Earlier this month, Kinetic Traction Systems, Inc. (KTSi) announced it had acquired the rail assets of Pentadyne Power, and set up shop targeting the use of flywheel technology in the rail market. To get the story behind KTSi, we spoke with Dick Newark, CEO of the company, Chandler Williamson, CMO; and Rudy Lautz, CFO. (Photo courtesy KTSi: left, Dick Newark, middle, Rudy Lautz, right, Chandler Williamson).
Let's talk about the technology first, and how it works?
Chandler Williamson: The technology we have is generally referred to as a high speed, flywheel system. The origins of the design that we have goes back to a company from the United Kingdom in the late 90's, and actually came out of high speed, centrifuge technology which is used for uranium enrichment. The parent firm was Urenco, which is a Uranium enrichment company, and had created the flywheel from their core set of technology. The early applications for that technology included backup power for facilities, but most notably was for transportation and rail applications. That's basically the flywheel that we have. There are three components -- a main cylinder that houses the flywheel, an integrated motor-generator, and a separate power electronics module, which feeds into the motor in the flywheel, or can be used to take power out of the flywheel and give it back to whatever is connected. The last module is a vacuum cooling system, which when the flywheel is spinning, cools the flywheel motor.
It's a fairly straightforward system design, and is essentially what Urenco developed. When their parent firm pulled up support for that company in 2004, they went out of business, but the technology and the IP lived on. We had known about the company, going back to when we were all at Pentadyne, and in 2007 we entered into a license from the group of people who had acquired those designs. We completed that agreement in 2009, and were taking the original Urenco design, and began to manufacturer that design. We were awarded a project with the New York Metropolitan Transit agency for a 5 megawatt system. However, when Pentadyne was forced to close their doors, the assets were essentially split from Pentadyne. KTSi acquired all of the rail assets from Pentadyne.
What parts of the rail industry would be interested in using this technology?
Chandler Williamson: Broadly, any electric rail system. The flywheel charges on kinetic energy, and allows those systems to apply power when needed. It's a very broad market. You're basically looking at a global market, there is a tremendous amount of growth right now, and people are interested in becoming more sustainable. Green rail is the most effective mode of transportation, to move people many miles for few dollars. There's been a tremendous amount of growth in Asia, lots of growth especially in light rail in the U.S., and a lot more in infrastructure and upgrades in Europe. The market opportunity we're trying to tap into is the movement to be more green in that industry, where they are looking at how to be more sustainable and green, and reduce carbon emissions.
Dick Newark: To add a little to that, the rail agencies have one of three solutions they're searching for. In the New York Power Authority contract, the use was halfway between two substations. The project was to recapture energy from rolling stock, and placing trackside flywheels mostly near the station, so that the power recaptured from rolling stock could be used to accelerate that train, or the next train. Another area, is to capture energy from braking, which normally would be wasted, and feed that back into the rail side to cut down on overall energy use. There's also the performance aspect, moving this faster and more reliably--for example, there are low voltage situations, which manifest themselves as trains going very slowly, particularly as they enter or exit a particularly hotspot.
How much of a difference in energy usage do your systems make?
Chandler Williamson: Basically, if you can capture energy from regenerative braking, you can see 20 to 30 percent energy savings over what they're using today. It's not insignificant. It will be 20 percent initially, but at the systems are fine tuned and depending on the application, we think some will be better, and system wide will be a very significant number. There's probably no single measure where a transit agency can see that kind of a payment today. They're looking at lightening their rail vehicles and using more efficient onboard systems, but none of those hit the 20/30 percent range for payback and an ROI in the best locations of three to five years.
This was deployed at some customer sites, was it not?
Dick Newark: The technology had been deployed under the UK company, and had several installations. Unfortunately, that company bought the units back and the metro agencies had to return their units when Pentadyne disappeared, so at the moment, Kinetic Traction does not have any installs. The roadmap for the product has us going back to New York to try to get our first install.
Chandler Williamson: We're in the process of relaunching the product. Pentadyne had the product installed in New York Power. Beyond that, we're in discussions in Asia, America, and Europe for additional pilot projects. We'd like to get our systems deployed to demonstrate the gain we can provide. That was already demonstrated by Urenco, but users are much more likely to purchase this when they can see with their own eyes that it's working.
So what's on your roadmap now?
Dick Newark: We're working with a number of OEM equipment manufacturers. The first few projects include the New York project, where we are in position as the prime contractor. We had been responsible for all of the equipment, construction sites, and all in New York City, and it it's been a big task. But, quite honestly, that's been a bit of a stretch for a small company. We've been working with the leading rail equipment manufacturers, both on the transaction power and rolling infrastructure side, and we think that's probably the shape of the future where we become more of flywheel manufacturer, where we supply a channel. I suspect over the next six months, as we get through qualification tests planned with equipment suppliers, we'll become much more a manufacturer of flywheels rather than a than prime contractor.
It seems like you've learned some lessons from that experience?
Dick Newark: Quite honestly, in terms of lessons learned, it is a big deal working with rail and metro agencies. They're very interesting as a group, and have a lot of characteristics in common--they have a lack of money, they are a very conservative group, and there are lots of redundancies in their applications. They don't really like to touch new technology, and they don't like to be the first one to have a flywheel system installed. They're kind of risk-adverse and conservative, and a little slower to respond to new developments. But, that's where we feel an OEM partnership really will help us, because then we'll have the breadth of the big company behind us, to help us introduce our technology through current equipment sales and distribution to railroads.
Chandler Williamson: Of the rail equipment suppliers, there are just a few that are really global suppliers. There's an opportunity to match up with them, to be supplier to them, and to grow the manufacturing business in Southern California, and leverage their global reach and sales pipeline.