JOHN SHEGERIAN: Welcome back to Green is Good and we’re honored to have with us today Michael Sund. He’s the Vice President of Communications and Investor Relations for Maxwell Technologies. Welcome to Green is Good, Michael. MICHAEL SUND: Thank you. Glad to be with you. JOHN SHEGERIAN: Before we get to talking about your employer, Maxwell Technologies, let’s talk about Michael Sund. What was your journey in your life like prior to joining Maxwell Technologies and what led you to joining them? MICHAEL SUND: Well, I began my career as a journalist. I studied journalism in college and began in the newspaper business and later gravitated to the world of corporate communications, I guess you could say. I’ve been on the agency side and on the corporate side for more than thirty years. JOHN SHEGERIAN: Got it. Got it. How many years ago did you join Maxwell? MICHAEL SUND: I’m just about to celebrate my fifteenth anniversary with Maxwell. JOHN SHEGERIAN: Wonderful. Wonderful, wonderful. So obviously it was a good marriage and a good choice. MICHAEL SUND: It’s been a great experience to be involved with Maxwell. JOHN SHEGERIAN: Well, let’s talk about Maxwell. Before I ever started studying them because I knew you were going to be our great guest on today’s show, I didn’t hear much about them. Can you share the Maxwell Technologies story and who they are and what they’re doing and why they’re helping to make the world a more sustainable and greener and better place? MICHAEL SUND: Well Maxwell’s primary business is in producing energy storage and power delivery solutions based on a relatively novel technology called, ‘ultracapacitors’. JOHN SHEGERIAN: Hmm. And can you explain what an ultracapacitor is? Because I’ve never heard of one. I’m sorry. MICHAEL SUND: You’re in the majority in that regard. We use batteries as a reference because everyone’s familiar with batteries and they’ve been around for a hundred and fifty years. Ultracapacitors are, in some ways, battery-like but they have some distinct differences from batteries so let me explain a little bit. JOHN SHEGERIAN: Sure. MICHAEL SUND: Ultracapacitors charge and discharge in as little as fractions of a second. Much faster than a battery. And they use an electrostatic energy storage mechanism as opposed to a chemical reaction, which is what makes batteries operate. That creates some differences in the way they perform so rapid charge and discharge, very long life because there’s no chemical reaction, therefore no chemicals to deplete so as you know, batteries have a finite life and need to be replaced. Ultracapacitors, in many applications, will last the life of the application, don’t need to be replaced and because they don’t rely on a chemical reaction, they work normally at very high and very low temperatures. Everyone knows batteries tend to struggle when it gets cold, for instance, starting a vehicle in the morning. On the other side of it, batteries have very high energy density, meaning they store a lot of energy, a big reservoir of energy. Ultracapacitors store much less energy but in many ways they compliment ultracapacitors because they charge and discharge very rapidly, operate normally over a wide temperature range, whereas batteries have this large reservoir of energy for sustained energy output from minutes to hours. JOHN SHEGERIAN: Hmm, got it. So the benefits of the ultracapacitor and why people want and need to use them and the return on investment, how does that work? Can you help share the analysis of benefits and then the return on investments in their applications? MICHAEL SUND: Yes, well if you think about the primary application for our product today, number one is in braking energy recuperation in hybrid transit vehicles so if you think about stopping a vehicle- let’s say a transit bus that stops- every time it does that, if it’s a hybrid vehicle, it has an electric motor and instead of using friction to bring that vehicle to a stop, the software signals the electric motor to run backwards and it stops the vehicle with resistance and while it’s running backwards, an electric motor is a generator and you have an efficient storage system. You can convert kinetic energy, the energy of motion, into stored electric energy that can be reused for propulsion and that would reduce fuel consumption because that recaptured energy actually takes the place of the fuel that normally would be propelling the vehicle. JOHN SHEGERIAN: Ah ok. And so you’re saying in many applications, an ultracapacitor is working in tandem with a battery? MICHAEL SUND: That’s correct, yes. A battery is a great reservoir of energy