Why investors are going gaga over solid state transformers

It’s no secret that the electronics industry is getting old, but one area stands out from the rest. Transformers haven’t changed much since Thomas Edison invented his first light bulb.

Now, utilities are working to modernize the transformer, replacing it with modern electronics that promise to give grid users more control over how and where electricity flows.

“It becomes a very powerful device, similar to your Internet router,” said Subhashish Bhattacharya, co-founder and CTO of DG Matrixhe told TechCrunch.

Three startups recently raised more rounds to increase production of their sustainable development technologies. This week, DG Matrix raised a $60 million Series A and Heron Power arose $140 million in Series B around. In November, Amperesand raised $80 million to chase the growing data center market.

Current transformers are reliable and efficient, but that’s about it. These are crude tools, made mainly of copper and iron. They are apathetic to grid changes and can only perform one task per device.

“The old iron, copper, and oil train has no lights, no energy,” Drew Baglino, founder and CEO of Heron Powerhe told TechCrunch. In some cases where the electricity is overloaded or the generators are not online, this can be a problem.

These devices can combine power from a variety of sources – including traditional electricity, renewables, and batteries – and convert the electricity into alternating current (AC) or direct current (DC) at multiple voltages, allowing them to power multiple devices.

For data centers, solid state transformers offer an interesting alternative, allowing them to reduce their power consumption while giving them better control over the power supply and how the power flows.

Solid state reforms are about to arrive at a time when existing reforms are aging and the need for innovation is growing – high-tech. Most transformers on the grid today are decades old, according to to the National Laboratory of the Rockies (NLR; formerly the National Renewable Energy Laboratory). As demand from data centers, EV chargers, and other parts of the grid increases, NLR expects the amount of power flowing through transformers to double by 2050.

Although the data center is the primary market that these companies are chasing, they are also interested in the electric grid, which only the US has 80 million transformers.

“All the distribution changes will need to be changed.” More than 50% of them are 35 years old. There is a great need to upgrade,” said Baglino.

Because they are made from silicon-based materials, they can be modified, controlled, and programmed. They are also protected from price fluctuations that rock the copper market.

“Electronic semiconductors are cheap. Steel, copper, and oil, unfortunately, are not,” Baglino said. “Commodity prices can go anywhere, and often go up.”

In a traditional transformer, power enters the transformer through copper wires wrapped around one side of an O-shaped iron. As the current flows, it creates a magnetic field in the center. On the other side of the core, the magnetic field induces an electric current to the other parts of the copper. If the wires are connected to the core more often on the input side than on the output side, the voltage will decrease on the output side. If the interest rate changes, the voltage increases.

Solid-state transformers focus on copper currents based on semiconductors, using materials such as silicon carbide or gallium nitride to provide high frequency conversion. It can come in many different forms, with the most complete setup consisting of three basic components: a regulator that converts alternating current to direct current, an inverter that converts direct current to voltage, and an inverter that converts direct current back to direct current.

Unlike metal transformers, solid-state transformers can handle power that flows in both directions, making them useful in environments that require backup power, such as data centers.

In a data center, a standard transformer can switch several different devices, not a transformer that steps down the voltages from the grid. Every data center uses backup power, which requires multiple devices to bring power to the site. Solid state transformers can handle all those functions in one box.

The technology also enables data centers to easily integrate so-called behind-the-meter systems, where production power is connected directly to the data center, rather than the grid. This usually requires another set of transformers.

And when combined with grid-scale batteries, solid-state inverters can eliminate uninterruptible power supplies (UPS), too, freeing up space inside the data center for more racks.

“If you add up the cost of all our releases, we are 60% to 70% of that cost,” Haroon Inam, co-founder and CEO of DG Matrix, told TechCrunch.

DG Matrix has been focusing on its Interport technology, which can run power from multiple sources to multiple different power sources, an implementation that the company has multiple ratings for.

Heron Power, meanwhile, is working on medium-voltage power conversion for data centers, solar farms, and grid-scale batteries. For data centers, its Heron Link switches can provide racks with 30 seconds of power when backups come online. Overall, the Heron Link takes up 70% less space than existing units. In a solar farm, Heron Power transformers can perform the functions of an inverter and a converter at the same cost.

In a head-to-head comparison, solid-state inverters are still the most expensive of the metal ones. For this reason, they will not replace the large humming boxes at grid substations very soon.

But in the data center and the EV environment, where solid state switches take the place of multiple devices, they start to intrude.

By reaching this group on a larger scale, they are able to reduce the cost of shipping and distribution, one of the main contributors to lower subsidy costs.

Because today’s transformers are unstable, unable to react to fluctuations, distribution networks have been built with large amounts of storage, Baglino said. Robust transformers, however, can respond to changes, allowing grid users to send more power through the same lines.

“You can make infrastructure cheaper because you’re putting more kilowatt-hours through the same trees and wires,” he said. “This is where wisdom, instead of things that were created 100 years ago, can make a big difference.”