If Frank Ramirez had his way, his company's innovative cooling unit would be plugged into every commercial rooftop air conditioner in the United States -- a potential $30 billion market. Mr. Ramirez is chief executive of Ice Energy Inc., a manufacturer of an ice-chilled cooling system that takes the load off air conditioners during the day, when they're working their hardest and demand for electricity is at its highest.
"Electricity is the only commodity in the world that can't be economically or efficiently stored," says Mr. Ramirez, a Stanford MBA and former attorney at the Securities and Exchange Commission.
"Historically, it's been both expensive and typically bad for the environment and grossly inefficient."
Ice Energy's answer to the storage quandary is the Ice Bear 50. The unit, which costs $15,000, is the size of a small refrigerator and plugs into rooftop air conditioning units of commercial buildings. The system reduces peak demand by up to 95% and shifts 93% of electricity consumption for air conditioning from afternoon on-peak hours to nighttime off-peak. The Ice Bear makes ice at night, when the demand for electricity is low and at its cheapest. During the day, when the air conditioning unit is turned on, the pump sends warm refrigerant through the ice. The coolant is chilled and then pumped through pipes into the existing air conditioning system. Conventional air conditioners use a lot of electricity to produce cold refrigerant.
"What is incredibly apparent now is that the world is moving in the direction of adopting different approaches in how we manage energy, which makes Ice Energy a no-brainer," says Pete Higgins, founding partner of venture capital firm Second Avenue Partners in Seattle and one of Ice Energy's investors.
Headquartered in Windsor, Colorado, Ice Energy was founded in 2003 by Mr. Ramirez, Greg Tropsa, and Brian Parsonnet. All are self-described serial entrepreneurs who have a passion for the environment and an understanding of the problems associated with the country's overloaded power plants. The three, along with help from friends, kicked in the first $10 million to start the company. The company raised another $25 million from Goldman Sachs and three venture capital firms.
In May, Ice Energy will debut an updated model of the Ice Bear 50. The newer unit, called the Ice Bear 30, is smaller and will cost around $6,000. It is also designed for a broader target audience. The much larger and customized chilled-air units operate on about 2% of the nation's buildings, like skyscrapers, hospitals, and universities, the other 98% of commercial buildings are cooled with refrigerant-based systems.
"The Ice Bear 30 is designed for that sweet spot," says Mr. Ramirez. "It's potentially a $30 billion-a-year opportunity."
This clean technology, known as "permanent load shifting" (PLS) is being pushed by the California Public Utilities Commission after sweltering heat waves strained the state's power grids triggering blackouts. These new energy-saving initiatives have been a boon for companies like Ice Energy. In the last 18 months, Ice Energy has teamed with numerous utility companies, including Pacific Gas & Electric Company (PG&E) and Southern California Edison. For example, PG&E's "Shift and Save" initiative offers rebates and annual incentives for commercial users that add the Ice Bear system to their air conditioners. More than 95% of the company's sales come from utility company partnerships. Ice energy is projecting sales of $15 million this year, up from $1 million in 2007.
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