The Next Generation?

By Gero Di Piazza

US-based Catalyst Power is supplying the business sector with on-site electricity solutions. Its generator systems safeguard companies against the consequences of power interruptions.

The power crisis that cursed California made a lot of US energy utilities and businesses worldwide realise the potential consequences of a power shortfall. Modern businesses in particular have more to fear than other types of electricity consumer as they often have to cease operations until power is recovered. The fear factor has been so widespread that preventative measures, such as installing on-site power generators to safeguard firms in case of power cuts with the added bonus of saving costs during peak hours (known as peak shaving), are becoming increasingly popular.

California-based Catalyst Power, which formed in 1998 and was taken over by ABB last year, is one company that was quick to react in meeting the needs of these consumers. Catalyst is a systems integrator for on-site distributed energy solutions for small to medium sized businesses. It does not manufacture generators or Uninterruptable Power Supply (UPS) systems.

Customer focus

Catalyst purposely targeted the small to medium sized business sector with around 50-60 employees and roughly 743 m2 of office space. Sriram Sivaram, president of Catalyst Power said: “We decided to focus on a specific customer and these were customers that couldn’t afford to experience any kind of downtime. These businesses rely on continuous electricity flow whatever the circumstances.” He claims: “Power would not be as important to a smelter for example, as they would not be too affected. [Smelters] wouldn’t care how dirty their power is as long as it is regained.”

One on-site power company that builds ‘mini-power stations’ on location is US-based Sure Power Corporation. An official at the company echoed Sivaram’s view. John Lidderdale, commercial director for its non-Americas arm, Sure Power International, UK, said: “It takes four hours to recover a second of interruption and it takes several days to retrieve data that has been waiting to get through during that time. This can be disastrous for a bank’s credit card department that has to deal with 17 million transactions an hour.”

Sivaram adds: “In the US last year, customers spent around $3-4 billion on on-site power supplies. So there’s a lot of people out there that don’t know how to solve their problems today, while others have done it by UPS and have only spent a couple of thousand dollars. All they have to do is wait for the power to go out before they see a return on that asset.”


Figure 1. The SmartGate analyses all incoming and outgoing information flow
Click here to enlarge image

In the few years that Catalyst has formed, it has already supplied three businesses, a law firm, golf course, printer and has accepted ten more orders this year from various outlets across several US states, which in itself shows the growing demand for on-site power.

Generators

The packaged on-site generator that Catalyst offers is the Pinnacle 50 and the Pinnacle Plus 50 (see Figure 2). The former features 50 kW of unattended, automatic backup peak shaving power, with a natural gas engine generator and an automatic parallel switch-on intelligent control system. The latter includes a battery backed UPS with an additional 10-30 kW of essential load for businesses that need high-quality, reliable power for critical load support such as sensitive computer networks, phone lines, air conditioning, lighting, security systems and elevators.

Electricity consuming items that are considered to be in the non-essential load category are chillers and boilers etc. The company has installed the generators to supply electricity on their own premises as a marketing tool for potential customers. The network operates with a monitoring system that automatically activates during peak demand or blackouts.


Figure 2. The pinnacle 50 and Pinnacle Plus 50 generators
Click here to enlarge image

The Catalyst generators are assembled in outdoor enclosures to eliminate noise, and are transportable should the customer want to relocate. They are manufactured by Generac Generators, a global manufacturer of on-site power production and are usually fuelled by natural gas, one of the most popular options for on-site fuel due to its clean-burning and being universally available in metropolitan areas.

Another is the combination fuel generator unit. This runs on a mix of 95 per cent natural gas and five per cent diesel. Diesel, which is the most cost-effective fuel option, requires regular truck delivery for its on-site fuel storage tank and of course, does emit harmful pollution. It may also require permission to be installed from the local authority due to the high emission levels.

However, the concept of on-site power is not new, power companies have been doing it for years. The renewable sector, in particular, has flourished in this market. US-based Aeromax, a global player for on-site wind and solar power, claims to be at its busiest period due to the power crisis endured along with last year’s terrorist attacks.

David Sears, vice president of Aeromax, Arizona, adds: “Last year’s power crisis and the September 11 attack has made a lot of businesses realise how extremely fragile power is. The corporate environment has since done its utmost to be independent if such occurrences happened again. This message has spread to other outfits such as the [US] army, navy and marines who we currently supply.”

Crucially, Catalyst Power has developed a one-stop-shop service whereby it operates and maintains the equipment remotely through the use of a specially-designed central processing unit.

Named SmartGate, the central processing unit enables Catalyst to gather all information relating to the electricity it is supplying to a particular customer at a certain time. SmartGate also enables a variety of other services including generator monitoring, which allows for the compilation of key data such as historical trends, operation analysis and predictive maintenance.

SmartGate also benefits from added features such as generator and UPS alarms, generator scheduling and administration. It enables customers to control electric costs through on-site generation in parallel with the grid. Built-in logic computes the economically optimal operation schedule based on site-specific electric and gas tariff structures and actual load profiles and automatically engages the generator as required. Users are provided with on-line monthly financial reports summarising the resulting energy cost savings (see Figure 1).

Purchase agreement

Clients that choose Catalyst will be bound into a power purchase agreement of a single predefined monthly payment over a three to six-year term. According to Sivaram the minimal period enables the customer to recuperate costs through savings. Catalyst will operate and maintain the equipment until the contract expires.

This unique billing approach integrates the entire turnkey power system, including service, for one low monthly lease fee. The thinking behind this, said Sriram, is to eliminate multiple vendors such as engineering firms, power quality consultants, and electrical contractors. The service offering for the Pinnacle 50 is priced at $1700-2050/month, and the Pinnacle Plus 50 costs $3125-3750/month. With this, Catalyst claims to save businesses ten per cent of their annual power bill.

But it is not just cost that is attracting customers; reliability is now high on companies’ priority lists. Power disruptions caused by high winds, flooding, winter-storms, not to mention vandalism and equipment failures, all play a part in delaying a company’s day-to-day duties.

Although any saving, no matter how small, is beneficial, you have to question whether it would be possible to leave the system on for 24 hours, thus giving the business a constant saving. Sivaram answers: “Yes you could do that! This is what actually happened at the height of the Californian crisis where it was quite profitable as the cost of power was so high. But now it depends on the pricing structure of the utility that supplies you.”

Lidderdale recalls a customer that had to back-out of such a deal due to the utility penalty charges.

Sivaram claims: “Most customers don’t question utility bills, not because they don’t want to but because they think they are not allowed to. Now people are starting to think about it more and that’s where we come in. We’re not in the business of selling equipment; we’re not the utility trying to sell you more power. We’re on your side by managing costs”.

As more companies tap into the on-site market you tend to wonder whether existing power companies will develop subsidiaries to specifically deal with this demand to ensur that valuable customers are not taken away from them, or if the trend will follow on from certain independent US sectors and become the next generation of power supply.

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