but you can imagine in a braking system it only takes five or ten seconds to stop a vehicle and, as we all know, charging a battery in five or ten seconds doesn’t really store much energy in that period of time, whereas an ultracapacitor can fully charge in the few seconds that it takes to stop a vehicle. JOHN SHEGERIAN: I gotcha, I gotcha. So has this whole green revolution and the evolution of us driving now hybrid cars and green cars- has that been a boom for Maxwell Technologies? MICHAEL SUND: Yes, it’s been a great opportunity for us so the number one consumer of our product is in hybrid transit buses in China, where air quality is a big issue. Everywhere in the world reducing fossil fuel consumption is a strong impetus. The ultracapacitor’s ability to capture energy that would otherwise be wasted in a friction based braking sometimes and reuse that energy is beneficial to the environment in the form of reduced emissions and of course, in payback, as you talked about, in reduced fuel consumption. JOHN SHEGERIAN: Wow but Maxwell’s been around for forty-five years. What was the ultracapacitor being used for before this hybrid revolution and evolution toward hybrid vehicles? What was your core competency in terms of use and applications years ago? MICHAEL SUND: Well, ultracapacitors have only really been a mainstream commercial product for the past fifteen years or so JOHN SHEGERIAN: Oh okay. MICHAEL SUND: Maxwell’s main business prior to that was as contract research and development in a laboratory, operating under government contracts and so forth and one of the initiatives during that time, when Maxwell was essentially an R and D company, was in developing this infant energy storage technology called ultracapacitors. JOHN SHEGERIAN: Ah, got it. And by the way, for our listeners out there, we’ve got Michael Sund with us. He’s the Vice President of Communications and Investor Relations for Maxwell Technologies and if you want to follow along as we have our chat today here at Green is Good, you can go to www.Maxwell.com. It’s a beautiful website. I’m on it now. There’s a ton of great information on everything that Michael’s discussing with us and all the great applications that Maxwell is doing to green the world and make the world a better place. So ultracaps was part of the R and D work of Maxwell and has now become one of the lynch pins of this whole hybrid revolution. MICHAEL SUND: Yes, that’s correct. We’re becoming more familiar now with so-called stop-start idle elimination technology, which is a- we’re not talking about electric propulsion of cars. We’re talking about saving fuel by turning off the internal combustion engine when it otherwise would be idling such as at a red light or in stop-and-go traffic and that constant restarting- you can imagine during a commute, you might have many, many opportunities to turn off the engine and that requires a restart each time- so in the auto industry, the first application for ultracapacitors was in providing cranking power to continuously restart a vehicle and allow it to save fuel and reduce emissions. JOHN SHEGERIAN: And so you said one of your big clients is the hybrid bus companies in China. Where are else are ultracaps being applied in the United States and around the world? MICHAEL SUND: Well, our first automotive customer is the French auto maker, PSA. They make pijou and citroen automobiles in Europe and our products are in more than a million pijou and citroen cars today, again, helping them to restart and save fuel. The largest bus maker in the world, based in China, is called Yutong so they are the single largest consumer of our ultracapacitor products. We’re also providing ultracapacitors to wind turbine manufacturers globally. Our first customer was a German company called Enercon and we also service large Chinese wind turbine producers such as Gold Wind so those are some of the largest consumers of our product today. JOHN SHEGERIAN: And explain the connection with wind and grid energy storage. Is there a connection with solar and wind and what you do with ultracapacitors? MICHAEL SUND: Yes, there is and let me explain first our long time association with wind energy began with something called, ‘the blade pitch mechanism’ of a wind turbine and simply, that means that these wind turbines can damage themselves if the wind blows too hard and so they need to be able to pitch the blade of that wind turbine into a neutral position. When wind velocity is too high, ultracapacitors are used to deliver a burst of high energy to accomplish that alteration, the blade pitch. As we look to the future, renewables