Acorn Energy's TransformerIQ on major Smart Grid project

Steven Ralston, CFA

Acorn Energy’s TransformerIQ on major Smart Grid project

Acorn Energy (ACFN - Analyst Report) announced a major TransformerIQ monitoring project, which will benefit the company’s GridSense subsidiary. A leading southeastern electric utility, using funds from the American Recovery and Reinvestment Act, will deploy the TransformerIQ product to monitor over 2,000 transformers in one metropolitan county in its service territory. With the TransformerIQ product being capable of monitoring two-to-three transformers, the announced project is for 750 TransformerIQ’s, but the order could potentially be expanded by 7%. The project is expected to serve as a model towards the optimization of the Smart Grid electrical distribution system.

The TransformerIQ provides real-time monitoring of 28 key parameters related to transformer failure, including operating temperatures, predicted asset life, system capacity, operating current voltage and power factor. With over 20 million transformers in the United States at an average age of 37 years, a monitoring system would enable the cost-effective replacement of aging transformers before they breakdown (sometimes by explosion) and cause power disruptions. Transformers were designed for a 30-to-40 year life.

GridSense’s transformer monitoring solution can help extend the lives of $300,000 transformers by measuring real-time load. Transformers on the verge of failure can be replaced prior to failure, while those under manageable stress during times of high demand can have their load reduced by re-routing power to other lines, thereby extending their useful lives.

The project should demonstrate to other electric utilities the value and cost-effectiveness of intelligently monitoring the transformers in the electrical distribution system to improve its reliability by preventing outages. We reiterate our Outperform rating on Acorn Energy with a target of $5.10.
 
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