Fellows Research Group,
Inc.
Executive Summary
The Business
Fellows Research Group, Inc., a solely-owned private corporation, in Austin, Texas, USA, was founded in April,
1993. FRG is located at 112 Clear
Spring Rd., Georgetown, TX, USA 78628.
Phone (512) 864-2097. E-mail frg@io.com
The
purpose of the business is to develop and
commercialize a patented clean energy technology. The invention
is an
innovative generator that uses sound waves to convert heat into
electricity. It has been developed through 25 years of
theoretical
research and practical experimentation. The market demand for
energy conservation and energy generation equipment from alternative
sources is expanding at the rate of 25% per year. Our product is
truly a new and practical device that will change the energy industry
and the lives of energy consumers dramatically.
The owner has a BS in operations management, an AS in electrical
engineering
technology
and PE certificate courses in mechanical and electrical
engineering. He
managed a federal civil engineering battalion of 620 personnel and a
$50M
budget for 21 years. He performed the primary research with
$158,000 of
his own money. Aggregate expenditures over 25 years total a bit
over $300k. The research history dates back to 1978, and can
be
examined at the company website:
http://www.io.com/~frg
The links for investors to do their due
diligence are
all there also.
Product Innovation
The patented Thermoacoustic Resonator (TAR) is a thermoacoustic
engine-generator and heat pump that uses sound waves to convert any
heat
gradient into electricity. It is mechanically and electrically
simple to
make, reliable, and cost competitive. Any source of heat; exhaust
heat
from engines and industrial processes, solar energy, geothermal energy
or
combustible fuels, even body heat - the TAR can use them all to make
useful
power. Using combustible fuels, emissions of harmful pollutants such
as NOx
and CO are insignificant, and will meet any current standards.
The TAR has only one moving part. It is easily scalable, and size
can
range from a patented microchip with a few watts of capacity
(MEMS-TAR), to a
larger Thermoacoustic Cycle (TAC) generator of several tens
of
kilowatts. Both devices can be used as individual units, or
arrayed in
banks of multiple machines to produce megawatts of power. The
MEMS device
can be printed in panel array units of 100 Watts each, or more.
These devices convert 63% of the Carnot energy in a heat source such as
solar
energy or waste heat from engine exhaust into alternating current
electricity. Sixty-three percent is the
maximum efficiency
possible in this oscillatory thermodynamic system. That is twice
the
thermal efficiency of a gas-turbine generator, and 18%-20% more efficient
than
current combined-cycle generator systems used by the electric
utilities.
The TAR is extremely simple to fabricate, and the manufactured cost
per Watt
of generating capacity is half that of any competing technology,
old or
new.
• TAC/TAR
$0.25/Watt
• Fossil Fuel
Plants
$0.43/Watt
• Wind
$1.00/Watt
•
Nuclear
$3.50/Watt
•
Photovoltaics
$4.50-$6.25/Watt
Business Strategy
Research and development will remain in Austin, Texas. We need five engineers, a couple of machinists, two techs and a laborer, and a
secretary, and facilities to work in. We hope to expand the
R&D division as we transition and grow from a self-development stage, into a contract R&D lab.
We initially intend to license production of the equipment.
There is ample production capacity and capability in the USand
abroad. No expensive tooling investment is necessary.
The
Mechanical TAR can be produced by ordinary sheet-metal and electric
motor
production tooling. The MEMS-TAR can be produced by any
computer chip
wafer facility, using the same equipment. We will earn royalties
on the licenses, and perform contract engineering work such as plant
design and new applications development, to support licensees.
Marketing Strategies
The Mechanical TAR can play in two power generation sectors; as a
primary
generator, and as a secondary generator that recovers energy from waste
heat.
Automotive: A 24 mpg compact vehicle produces 68 kW of waste heat
emissions.
41 million new vehicles are produced annually. @$250 per unit, a
$10.2
billion market for the TAC. A 1% share is worth $100
million. The
TAC can convert that waste heat into 3 kW - 10 kW of electricity and
air-conditioning
per vehicle, reducing global annual fuel consumption and exhaust
emissions by
20 million tons. It is also an ideal engine for hybrid vehicles.
Commercial Transportation: Commercial carriers & shippers use
200
billion gallons of fuel annually. @ $3.00/gl, fuel is 81% of
operating
costs. This $400 billion industry affects the economics of every
other
industry in the USA. The TAC can reduce operating costs by 12%
-
18%. Ten percent of the minimum savings is a $5 billion market
for the
TAC.
Waste Heat: We see a huge niche market (1% of estimated fuel savings is USD$6
billion) in existing and new businesses that generate large volumes of
waste
heat; such as power plants, refineries, materials
processors,
laundries, canneries, smelters, incinerators, and commercial-scale
steam
boilers and furnaces. These industries are large energy consumers, and
are
under heavy pressure to improve their operating cost efficiency for
both
competitive and environmental reasons.
In the diverse waste heat recovery market, we can easily compete
against the
price of wholesale electricity, which currently averages >$0.06 per
kilowatt-hour, and we can create markets where there are no competing
technologies,
such as in transportation and biomedical. We should enjoy a 400% - 500%
wholesale
profit margin from these market segments.
Distributed Power: This invention is the seed technology for a pantheon of new manufacturing,
installation and
service industries in distributed energy systems. An
estimated $500 billion new industry. Residential CHP systems represent a $5 billion market (Based
on 10% of
$500 billion in new housing starts annually).
