Transitioning To A Smarter Grid: American Superconductor

This listed company is developing products to transition our present grid to a more resilient paradigm

The present grid paradigm has reached its sundown — it’s time to start transitioning to a new, more efficient paradigm. Source: Alexander Popov via Unsplash

his article is one in a series investigating the importance of modernizing and decarbonizing the electric grid. The company we feature in this article — American Superconductor AMSC — is working on improving current grid infrastructure as part of a multi-decade transition upon which we are just embarking.

If you want to understand the issue in context, see the article Grid Modernization; for cutting edge experts’ take on the topic, see the article Here Is How To Create A Clean, Resilient Electrical Grid. For a look at an innovative company spun out of Stanford University’s labs that have developed a battery with tremendous potential for providing grid storage, see the article, Enervenue: The Batteries We Need for Grid-Scale Storage.

Executive Summary

  • Rooftop solar installations place an enormous strain on the 20th century grid — which was designed to operate essentially unidirectionally — by creating big swings in electricity supply and demand during the day.
  • To guard against cascading outages caused by local supply-demand imbalances, the grid’s transmission and distribution (T&D) system* was designed for compartmentalization.
  • Compartmentalization guards against outage risk, but means that power is not distributed as efficiently as it might be.
  • American Semiconductor is using its novel capability in the field of engineering high-temperature semiconducting (HTS) cables to distribute power more effectively where it is most needed; doing so, it is helping to create a more resilient, efficient grid.

One of the biggest stresses placed on grids today is something that many casual observers and many utility customers consider an undiluted positive — the huge increase in retail power generation from rooftop photovoltaic (PV) panels.

PV panels produce a lot of electricity for homeowners when those same homeowners are often not at home to fully appreciate it.

Peak energy demand occurs after people come home from work, flip on the TV, and start microwaving chicken pot pies for dinner. Unfortunately, this peak energy demand period also corresponds to the setting of the sun, when PV panels’ generation slows.

The huge swings in electrical demand exacerbated by residential solar plays havoc with the grid as it is presently designed. For a great explanation of this phenomenon, see this article about the “ Duck Curve.”

The orange line in this diagram resembles, if you squint your eyes, a duck. The blue line represents total electrical demand throughout a single day; solar production (gray line) supplies a significant amount of electricity during the day. Source: Arnold Reinhold — Own work based on data from, CC BY-SA 4.0

Because the grid was not built to be able to store energy, electricity supply must always precisely balance out with electricity demand. The extreme swings in demand shown by the Duck Curve makes it hard for utilities and grid operators to balance supply with demand and if there is a large enough imbalance, the grid becomes unstable.

The worst-case grid stability scenario is if supply and demand get so far out of balance as to create a local blackout that ends up cascading across a wide area (as occurred in the Northeast Blackout of 2003).

To prevent this kind of cascading outage, different branches of the T&D system were isolated, so that a supply-demand imbalance on one branch would not cascade through other branches.

In other words, our grid was designed similarly to submarines — with separate compartments that can be isolated such that damage to one compartment does not automatically lead to the entire vessel sinking.

While compartmentalization solves the problem of cascading failures, it also means that if one branch of the grid has too great of an energy supply, it cannot easily pass that excess onto a nearby branch that has too great of an energy demand.

The conventional way to shift energy to different branches more easily is to aggregate several substations — effectively grafting two or more branches together. This change requires re-siting the new, larger substation on a larger plot of land and installing expensive equipment to mechanically contain and control cascading outages.

Especially if a substation aggregation needs to take place in a crowded urban area, finding, securing, and permitting a new, larger site can take a decade of approvals and planning. In addition, the utility needs to submit a “rate case” to its regulator — in other words, it needs to get governmental approval for spending this money and passing the charges onto the end customers.

Depending on the jurisdiction, rate cases can be very difficult and time-consuming, as the power provider must prove that the benefits of making the expenditure far outweigh the costs that are passed on to the consumer. Aggregating multiple substations does increase the flexibility and resiliency of the region’s grid system, but the siting, approval, and capital expenditures are pricey.

In these cases, the costs are very real (i.e., “We need to raise prices to end consumers by XX%”) but the benefits might be harder for a regulator to quantify (i.e., “Our grid will be more stable in case of a future extreme weather event.”).

Daniel McGahn, CEO of AMSC. Source:

One publicly traded company, American Superconductor (AMSC) believes it has technology that can offer utilities and rate payers the best of both worlds: a more resilient grid at a much lower cost. It calls its product the Resilient Electric Grid (REG) system.

AMSC specializes in superconducting materials and has developed a high-temperature superconductor cable called Amperion that allows enormous amounts of power to be transferred from point A to point B without losses due to electrical resistance.

The company announced a partnership with the company to whichI pay utility bills — ComEd- to tie together three substations in the highly built-up urban area inside Chicago’s “Loop” (the central business district).

By tying the three substations together with the Amperion cable, then controlling flow using specially designed equipment and software, AMSC can virtually create an installation that would normally have required a decade of red tape and pleading with regulators. And what’s more, customers being fed by those substations are less likely to be affected by grid stability issues because the power is being more efficiently managed.

“Why not cover the U.S. in Amperion cable?” you might ask.

Well, Amperion is best described as a “high-temperature” superconductor only in a sense relative to the temperatures at which other superconductors operate. Amperion functions at around 70 degrees Kelvin which works out to -333 degrees Fahrenheit. That’s cold even by Chicago standards.

To get the cable down to that temperature requires the entire length of the linkages between each of the substations to be supercooled with liquid nitrogen, which requires a dedicated infrastructure, specially trained personnel, and the like.

Despite the engineering complications, the costs for a utility to aggregate substations in high-dollar, high-congestion urban areas are much lower, and the project can be built out much faster than if the utility had to go about things the old-fashioned way.

AMSC also has a few different product lines — the REG product described above is designed for the interface between the transmission and distribution networks. It also supplies a product called D-VAR VVO, which helps distribution networks (i.e., the twigs served by the substation branches) manage the varying influx of renewable power.

A D-VAR installation. These units smooth out the variations in energy generated by rooftop PV panels to make distribution networks more efficient and stable. Source:

In addition, AMSC has one division that manufactures wind turbine controls and another that designs radar cloaking systems for the Navy.

As someone on the lookout for public and private companies involved in ARM products and services (climate change Adaptation, climate Restoration, and climate change M itigation), AMSC seems worth a closer look. I have no position in the security, nor am I contemplating taking one yet, but it is on my radar.

The transition to net zero will require the hard work of many organizations with different ARM solutions. Our anachronistic grid — a public good that provides the basis for the wealth and comfort of every American company and citizen — must transform.

Intelligent investors take note.

* Note: In the electrical world, “transmission” and “distribution have two very different meanings. The transmission network consists of the transfer of very high voltage power from a generation plant to commercial customers or to a local “substation.” The substation takes the high-voltage power and “steps it down” to a voltage that can be used by residential consumers. Transmission networks are multidirectional, but until recently, distribution networks have been unidirectional. See my article Grid Modernization for a full explanation.

Originally published at

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