09 May Why We Invested in Ensemble
Today, I’m excited to announce that we are welcoming Ensemble Energy into the Intelis Capital portfolio to help them continue their mission to enable renewable energy sources to become more competitive by implementing more efficient operations and maintenance. Through their machine learning platform developed from years of industry knowledge, Ensemble empowers operators to better control costs, increase energy output, and lengthen the life of critical generation assets.
Sandeep and Rob are truly respected experts in their field – a quality that matters in industries like energy where the best entrepreneurs tend to bring domain-specific knowledge and can apply it with innovative software platforms to modernize operations and provide meaningful value.
Needless to say, the credentials of the team are impressive, Ph.D.’s and master’s degrees from top universities like Indian Institute of Technology, Stanford and Maryland, but more importantly in our conversations with Ensemble’s customers, all of them went out of their way to praise Sandeep and Rob not only as founders but as people.
Rising Expectations and Costs
As our grid continues to see the penetration of renewables and subsequently lower energy prices, wind farms will no longer operate in a passive, volatile way on our grid systems. Instead, they will be required to be more flexible and dynamically controlled to help maintain system integrity and respond to market conditions while operating at part-capacity. This change in operating conditions will require owners and operators to better model the impact of maintenance on lifetime assumptions and create turbine life projections that can be continuously re-evaluated and scrutinized.
In North America alone, wind turbine operators are projected to spend over $40B in O&M by 2025 a figure does not include issues like false positives and the opportunity cost of downtime due to equipment failure. Not only are O&M costs increasing, but the current fleet of wind turbines is aging and will reach an average age of 7 years in 2020 – the exact age where parts are significantly more at risk of breaking down. As these trends play out, we believe Ensemble is well positioned to predict failure and will enable operators to protect themselves against significant downtime while extending asset life by refitting with spare parts that cost as little as 5-20% of a new turbine.
Offshore Wind Growth
The fastest growing segment within the wind industry is the offshore market, particularly in Europe and China. As you might expect, the operations and maintenance costs of these turbines are much higher than their onshore counterparts. In some cases, O&M costs can be as much as 5 times higher.
Two unique challenges lead to this significant uptick in operations and maintenance spend: weather and access. Ocean storms and significant waves can limit the windows of time O&M professionals can access a turbine thus predicting WHEN an asset will fail becomes a crucial feature.
Additionally, accessing an offshore wind turbine isn’t as simple as driving up to it in a truck and crane. Logistics account for as much as 50% of maintenance costs for offshore wind owners, and as a result, the industry places a higher priority on asset monitoring sensors and accurate insights since companies can’t afford to move people and equipment when it isn’t necessary.
We’re thrilled to be partnering with Sandeep and Rob as they look to build a company that optimizes one of the crucial renewable energy sources and are excited to see them grow with this new round of funding.