This month, Edinburgh, Scotland-based Faraday Grid displayed a transformer technology it said would allow grids to handle up to 60 percent renewables without becoming unstable.

The company claimed its Faraday Exchanger product, due to be tested in Australia next year, would also reduce grid losses by up to 15 percent by automatically correcting fluctuations in frequency and voltage caused by intermittent generation.

According to a company investor briefing document, a single Faraday Exchanger would be able to control voltage by plus or minus 25 percent and power factors by plus or minus 0.7 percent, maintaining grid stability to well above current levels.

It “dynamically and autonomously controls power flow with an efficiency, reliability and speed not previously achievable,” the document states.

“The Faraday Exchanger operates slightly below the peak operating point of a typical transformer; however, its band of operation is wider and hence performs more efficiently for longer periods.”

Executive chairman Andrew Scobie refused to divulge details of the Faraday Exchanger’s underlying technology, citing proprietary intellectual property concerns, but said it involves storing energy in a magnetic flux.

The technology is patented and will be revealed in February, he told GTM. It is also scalable and could potentially be used in electric vehicles, where it might be able to extend range by more than 6 percent, or even consumer electronics, Faraday Grid said.

Faraday Exchangers will cost $6,500 per unit in the U.S. and have been designed to act as a direct replacement for traditional transformers, with a similar footprint and mass.

Models sold in Europe will be larger to account for differences between European and American grids, and will cost around $10,000 per unit.

If the power control capabilities fail, the device will default to acting like a standard transformer, Scobie said.

Faraday Grid foresees grid operators replacing their transformers with Faraday Exchangers as part of their standard replacement cycles.

Ultimately the company wants to replace the traditional grid with a so-called Faraday Grid, emulating the overlay of the internet on telecommunications networks.

Transformers typically come with a 30-year lifespan, Scobie said, but many operators have delayed investments and now face a replacement backlog. That could be a $2 billion opportunity, said Scobie.

To meet its anticipated global demand for Faraday Exchangers, Faraday Grid is planning to make only the control layer semiconductors in house, and outsource manufacturing of the devices to third parties around the world.

Some of the first units will be tested at the 350-megawatt Gympiesolarplant planned for Australia next year, which will be paired with 4 gigawatt-hours of lithium-ion battery storage.

Scobie also hinted that Faraday Grid is in talks with Iberdrola’s U.K. subsidiary Scottish Power and U.K. Power Networks, the distribution network operator covering the southeast of England.

The technology used in the Faraday Exchanger was developed between 2009 and 2012. The company raised money in August from the Canadian clean energy infrastructure developer Amp, which is involved in the Gympie project.

In a press announcement, Amp’s co-founder, executive chairman and chief investment officer, Paul Ezekiel, said: “We believe the Faraday Grid is a disruptive technology which has significant potential to change the very nature of electricity systems.

“As we observe a necessary and rapid evolution in energy markets to accommodate increased penetration of intermittent renewables generation, Amp believes that its partnership with Faraday Grid Limited will be highly complementary to our business.”

Others are skeptical, given Faraday's secrecy. One Scottish energy expert said: “Faraday Grid is a magic black-box ‘technology’ company trying to raise money. People can't really work out what they're doing.”

Scobie said he expected this kind of reaction. “Everyone has the right to be skeptical,” he said. “One should not mess about with the energy system. The energy system is the central nervous system of our economy and our society globally, so your skepticism is well appreciated.”