Optimal Technologies International on Tuesday launched its first product, a smart-grid system that the company claims can improve utility grids’ energy capacity by at least 10 percent.

Founded in 2000, the company has created software called AEMPFAST that works to monitor and control the flow of power to customers.

The system gathers information from sensors embedded in the grid, which transmit data about electric transmission, distribution and generation. The software then acts as the grid’s brain, using the data to find trouble spots, such as congestion or heavy usage, and to suggest how the grid should react to use its electricity most efficiently.

Optimal also claims the system can help utilities figure out where to place new power sources and how to keep the flow of energy moving.

Roland Schoettle, CEO of the Raleigh, N.C.-based company, said Optimal conducted a pre-commercial test with California's Sacramento Municipal Utility District to determine where it should place 10 different power plants that were expected to add a total of 158 megawatts of electricity to the grid.

By selecting spots that helped free up congestion in places where electricity was getting stuck, Optimal’s technology improved the grid's efficiency, effectively adding an additional 82 megawatts of usable electricity on top of the 158 megawatts of newly generated electricity, for a total of 240 megawatts.

"The argument is more generation, more flow," Schoettle said. "But if you shove too much in without properly controlling the network, all you do is congest it."

Optimal's business model will be key to getting its first customers in an industry that has been adverse to spending money for new infrastructure. The company will charge nothing up front, instead taking a cut of utilities’ savings.

"Our business is one of no risk," Schoettle said.

In October, Optimal raised $25 million in a second round of funding, bringing its total capital to $36 million (see IN BRIEF: Optimal Technologies Nabs $25M for Energy Management).

Schoettle said the company doesn’t need more investment dollars for now. However, Optimal might raise up to $100 million next year, he said.

But Optimal isn't the only one working to optimize the grid. Companies like Arlington, Va.-based GridPoint also is looking to help utilities improve grid management. In September the company raised $32 million as part of its fourth round of funding (see GridPoint Raises $32M, With More to Come).

Among those Optimal views as direct competitors is Siemens' Power Technologies International, which provides some of the most popular software for grid management today.

Transmission planners use software such as Siemens’ to evaluate the grid's electricity load to prepare for outages and other tasks.

They will sometimes run 100 different queries on the software to understand the various possible reactions to different scenarios – such as if a transmission line goes down or if a utility is ready to connect a 500-megawatt wind farm to the grid – in an attempt to come up with the best response, said David Hawkins, a lead industry relations representative for the California Independent Systems Operator, a nonprofit dedicated to analyzing the San Francisco Bay-area blackout of 2000.

According to Hawkins, Optimal’s software potentially can figure out the best actions to take based on only one query, while other software requires multiple queries to assess each of the different ways a situation could be handled.

Hawkins is familiar with Optimal because his organization previously worked with the company to improve transmission-planning tools, he said.

But Hawkins said he didn't know whether the company had delivered on its promise of productivity savings.