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Episode 41: Piper Foster Wilder

This week, Jon Powers sits down with Piper Foster Wilder, CEO of 60 Hertz, a microgrid services company, to discuss how microgrids can reduce diesel dependence in rural Alaskan communities. They discuss how new technology is empowering these communities who mhave been plagued by operation and maintenance failures, and living with energy uncertainty.

Piper is responsible for providing a capital solution for project finance, economies of scale, and providing a software platform for power plant operators called Pinga. Prior to Alaska, Piper was Vice President of Amatis Controls, an Internet of Things manufacturing start-up based in Aspen. She also served as the Board Chair of the Colorado Solar Energy Industries Assocation. Piper is also a Germen Chancellor fellow of the Alexander von Humboldt Foundation.

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Transcript

Jon Powers:

Welcome to Experts Only Podcast, sponsored by CleanCapital. You can learn more at cleancapital.com. I’m your host Jon Powers. Each week we explore the intersection of energy, innovation, and finance with leaders across the industry. Thank you so much for joining us.

Jon Powers:

Welcome back to Experts Only Podcast. I’m your host Jon Powers. We have a great interview today with Alaska based Piper Foster Wilder, the CEO of 60Hertz. Piper came to Alaska with a background in renewable energy. She served in a non-profit space before launching her company as a Deputy Director of Renewable Energy Alaska Project. But prior to moving to Alaska, Piper had been involved in another startup, Amatis Controls, an Internet of Things, manufacturing company in Aspen, Colorado. And while in Aspen, she also worked at Rocky Mountain Institute and served on the board of the Colorado Based Solar Energy Industry Association. She’s a fascinating character to really be leading some interesting change in Alaska and in our conversation, it’ll help you understand why Alaska is the test bed for the developing world and the opportunity around microgrids could be really interesting there. Piper, thank you so much for joining us here on Experts Only Podcast.

Piper Foster:

Hi, Jon. Great to be with you.

Jon Powers:

So you’ve built a really fascinating career, both in the non-profit sector and the private sector, but you know, we were talking offline, you grew up in Colorado, sort of what got you interested in renewable energy and sustainability?

Piper Foster:

Well, I had the good graces of working one of my very first jobs at Rocky Mountain Institute. I had the opportunity to work closely with Amory Lovins right in his home as the organization was structured at that time. And to be honest though, it wasn’t something that I’d studied at in college or prior in my life. I was really caught on fire with the vision that I think so many people have been inspired with that aery imparted. And so from there, continued working in different energy fields, primarily in Aspen at that time.

Jon Powers:

So you transitioned, so from Rocky Mountain Institute, you also, at one point were a fellow with the Berlin based, Alexander von Humboldt Foundation. Is that correct?

Piper Foster:

That’s right, it was.

Jon Powers:

Is that why you were at Rocky Mountain or is that separately?

Piper Foster:

It was a later point in life I had after the time at Rocky Mountain Institute, worked for a family foundation, the Sopris Foundation, John McBride, and he was a big enthusiast about what Europeans were doing in terms of sustainability, whether it be transportation, energy, infrastructure, and had sent me to Europe several times, looking for best practices. We hosted large conferences for municipal leaders across the west, talking about what these innovative ideas might look like if translated to an American west landscape. And along that path ended up hearing about the Alexander von Humboldt Foundation, which for many Americans is not really on the radar, but they’re the largest grant maker for PhD research in the world. And in certain circles, of course, would be well known.

Jon Powers:

What was Alexander von Humboldt by the way?

Piper Foster:

Yep. If fact, if anybody’s curious, Alexander von Humboldt, there’s a phenomenal biography about him. But he was really one of the first naturalists in the late 1700s based in Germany, but explored all around the world, was just a tremendous explorer had categorized it was a botanist. I think there were more places in plants named for Humboldt than any other explorer in the area.

Jon Powers:

Wow.

Piper Foster:

So, it’s a wonderful foundation based in Germany, they have a leadership fellowship that I hardly recommend to anyone listening that is the German Chancellor Award, and that’s what I had. I ended up then spending two years in Berlin with a cohort of 10 Russians and 10 Chinese and 10 other Americans. And they’ve since expanded the fellowship to include, I believe Brazil and India, but we each were studying what we wanted to and funded to do so. And my work was in German land use codes to accommodate large scale renewable infrastructure.

Jon Powers:

And what was the time? The window?

Piper Foster:

Oh, it was 2009 to 2011.

Jon Powers:

Oh, interesting. And a lot of the ramping up is happening in the German space to begin with?

Piper Foster:

Exactly. Yep.

Jon Powers:

Oh, interesting. Any major lessons you have sort of watching that market, sort of expand the way it has and even faced some challenges just because it sort of grew so fast?

Piper Foster:

Well, I think about just a visceral moment when I first had arrived to begin the line of study, it was right during Intersolar, which is one of the largest conferences in the world for our sector. And it was just beginning and I’ll never forget stepping in Munich, this massive conference hall and just the scale and professionalism of all of the companies and vendors there, was epiphany to me to see two floor display booths with women that were branded to match the brands they were representing. And the scale had just blown out of the water, anything I’ve attended before or after. And so I think that was recognizing the potency of the German feed-in tariff and what it was doing as a market maker and then all the corresponding corporate success that came as a result of that. So it was very exciting to be part of and I loved my time working at, my desk was at Ecologic Institute, which is a well respected think tank there.

