Although I can't imagine American Superconductor's cable to be cost competitive here's a competitive PR:
NEW YORK - About this time every year, most of the country's utility executives start to get a little nervous. Temperatures heat up. Consumers and businesses close their windows and turn on the air-conditioning. Power usage explodes. Then come the inevitable blackouts. For years, utilities have tried to fix the problem by building more plants and preaching energy efficiency. That helped. But you--and your business--still run the risk of being in the dark.
However, one company thinks it has a viable option that could help keep the lights on.
Today, American Superconductor (nasdaq: AMSC - news - people ) announced that its second-generation high-temperature superconductor wire transports 75 times the current of a similar-sized copper wire. The company announced it also developed a proprietary manufacturing process that trims costs fivefold. The wires can be used in engine design for trains and ships. But more important are the implications for utilities that may soon be able to purchase superconductor cables for cheaper than the overhead copper ones that dominate the industry.
"We successfully moved the technology from the lab to the manufacturing process," says Gregory J. Yurek, chief executive of American Superconductor. "We are very encouraged because the first wires out of the gate validated our key manufacturing assumptions."
At the center of American's wires is a nickel tungsten alloy surrounded by micro-thin insulating composite buffers. On top of that is a superconductor film and thin strips of copper. Cable makers then wrap those wires around a core that has liquid nitrogen pulsing through it for cooling. This construction allows for mechanical durability and less sag when the juice starts flowing through it. (Heat can cause a copper wire to sag and hit trees, a major cause of blackouts.)
In the past, American Superconductor had been limited to producing 1-centimeter-wide wire strips that would be sliced in half to meet industry standards. This limited production capacity and helped prices stay 20% to 30% above that of copper. But now the company is manufacturing 4-centimeter-wide tapes, which, when cut, can produce eight wires for two to five times less than the previous method. Yurek says a recent customer who was prepared to spend $11 million per mile for copper wire systems could spend just $6 million to $8 million for superconductor cables--and transport more power to boot.
Now it's just a matter of getting the traditionally stodgy utility industry to buy. American Superconductor says purchasers of its first-generation wire included Northeast Utilities (nyse: NU - news - people ), Alliant Energy (nyse: LNT - news - people ) and American Electric Power (nyse: AEP - news - people ). General Electric's (nyse: GE - news - people ) energy unit and German conglomerate Siemens (nyse: SI - news - people ) also have taken a look at the company's products. This second-generation wire will be ready for market by the end of 2005.
American Superconductor brought in a record $45.4 million during the first nine months of fiscal 2004, up 53%. The company still posted a loss of $11.5 million, or 41 cents per share, but that was half the deficit from the previous year. It currently has back orders of $37 million. Its stock trades at $9.40 per share, 38% off its 52-week high.
Today's news comes on the heels of competitor Composite Technology's (otc: CPTC - news - people ) bankruptcy filing last week.
Any comments would be appreciated.
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