SuperPower’s vision paying off as period of profitability looms

SuperPower General Manager Arthur Kazanjian said he can see clearly now that the company, which move
Chuck Weber, the director of SuperPower’s applications department, talks about the company’s history.
Chuck Weber, the director of SuperPower’s applications department, talks about the company’s history.

It may be that the most important super power demonstrated on Duane Avenue in Schenectady is supervision.

It required vision, and millions of dollars in private and public investment, to transform the rotting hulk of the former Maqua printing plant at 450 Duane Ave. into the headquarters of SuperPower Inc., where about 60 people now work.

Chuck Weber, the director of SuperPower’s applications department, said eight years ago, when SuperPower first moved from Latham to Duane Avenue, it required strategic vision for SuperPower’s former owner Intermagnetics General Corp. to pour approximately $100 million into research to develop a commercially successful superconducting wire.

“There was no guaranteed return on that money. They were investing on the hopes that the equipment would be designed and operate properly and [we’d] be able to develop a product we can sell,” Weber said. “Now, going forward, the capital we need is to upgrade capacity, to increase throughput. Those kinds of business decisions are a little bit easier to sell to people.”

SuperPower General Manager Arthur Kazanjian said he can see clearly now that the company is on the brink of profitability.

“We have a very clear marketing road map. I have to say that we are ahead of our expectations in orders that we have received to date,” Kazanjian said. “The inquiries and responses that we’ve received [from] around the world, coupled with the orders we have received, have us feeling very good about the outlook.”

Last month, SuperPower announced it had successfully installed a 30-meter length of the company’s second-generation superconducting wire, known as the 2G wire, into the $27 million Albany High Temperature Superconductor Cable Project. The project’s aim: to demonstrate the Schenectady-made wires are capable of transmitting electricity in a live electrical grid. Company officials said the installation marks a milestone in SuperPower’s evolution from a research company to the exclusive manufacturer of a wire that could change the world.

Super gamble

SuperPower was created by superconducting magnet maker Intermagnetics General Corp. in the late 1990s to pursue the possibilities of creating a commercially viable “high temperature” superconducting wire, something never accomplished before.

Scientists first discovered superconductivity in 1911 when experiments showed that certain materials cooled to extremely low temperatures will allow electrons to pass without resistance. Superconductors offer the possibility of 7 to 10 percent more efficient electricity transmission and as many as 100 times greater current loads than traditional copper wires. Superconducting wires are also much smaller, just thin strips of metal tape, which take less duct space than thick copper wiring.

But technological barriers prevented the technology from being commercialized.

At first, superconducting wires were cooled with expensive liquid helium to bring temperatures down to -450 degrees Fahrenheit. Wires of that type were used by Intermagnetics to make magnetic resonance imaging machines used in hospitals, but the wires were too costly for more conventional applications.

In the 1980s, technological breakthroughs showed cheaper liquid nitrogen can cool mint-grade silver into a superconductive state at -321 degrees Fahrenheit. These silver wires became the first generation of so-called “high-temperature” superconductors, but they were still too expensive.

SuperPower Vice President and Chief Technology Officer Venkat Selvamanickam said the key scientific advance for the superconducting wire business occurred when scientists in the federal government’s national laboratories demonstrated very small lengths of superconducting wires can be made using layers of nanoscale materials coated onto cheap nickel substrates.

Nanoscale refers to measurements in billionths of a meter; to put it in perspective, one human hair is roughly 80,000 nanometers thick.

Intermagnetics officials decided to roll the dice, spend $100 million on its subsidiary SuperPower, and see if the tiny outfit could use licensed technology from the federal government to develop a commercially viable, high-temperature superconducting wire.

Selvamanickam said the move took courage.

“A lot of work had to be done to make it commercially viable. Trying to make a mile-long wire [using nanotechnology was something] nobody had done before. There is no other field with similar types of requirements,” Selvamanickam said.

Even though national laboratories proved it was possible to make the second-generation wires, the process was still more expensive than making the first generation silver wires, known as 1G wires, because it couldn’t be accomplished on a mass scale. SuperPower took up the challenge of bringing down the cost of making the wires and ramping up the production speed and length to marketable dimensions.

“People used to really question our decision, whether this was the right thing to do. Our competition was still going strong on the [1G wires]. They really believed the 1G technology could be viable,” Selvamanickam said. “They said we were on the wrong path. We really felt that the 1G was not economically viable.”

Kazanjian said SuperPower’s competitor, American Superconductor of Devens, Mass., put its efforts into manufacturing the first-generation, silver superconducting wires when SuperPower chose to go after the potentially less expensive 2G wires.

