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Paul Savage: Direct Current's Best Friend


Nextek's CEO sees conversion from AC to DC as a huge potential energy saver

In the late 1890s, Westinghouse won its bitter "War of Currents" against Thomas Edison. That victory set the U.S. on a course to build a nationwide electrical grid based on alternating current instead of direct current. Paul Savage, the chief executive officer of Nextek Power Systems, wants a rematch.

AC power initially won out because it could more cheaply and efficiently send energy across long distances. But many modern devices, including LED lighting and semiconductor-based electronics like computers, require DC energy. Today, each device does its own AC-to-DC conversion after drawing power from an outlet. Each conversion wastes some electricity.

Savage, 48, says if all the electricity coming into a building were converted to DC at a single point, it could reduce waste by as much as 40 percent. DC power is also much safer than AC—that was Edison's main reason for favoring it—meaning there'd be no charge strong enough to "shock, burn, or startle," says Savage.

In partnership with Armstrong Ceiling Systems, Johnson Controls (JCI), and other companies, Savage is demonstrating his vision in 31 locations around the world, including a Ford (F) factory in Detroit. In the pilots, the AC energy coming from the grid is converted to DC by one of Nextek's $1,550 power modules, which resembles a supersized power strip. The partner companies develop the equipment that delivers the DC power to devices throughout the home or business. Savage says he's planning to retrofit several homes in Detroit to run on DC as part of a green energy project run by a local nonprofit. Because DC is safe, some of the demonstration projects feature ceiling tiles with energy constantly coursing through them as if they were wires. They're safe to touch, so lights, ceiling fans, speakers, and other power-hungry items can simply be clipped into place.

Savage estimates that if DC systems take hold, they could cut the amount of energy needed nationally by 8.3 percent. Brian Fortenbery, program manager at the Electric Power Research Institute, considers Savage one of the leaders of the DC movement. "There's a pretty sizable push [for DC] from vendors" who sell power supplies, he adds. American Power Conversion, which makes AC power supplies, counters that improvements in AC technology can raise efficiency without having to invest in new DC equipment.

Savage, who holds a degree in philosophy from Haverford College, spent 15 years in finance, including time at Lehman Brothers, before turning to energy. He was so convinced that DC is better than AC that in 2003 he invested $2 million of his own in Nextek and became its CEO. He says the company may generate $2.4 million next year selling its power modules and smaller converters. "We're in a space that's undergoing dramatic change," Savage says. "There's a huge battle going on for control of the buildings."

BACKGROUND

Spent 15 years in finance after graduating from Haverford

GAMBLE

Invested $2 million of his own money in Nextek

VISION

Safer, more energy-efficient buildings running on DC power

Green is a reporter for Bloomberg News.

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