such as wind and solar are inherently variable. A cloud passes over a solar array. Wind velocity fluctuates. And ultracapacitors can be used to smooth the output from a renewable source into the grid, which likes steady input and has difficulty providing reliable service to you and me if the inputs fluctuate too much. JOHN SHEGERIAN: Is your ultracapacitors already at work due to the California Renewables Mandate? MICHAEL SUND: Well, we last year, received a grant from the California Energy Commission to develop a demonstration project putting ultracapacitors together with a solar array to, again, improve the consistency of the solar array’s output into a micro grid on the University of California’s San Diego campus. JOHN SHEGERIAN: And if that works, then that’s a paradigm that can be replicated if that works? MICHAEL SUND: Yes, well, as you know, California has mandated that a third of our energy consumption here must come from renewable sources by 2020 and that’s a significant challenge for the grid, again, to manage consistent output with variable input with a high percentage of total energy production coming from renewables and we’ve already seen this in Germany and other places in Europe where renewables count for a very large proportion of energy generation and so the management challenges that come with that present a real great opportunity for ultracapacitors. JOHN SHEGERIAN: How big is the ultracapacitor world? Is Maxwell the leading brand in the world for ultracapacitors or are there fifty competitors of yours now? How does that work in terms of your competition? MICHAEL SUND: I would say we are a leading producer. In certain categories I would say we would be the leading producer in transportation. Looking at the grid, we are the leader. We have some Asian competition in applications in things like consumer electronics, where Maxwell doesn’t focus its product development efforts but the whole business is fairly new compared to batteries, the main energy storage technology and so I’d say the total worldwide market is certainly less than half a billion dollars today, whereas the battery industry is tens of billions or perhaps a hundred billion dollars. JOHN SHEGERIAN: Wow. But the ultracapacitor market is growing, I take it? MICHAEL SUND: Growing very rapidly. Maxwell, with its ultracapacitor business, has seen compound annual growth in ultracapacitor sales approaching 40% year after year for the past five or six years. JOHN SHEGERIAN: Wow. So does any U.S. car company use your ultracapacitors? You said the French company does. Does any of the U.S. car companies use it yet? MICHAEL SUND: None are in production but we are engaged in development activity with auto manufacturers and with tier one suppliers to auto makers globally and so I would say that we are very optimistic that we will be able to talk about applications with U.S. autos in the not-too-distant future. JOHN SHEGERIAN: I know you work with education facilities, SoiTec and UCSD. Share a little bit about what else you’re doing there. Was that the grid energy storage program or is there other things you’re doing also? MICHAEL SUND: Well, SoiTec is a leading producer of solar arrays. They use a particular form of technology called, ‘concentrating focal voltaic’ and so SoiTec has installed solar arrays at University of California – San Diego, which is striving to become energy self-sufficient, if you will, or more self-sufficient so making those solar arrays more efficient and consistent with UCSD’s micro grid is a role for ultracapacitors and we will be working with SoiTec on a larger installation in the California desert as we move forward with this California Energy Commission sponsored program that I described earlier. JOHN SHEGERIAN: We’re down to the last minute or so. What’s the biggest potential that you see and the leadership at Maxwell Technologies sees to grow your market share and to grow your sales in the coming years? MICHAEL SUND: Well, the biggest consumer of energy worldwide is transportation and so making transportation more efficient, recapturing braking energy and helping to reduce consumption of fossil fuels and then the whole realm of energy generation, as we’ve talked about, so the transportation and the grid offer limitless opportunities for our products. JOHN SHEGERIAN: Got it. Thank you, Michael, for joining us today. For our listeners out there that want to learn more about Maxwell Technologies, go to www.Maxwell.com. Thank you, Michael Sund for your wonderful energy and sustainability work at Maxwell Technologies. You are truly living proof that green is good.