Heron Power, established by ex-Tesla executive Drew Baglino, revealed on Wednesday its success in securing $140 million. This capital infusion is earmarked for the construction of gigawatts of cutting-edge solid-state transformers, intended for use in data centers and power grids.
Such rapid progress is noteworthy for the fledgling company, having just completed a $38 million Series A funding round in May. Baglino indicated that Heron Power wasn’t initially seeking further investment; however, following strong customer interest in acquiring over 40 gigawatts of solid-state transformers, the decision was made to pursue additional capital.
“When our clients show such strong engagement, it’s imperative that we reciprocate,” stated Baglino, Heron Power’s Chief Executive Officer, during an interview with TechCrunch. He emphasized, “Our pace must accelerate.”
The swiftness of Heron Power’s fundraising efforts underscores the significant role data centers play in fueling the need for solutions capable of swiftly supplying power to their servers. Baglino, with almost twenty years at Tesla where he headed the powertrain and energy divisions, is well-acquainted with expeditious operations.
Andreessen Horowitz’s American Dynamism Fund and Breakthrough Energy Ventures spearheaded the Series B funding round. Other contributors included Capricorn Investment Group, Energy Impact Partners, Gigascale Capital, and Valor Atreides AI Fund.
For over ten years, solid-state transformers have been in development. Yet, it’s only lately that they have achieved a level of maturity making them suitable for deployment in data centers and other substantial, energy-demanding installations.
This novel technology aims to supplant traditional iron-core transformers, which have maintained largely the same design for over a hundred years. While iron-core transformers are economical and effective, they possess considerable bulk and produce substantial heat. Solid-state transformers, conversely, are more compact and achieve greater efficiency by consolidating multiple components, thereby addressing two primary hurdles faced by data center developers.
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Furthermore, solid-state transformers possess the capability to intelligently regulate power flow, encompassing diverse electricity sources such as wind, solar, and battery storage. This is feasible due to their reliance on semiconductors rather than inert metallic components.
The company’s solid-state transformers, known as Heron Link, are designed to transform medium voltage electricity into the 800-volt power required by Nvidia’s standard rack configurations. Each unit can manage 5 megawatts, with every device incorporating dozens of modules for power conversion. Should a module malfunction, replacement is possible within approximately 10 minutes, a significantly quicker process than swapping a conventional, monolithic transformer.
Additionally, every Heron Link unit integrates specialized lithium-ion batteries. These batteries can rapidly discharge, offering 30 seconds of power to facilitate a seamless shift to auxiliary power sources, such as grid-scale batteries, thereby enabling data centers to forego uninterruptible power supplies.
The removal of various components by solid-state transformers also eradicates numerous potential failure points and lowers expenses. Baglino remarked, “We are able to eliminate 70% of the necessary apparatus.” He added, “In specific data center scenarios, this could translate to cost reductions by a factor of ten.”
At present, data centers constitute merely one-third of Heron Power’s commercial operations, according to Baglino. The remaining portion is divided between solar energy and large-scale grid batteries, both of which gain advantages from the rapid response and adaptability of solid-state transformers.
Heron Power intends to allocate the recently acquired capital towards constructing a manufacturing facility. This plant will possess the capacity to yield 40 gigawatts of Heron Link transformers each year, representing approximately 10% to 15% of global annual output excluding China (or roughly 5% to 10% of overall worldwide demand). This volume is comparable to half of Texas’s peak electricity consumption.
Baglino stated that the corporation aims to commence trial manufacturing in early 2027, subsequently escalating production throughout the subsequent two-year period.
Heron Power is not the sole entity engaged in advancing solid-state transformers. Given that numerous aging grid transformers are nearing their end-of-life, the competitive landscape is expected to be fierce. However, the startup’s substantial new capital injection, combined with Baglino’s proven expertise in scaling manufacturing, could provide a significant edge. He affirmed, “Our efforts will be relentless.”
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