- Established in 2010
- Spin-out company from the School of Electrical and Electronic Engineering
- Founded by Professors Ian Cotton and Simon Rowland
- Joint venture with EPL Composite Solutions Limited, Loughborough
- Electricity transmission
- IP – Patents, trademark, design rights, know-how
- Funded by UMIP Proof-of-Principle Funding (PoP), National Grid, Scottish and Southern Energy Power Distribution R&D Funding
- Awards: 2010 Energy Innovation Awards – Award for Energy Performance
- Highly-commended for 2010 Energy Innovation Grand Prix
“Our goal is to make a genuine difference to power systems within the UK and globally”
Professor Ian Cotton, co-founder and director
About Arago Technology
Arago’s technology is a platform technology which has been exemplified in its first product offering which is an electrically insulating composite cross-arm for transmission towers. This approach allows tower voltages to be increased without any change to the overall profile of the tower structure or height. It is hoped that rolling out the technology will enable National Grid and other global transmission companies to begin to meet the 50% increase* in electrical energy that is anticipated to flow through the electricity system to facilitate the decarbonisation of energy and the introduction of electric vehicles/heat pumps by 2050.
(*Source: The Carbon Plan, HM Government, 2011).
The unique insulating cross arm can be retrofitted to existing transmission towers or is an option for new line build. Multiple trials have been secured with Scottish Hydro Electric Transmission Ltd (SHETL) and National Grid (NG) and since November 2010, 4 Composite Cross Arms have been installed in an exposed Scottish Highland location and have successfully withstood regular wind speeds of over 100mph as well as significant levels of snow. Additionally, 2 Composite Cross Arms at 400kV have been installed at St. Fergus.
We met up with Professor Ian Cotton, co-founder and director of Arago, to find out more about the company’s journey and his personal experiences of setting up a spin-out…
At what point during your research did you realise that there could be commercial potential for your discovery?
We have had a long standing R&D relationship with NG and in 2008 a conversation ensued with their R&D manager about developing insulated, overhead line towers, made using fibre reinforced composite materials. Essentially, they were looking for a solution to increasing overhead line power. As an electrical and electronic engineering group, we had no structural materials experience but shortly afterwards, we had a phone call from EPL Composite Solutions (EPL) who specialise in this area. NG asked us to conduct a feasibility study so we joined forces with EPL. The study refocused our thinking and we moved away from the idea of plastic overhead line towers to using just the plastic insulating cross arm which had the potential for dramatically increasing overhead line power. This resulted in a joint invention disclosure to UMIP.
How did you find the process of setting up a spin-out?
It became clear that there was a business model which was more than just a licensing opportunity. There was scope for a spin-out, joint 50/50 with EPL and the University. The commercialisation process from my point of view has been relatively pain free as the support from UMIP has been fantastic. UMIP Venture Manager, Dr Frank Allison, has managed the process and legals and has ensured the technology program has been delivered all the way through the R&D. I was left to do what I’m best at!
The close working relationship with SHETL has also enabled me to understand other research opportunities and business needs within that company.
What would you say was the greatest challenge?
I think our biggest challenge has been managing expectations. Companies continue to ask when the technology will be available. However, until we know it is reliable, we cannot commercially deploy the technology. If it fails in the field then it destroys the reputation and business. The technology is currently being trialed in 2 locations in Scotland; one in snow and ice conditions and the other in a sub-station where it is being tested live at 400,000 volts. Testing and type testing are vital parts of getting the product installed onto the networks. Over the next 12-18 months Arago’s focus will be to get the product approved to enable the first installations of a commercial product.
I suppose you can say the biggest challenge has been keeping the lights on. If the lights go off we’ve failed.
Did you receive any funding?
In total we have received almost £2.7M from NG and SHETL, as part of their Innovation Funding Incentive Portfolios, and UMIP Proof-of-Principle Funding (PoP) without too much share dilution which is another benefit of UMIP’s assistance. Some of this went to the University for our research and some were internal costs to NG and SHETL to carry out the trials of the cross-arm. We make an attractive investor case and when we look to seek equity funding in the next 6 months, we believe we have a strong commercial case.
How did you find dealing with investors?
The first time we really dealt with investors from a business point of view was at the UMIP PoP investment committee. Our UMIP Venture manager provided us with a lot of assistance in preparation for this. The investment committee provides good battlefield training. I’m used to speaking from a technology perspective but it prepares you for questions which will be asked in the future by others.
What were your aspirations for getting involved in the commercialisation process and being involved in a spin-out?
There were 2 key agendas. Firstly, it allows the University to deliver impact and there’s an increase in importance to participate in commercialisation. Through our technology, we’ll be delivering new and renewable energy.
Secondly, with the relationship with NG being so strategic, it creates applied research. As the funding has been through Ofgem’s Innovation Funding Incentive, it’s important to deliver impact beneficial to us all, as consumers, of the innovation in the commercial world.
Money is nice but when you enter into this process you don’t think of becoming a millionaire. Our goal is to make a genuine difference to power systems within the UK and globally. If we drive down the motorway and see one of our cross arms then we’ve done well.
How did you find the transition from the academic to the commercial world?
To be honest I’ve largely stayed in the academic world. I’ve been sheltered from the commercials by UMIP. I think when we go from being a shell company to having working capital then I’ll have more involvement in the business from a commercial point. So far, the business plan has been outlined to me and I’ve been given the opportunity to comment but I have not been expected to outline it. That isn’t where my skills lie. Furthermore, we have brought on board Robin MacLaren as Executive Chairman. He was Managing Director of Scottish Power and Chairman of Psymetrix. It is early days but he has started to provide guidance to the team.
What factors do you feel are essential in starting and nurturing a spin-out company?
I would say technical knowledge and depth. You also need confidence in your product. You need to be able to justify why it’s better than other solutions. Another key factor is enthusiastic partners who want to see your product developed. You also need to keep focused and listen to what the UMIP Venture Manager advises you – they’re there to help the academic team.
What do you feel are the benefits to the University in engaging in spin-outs?
I think that understanding industry challenges is important for any university. NG and SHETL now sees the University as a potential collaborator for the future and this can create further research opportunities which may otherwise have not existed. There are also benefits from a teaching perspective as I now have a much better knowledge of overhead lines than I ever had before and this will feed down into everything else that I do, from my teaching to my research.
Do you have any advice for other Manchester academics thinking of going down this route?
Don’t be modest. It’s very easy to think that your technology is straightforward and obvious. However, it’s always worth talking to UMIP. Your idea or technology may be commercialisable. I didn’t necessarily think mine was. If you don’t ask you don’t find out!
Also, don’t think that moving to the commercialisation landscape will detract from your core research. Quite the opposite, if it’s structured in the right way it can complement and indeed add to it.
What’s next for Arago?
Based on the business plan we plan to raise equity investment. We will be installing six production Composite Cross Arms at 132kV and six at 400kV on transmission networks in the UK. We have also recently commenced a collaboration with another major European utility player and plan to able to sell commercial products by Q3 2013.