Independent power and A/C systems for commercial
construction is$4
billion (based on 10% of $438 billion in new construction
starts). These can take the form of solar, geothermal or fuel-fed
systems. We think this is the wave of the future, with a decline
in central utility grids and plants. Each structure will have its
own power plant.
Commercial Electric Power Generation:
The above notwithstanding, existing utilities can increase output and
reduce fuel cost without building new plant capacity by capturing waste
heat, so there is a potential market* there. In some
heavily-regulated applications,
such as utility plants, we will need the cooperation of the OEMs (GE,
Siemens,
Mitsubishi, etc.) in order to penetrate the industry. We are
exploring
the possibility of licensing the technology to them. If we are
successful
in that respect, they can take on the burden of development and
marketing for
that specific arena.
Solar Energy: Even at present costs of $4.25/Watt, the solar electric market is
currently $15
billion, and expanding at a current rate of 25% - 30% annually. At
present rate of growth, it is predicted to be greater than $150 billion
by
2020. Advent of our MEMS-TAR will change the market dynamic and
accelerate market growth. The MEMS-TAR cost is 6% that of
conventional
solar cells. We can control 90% of an estimated $50 billion
industry by
2015, in distributed power for homes and businesses, in commercial
power
generation, and in satellite power systems.
Bio-Medical: The MEMS-TAR has applications in both power
generation and
biomedical fields. It can generate useful electric power from
body heat
and reduce or eliminate the need for batteries in artificial hearts,
pacemakers, ventricular assist devices, hearing aids, artificial organs
and
drug dispensing implants. Implanted under the skin, it can
eliminate the
risk of secondary infections by eliminating the need for exposed
penetrations. This is a worldwide market with almost limitless
potential
applications for powering muscle servos for artificial limbs,
artificial vision
and other sensory, organ function and mobility prostheses.
Implementation Plan
The technology is near term. Twenty-five years of research and
experimentation
have reduced the theory to practice in the form of a working
demonstration
engine. We can generate 20 kg/cm2 of acoustic power. The linear generator is the only component
still under development. Electromagnetic
induction is a well established science, used in billions of commercial
products. The magnetic design theory is
a well developed and mature science, but linear generators are new, and
present
a challenge in terms of efficiency. These
are not insurmountable obstacles, and efficiency is simply a matter of
time. At the low cost of our
technology,
this does not present a market barrier.
It simply means that specific power (efficiency per unit weight)
will
improve over time, and open up new markets in defense and space
exploration.
We are ready to commercialize the technology. We only
lack
funds for personnel and facilities.
We need to raise USD$5M to hire a team of engineers in
thermodynamics, acoustics, materials and electrical disciplines, and to
operate
for 24-30 months. These engineers will learn the technology and
become our
division chiefs and team leaders as we grow. In 12-18
months, we
will have a packaged, market-ready product.
We can complete development of a 1 kW - 5 kW TAC generator in 12
months, and a MEMS-TAR within 24 months.
At the end of the 24 month development period, we will need
second-round financing for business development--licensing, marketing and
promotional efforts.
Risks and Threats
In the public utilities arena, our competitors are makers of gas
and steam
turbines for combined-cycle generators. Our device is cheaper and
more
efficient. The fossil fuel generating equipment industries such
as G.E.,
Caterpillar, Siemens, Mitsubishi, etc., have the most monetary and
political
power of any of our competitors, but if they become licensees for the
TAR, they
can become allies rather than competitors. We cannot fight them,
so this
is the approach we must take.
For small prime power generation equipment and emergency back-up (UPS)
systems
(~$12 billion), we have a host of competing technologies, including
fuel cells,
which cannot compete with us on any level; cost, durability,
dependability or
capacity. The TAR can achieve a 25% market penetration within
five years.
The renewable energy industry is currently dominated by photovoltaics
(PV)
makers. PVs currently cost $4.25/Watt wholesale, compared to a projected $0.50/Watt for
the
TAR. They cannot compete with the MEMS-TAR ($0.10/Watt) in any
applications except for small equipment, such as office equipment and
calculators. We will dominate the distributed power industry, and
satellite power systems. They have a strong business association,
and are
likely to be aggressive business adversaries.
Other emerging technologies such as wind power will also suffer if the
TAR gets
to market. Wind costs twice as much as the TAR. Wind
and PV
makers stand to lose million of dollars in government subsidies, and
loss of a
growing market that has doubled in just the past two years. There
is a
great deal of vested interest in these two technologies, and they will
fight
politically because they cannot compete economically.
In biomedical applications, no other equivalent competing technologies
are
known. At present, batteries are the only competing power sources
applicable.
Summary of the Investment Opportunity
The global electricity market is gigantic, and will continue to
grow. The International Energy Agency (IEA)
projects that 3000 GW of new
generating capacity will be required by 2020. Value: $3
trillion
USD (2006 dollars).
Competitively priced renewable energy technologies can capture a
leadership
position in energy and become the economic engines of the future. 1% of
the
market is worth a minimum of $30 billion. The only renewable technology
competitive
with fossil fuels is the FRG TAR Generator. Wind is a distant
second.
The TAR will impact the electric power industry as no technology has
since its
inception in the early 20th century. Investors can
exit in 5 years with a 10,000:1 ROI.
A Video Presentation of an Operating Engine is Available at http://www.io.com/~frg
Updated June 2008