“[American Superconductor] actually spent a great deal of money to build a major factory in Massachusetts to make the 1G wire, whereas we decided to forgo 1G and go straight to the 2G,” SuperPower Marketing Manager Trudy Lehner said.

After SuperPower started working on the 2G wires, made from nickel, very tiny amounts of silver and ceramic nanotechnology, it publicized production milestones in 2001 stating when the company would be able to achieve commercially useful lengths of the wire.

“We had the guts to do that,” Selvamanickam said. “We said by 2002 we’d make a 1-meter long wire, by 2003 we’d make it 10 meters long, in 2004 it’d be 100 meters and by the middle of the decade we’ll make it one kilometer long.”

In August, SuperPower reported to the U.S. Department of Energy that it can produce wires at lengths greater than 1,300 meters, nearly a mile, at speeds of 350 meters per hour.

Intermagnetics General Corp. was purchased by Dutch industrial giant Royal Philips Electronics in November 2006 for a reported sum of $1.3 billion. Intermagnetics was renamed Philips Medical Systems MR. Although there was some uncertainty over whether Phillips would retain SuperPower, Philips Vice President Gerard Spaendonck assured SuperPower employees in February that Phillips would retain ownership of the company for the “foreseeable future” and cited SuperPower’s status as the world’s only manufacturer of commercial length 2G superconducting wire as one of the reasons.

Government Funding

SuperPower has benefited from support from the local, state and federal governments. When Intermagnetics first moved the company into 450 Duane Ave., then-Assemblyman Paul Tonko, D-Amsterdam, helped secure a $500,000 grant to pay for renovations to the circa-1906 building.

“It was in sad shape. We had to put in windows. There were pigeons living everywhere in here,” Lehner.

Building owner Wally Spiegal said he had been close to selling the structure, which at one time he had used as a distribution center for his company, Spiegal Furniture, but was talked out of it by Tonko and city Councilman Gary McCarthy.

“They said we should work together to find some tenants for the building, companies that would create jobs,” Spiegal said.

“I borrowed around $5 million, all private, no tax breaks except [inclusion of the property] into the Empire Zone. We renovated it inside and outside to the specs of Intermagnetics to make plush offices, [nanotechnology] clean rooms and connect 4,000 amps of power.”

Today the building is home to SuperPower Inc., CardioMag Imaging and Internet company Logical Net Corp.

To accommodate the economic growth, local officials appropriated money to expand SuperPower’s parking lot and put up a traffic light to help motorists in and out of the parking lot and the busy traffic on Duane Avenue.

SuperPower also benefited from a $5 million state grant that state Sen. Hugh T. Farley, R-Niskayuna, helped secure three years ago. The grant was split between SuperPower, Union College and Schenectady County Community College and helped SuperPower purchase equipment used to train college interns in skills needed to work in the area of superconducting wires.

The New York State Energy Research and Development Authority gave SuperPower $6 million in grant money to help start the Albany High Temperature Superconductor Cable Project. That state investment helped encourage the U.S. DOE to put up $13.5 million for the demonstration project. SuperPower, together with National Grid, Linde, and Sumitomo Electric Industries Ltd., paid for the rest.

Lehner said the Albany project was specifically designed so that there would be two 1G silver wires, made by Sumitomo Electric, installed at the start of the demonstration in July 2006, so the shorter one could be replaced with a SuperPower 2G wire this year.

National Grid officials said the 1G wires in one experiment were able to handle the power load for half the city of Albany, which would normally require many conventional copper wires.

SuperPower outlook

Kazanjian likes to say that SuperPower is an advanced materials company, not a tissue paper company. And by that he means what they make isn’t cheap and won’t be for a long time. Earlier in the decade, SuperPower’s efforts had been aimed toward the large electric utility market, but until its 2G wires cost no more than copper wires, not expected to happen until 2011, conservative U.S. utility companies are unlikely to seek to rewire the grid with superconducting wires, despite the potentially substantial electrical efficiency gains.

Many of SuperPower’s demonstration projects, like the one in Albany, are conducted in New York, making the Empire State a showplace for the potential of superconducting wires, but the utility markets more likely to invest in superconducting infrastructure in the near term are developing nations without existing copper transmission grids, Kazanjian said.

SuperPower has never turned a profit, but until last year, it was strictly a research company, and did not sell anything that could have generated a profit.

For now, SuperPower is looking to make money marketing to companies in need of very high performance transmissions wires for demanding applications.

Some of the applications sound like science fiction: force fields, floating trains, energy-directed weapons. Kazanjian said SuperPower is entering into deals in all of those markets as well as new medical technology.

“I really believe the industrial and the scientific applications will be first [before the utility market]. Those will be the markets that will really position the company to be profitable in the early years,” Kazanjian said.

Categories: Business, Schenectady County

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