Big spin: Pentadyne Power Corp. is poised to rack up significant sales growth thanks to its use of flywheel technology in back-up power generators.

FLYWHEELS have been employed for decades as an exotic power source in satellites costing hundreds of millions of dollars, but now a Chatsworth company is making them viable closer to earth.

The $45,000 high-tech flywheel power systems manufactured by Pentadyne Power Corp. provide 20 seconds of critical power in the event a main power supply fails--a window of time that allows back-up generators to start up and take over. It's a feature being demanded by technology-based companies that must be sure their power supply never goes down--even for a moment.

The seven-year old company had less than $1 million in sales last year, after finally refining its technology. But it expects to more than double that this year and hit $15 million next year after landing several big deals.

"Generators don't come on instantaneously, but our system does," said Craig Kitchen, Pentadyne's new chief executive. "The factory never sees a brownout. That is our biggest selling point."

Pentadyne is under contract with Galena, Ill.-based Savanna Depot Technologies Corp. for as many as 800 units that would be installed in 400 decommissioned ammunition bunkers it is transforming into data centers. The first 40 units were purchased for $1.6 million.

The use of flywheels--essentially spinning discs--is actually an ancient technology that archaeologists say date back to ancient Egypt, where they were used in drills for massive building projects.

The wheels require energy to get started and keep going, but the spinning wheel also stores excess power in the form of kinetic energy that can be quickly discharged when needed (as the wheel slows) but quickly recharged once outside power is restored.

Traditional flywheels can lose energy and break down through the friction created by the spinning wheel, but the flywheels developed by Pentadyne minimize that problem two ways: they are made of light-weight carbon fiber and are electromagnetically suspended, meaning they don't touch anything as they spin at 54,000 revolutions per minute (several times faster than a Formula 1 race car engine).

"It's starting to prove itself to be reliable, but it's still a relatively young (technology) because of the new lightweight materials being used," said Bill Van Amburg, senior vice president of Calstart, a non-profit consortium that supports advanced technology.

Boom and bust 

Pentadyne's roots stem from the mid-1990s when Woodland Hills-based Rosen Motors, run by venture capitalist Ben Rosen, also founder of Compaq Computer Corp., and his engineer brother Harold developed the flywheel for hybrid cars.

The technology reached the demonstration stage in a General Motors Corp. Saturn vehicle, but when GM refused to go past R&D, the Rosens shut down the operation.

Paul Craig, then chief executive of Capstone Inc., bought the license for the system and left his company to help form Pentadyne, with the idea of using the technology for stationary systems.

"Paul recognized there were other applications that had more near-term commercial viability," said Craig's son, Flint, who left a Wall Street investment banking job to join Pentadyne as its chief financial officer and later its chief operating officer.

The field exploded in the late 1990s with the boom in telecommunications companies--big users of back-up power--but then nearly a dozen startups went under with the sector's bust.

Craig himself retired as chief executive--he remains chairman--and Kitchen was hired a month ago to replace him. (Craig is currently traveling the country in an RV.) Still, the company was able to attract $32 million in venture funding since 2001 as it becomes apparent that data storage firms and other digital-age services would increase the demand for secure back-up power.

"We see this as being a very fast-growing marketplace," said Maurice Gunderson, managing director of Nth Power LLC, a San Francisco venture capital firm that has invested $5.6 million in Pentadyne. "Instead of trying to upgrade the whole grid, which is certainly impractical and some would say impossible, what you do install the Pentadyne product right at the place where the digitally reliable power is needed."

Each Pentadyne flywheel unit is the size of a refrigerator and supplies 120 kilowatts of power, enough to run a small data center. They can be linked to supply the 750 kilowatts to three megawatts needed to run a 1 million-square-foot factory.

Traditionally, back-up power has been provided by a combination of lead acid batteries and generators. Lead acid technology is still far cheaper up front, costing only $17,000 for an equivalent 120 kilowatts of power. But Pentadyne claims its flywheels will operate for 15 to 20 years, compared with just two to three for a lead acid battery pack. Another selling point: they are easier to maintain and don't have the disposal hassles of a big battery.

Those sales pitches are apparently working. Aside from the Savanna Depot contract for the data centers, Pentadyne is selling the systems to Liebert Corp., a Columbus, Ohio firm that installs uninterruptible power systems to data centers, hospitals, hotels and financial and government institutions.

Pentadyne also was awarded the contract to provide 500 flywheel systems for nuclear silos to Beaver Aerospace & Defense Inc. of Lavonia, Mich. as part of the federal government's security modernization program for intercontinental ballistic missiles.

"We're really cranking. We have a bright outlook for right now," said Dave Townley, Pentadyne's senior vice president of business and product development.

PROFILE

Pentadyne Power Corp.

Year Founded: 1998

Core Business: Kinetic energy generators

Revenues in 2004: $700,000

Revenues in 2005 (projected): $2 million

Employees in 2004: 30

Employees in 2005: 40

Goals: Expand into Asia this year and Europe in 2006

Driving Force: Need for uninterruptible back-up power to keep manufacturing, security and data processing systems running