by utility customers might be five to 10 years away,
depending on the country's energy needs.
"This is a technology that is very promising," Haldar said, "but there's still a substantial amount of risk involved with it."
says the risk is so great and the financial payoff so far down the road
that a likely investor would be a large company with deep pockets that
would have a direct stake in the technology taking off.
is currently involved with a number of large corporate partners in a
$27 million HTS wire demonstration project taking place in Albany
between two National Grid electric substations. The partners include
National Grid and Sumitomo Electrical Industries Ltd. of Japan.
December, SuperPower shipped more than six miles of second-generation
HTS wire to Sumitomo to use in the manufacture of a second-generation
HTS power cable to be installed between the two substations later this
Although about $20 million of the SuperPower project is
being funded by the state and federal governments, the project's
partners are splitting the rest of the cost with SuperPower.
Grid spokesman Patrick Stella said the British-based utility would not
be interested in investing in SuperPower, only serving as a host to the
"Primarily, we're in the (energy) transmission and
distribution business," Stella said. "Our relationship with SuperPower
has really only been on that one particular project. We're providing
the lab, if you will, for them to test that technology."
Yuichiro Horiba, a spokesman for Sumitomo, was asked by the Times Union if Sumitomo wants to acquire SuperPower.
this point in time, there is no fact (to the idea) that Sumitomo
Electric Industries Ltd. (has) made the decision to acquire SuperPower
Inc.," he said in an e-mail response.
In addition to SuperPower's quest for an investor and independence, the company has been growing, and getting other good news.
January, SuperPower promoted Venkat Selvamanickam to vice president and
chief technology officer, and in February, it announced that John
Herrin, a former executive with Saint-Gobain Abrasives, had been hired
as its first vice president of manufacturing.
The company is also
seeking to hire a marketing manager and marketing assistant, new jobs
that show the company is moving out of strictly a research and
development phase into a commercialization phase.
And on Feb. 27,
SuperPower announced a new $3 million contract with the U.S. Department
of Defense Office of Naval Research to work on the second phase of a
program to develop a HTS generator based on its HTS wire.
All this means good things for the Capital Region, especially the city of Schenectady, where SuperPower is headquartered.
is working with Schenectady County Community College and Union College
in the city on a $5 million workforce development partnership that has
already resulted in two SuperPower employees joining the facility at
"Any growth that SuperPower experiences will be
beneficial to Schenectady County Community College and our students, as
we will be training students to enter their company as skilled
professionals," SCCC spokeswoman Heather Meaney said. "Their growth can
only benefit this partnership, our work-force development initiatives
and the local economy."
Larry Rulison can be reached at 454-5504 or by e-mail at firstname.lastname@example.org.