June 25th, 2019 — Over the last decade, global installed wind capacity has nearly quadrupled. By the end of 2018, global capacity reached 597 GW, with 50 GW deployed in the same year. Since its peak in 2009, the cost of wind energy has fallen by $50/MWh, making the levelized cost of energy competitive with gas and other low-cost forms of energy.
While falling costs are a key driver of growth within the wind industry, they also serve to increase competition and decrease margins for wind developers, owners, and managers, resulting in a heightened focus on optimizing asset performance and lifespan.
Opportunity in Effective Operations and Maintenance
Wind R&D and hardware expenses are increasingly being overshadowed by ‘soft-costs’ such as permitting, installation, and operations & maintenance (O&M). Between 2017 and 2027, an estimated $40B will be spent on wind O&M in the US alone, where average costs reach up to $48,000/MW/yr. Asset depreciation and the anticipated phaseout of the federal PTC will further squeeze margins for asset owners and managers in years to come.
Effective O&M offers a tremendous opportunity to restore and expand profit margins in the wind industry. Asset owners and managers are increasingly turning to predictive analytics software to preempt catastrophic failures, target maintenance, and optimize performance with long-term asset health and productivity in mind.
Although many such solutions exist, incumbents in possession of the vast quantities of data needed to train AI algorithms are reluctant to grant access to third parties, who build solutions around proprietary data to the benefit of the industry at large. While leading companies recognize the need to partner with third parties, ‘buyer’s market’ dynamics result in rigorous piloting and long sales cycles through which few startups survive.
Powerhouse Ventures Invests in Ensemble Energy
Ensemble Energy is uniquely positioned to thrive in this environment through a combination of industry expertise, robust software, and data access. Ensemble leverages machine learning and artificial intelligence in combination with sensor data to predict failures, optimize performance, and improve forecasting for wind assets, enabling owners and managers to extract untapped value from their portfolio.
Ensemble leverages 28 years of wind experience from veteran founders Dr. Sandeep Gupta and Rob Budny, using data conventions and outputs intuitive to operators and engineers. The software, which utilizes a physics-based digital twin model, identifies underperformance and prescribes actionable insights that enable users to improve efficiency by 1-2% across an entire portfolio.
Ensemble Energy currently monitors over 1 GW of capacity through initial pilots and contracts with EDF Renewables, E.ON Energy Services, and Novatus Energy. The team plans to increase monitored capacity to 3 GW by the end of 2019.
Powerhouse Ventures led Ensemble Energy’s seed round with participation from Intelis Capital, and we look forward to leveraging our network in support of their stellar team.
Welcome aboard, Ensemble!
Special thanks to Alex Harbour, Eli Oftedal, and Ry Storey-Fisher
To read more about Powerhouse Ventures’ other publicly-announced investments, visit our Insights page.