Jon Powers:

And did you go from Germany back to Aspen?

Piper Foster:

Returned to Aspen, worked for a department of energy, funded initiative for energy efficiency and then quickly moved on to a startup company there called Amatis Controls, which is an Internet of Things manufacturer. And we helped develop the first cost effective heat meter, which is relevant for the solar thermal sector. So I opened the European market for Amatis for this heat meter, was employee number two. Helped developed everything from our logo and business cards right on down to product specification market discovery, and I loved it. It was, I think that was my first taste of being really part of a startup and it’s so intoxicating.

Jon Powers:

Yeah. It sounds like you’ve sort of rode the train before, right? So you know where some of the challenges are. What then triggered the move to Alaska?

Piper Foster:

Well, love.

Jon Powers:

Yeah.

Piper Foster:

For better or worse. So I had, Aspen is spectacular and I was sure that would be the rest of my life. But when I met my husband, Nathaniel, he’s a commercial and editorial photographer, had grown up in Alaska, was based there. And I was quite, this is a trend, me being quite sure of things that ultimately end up being wrong. I was quite sure that Nathaniel would live with me happily ever after in Aspen, but within three months we were in a rented huge white van with all of my belongings driving north. It was a good moment in life for me to transition. Anyone who’s been part of a startup company knows that can be very fulfilling, but also exhausting work. So I was ready to take a step back. And had found a wonderful job with a non-profit in Anchorage, the Renewable Energy Alaska Project.

Piper Foster:

And upon arriving here that was September of 2015, was invigorated to work with Chris Rose, the director and really discover the energy landscape in a place that though is part of the US, anyone who’s been here spent a lot of time knows it’s just a little left of the US, a little right of the US. The same way when we go to Canada, you start noticing a lot of differences that are subtle. And that was very stimulating right off the bat, frustrating at times too, in Alaska. But I recognized all kinds of opportunity that I wanted to get involved in.

Jon Powers:

Yeah. One of the things we talked about offline, I want to sort of bring back in you. I was reading a recent interview with you and I want to flash back to an earlier episode of Experts Only, I was interviewing Ethan Zindler from Bloomberg New Energy Finance. And he talked about the clean energy market, the renewable market here in the US. as it began to mature, you literally went from conferences of folks in denim with men, with ponytails to business suits, right. It began to sort reflect the maturing of the industry. And you were talking about in Anchorage, how, here, the Lower 48, that maturations happened, right. But the renewable space up there is still really sort of really fighting its way into maturity. Is that some of the best way to put it?

Piper Foster:

I would agree, even though there’s some fantastic flagship projects that have been enormously successful that are backed by incredible investors, they’re really, I would say the beards and Birkenstock’s iteration of that is I think still the cloak that renewables wear in Alaska. And that’s in large part because the fossil industry is so dominant, is so persuasive in terms of an economic driver in the state that there just hasn’t been a lot of room for renewables. That said, the state has phenomenal metrics on investment in renewable energy. People may know that Alaska inaugurated the renewable energy fund in 2008, which is entirely composed of state appropriations. I think between 2008, 2015, they had allocated $260 million for investment in renewable energy, which is the greatest sum per capita in the country.

Jon Powers:

Really?

Piper Foster:

That fund… Yeah. It’s exciting, it’s incarnated as 68 different investments in renewable infrastructure, largely hydropower, a lot of wind, 90 million in wind, whopping 500,000 in solar. So the solar has just been excluded and really off the map, which we can talk more about. But the dominant investment really has been in village scale wind, and some rail built as it’s known the population centers, hydropower that has served those communities.

Jon Powers:

Well. So I think, you know my background and you know I used to work within the Pentagon and we always looked at these military bases a lot as sort of as communities where, you literally had a gated community that we had the opportunity to really run with some interesting, innovative things with ideas around microgrids and energy management and storage and renewables and electric vehicles all sort of in a contained environment. But the reality is that contained environments still rolled off into a massive utility that was part of the village or city that the base is next to. In Alaska, you’re in a place where many of these rural communities are those same locked in forward operating base, we call them in the military. What sort of caught your interest in the need for microgrids there and what are you seeing sort of on the ground.? And then with that, I want to talk a little bit about the development of sort of 60Hertz through that experience.

Piper Foster:

So Alaska has had the longest experience operating microgrids in the world. And I think a lot of people don’t realize that the state, because it’s two and a half times the size of Texas, that there are only 16,000 miles of roads in this massive area. And only 30% of those are paved. The state is largely undiscovered. So we have 200 villages scattered across the state. These are largely Alaska native communities and they have had good old diesel powerhouses for decades. And that’s what we have now all come to excitingly, sexily, call a microgrid. So I’d say the state has been sort of well positioned, but not intentional about having this microgrid operating experience. But nonetheless, the black eyes, the hard lessons, the failure stories are a rich laboratory for anyone who cares about the emergence of this sector. And so from my desk at the Renewable Energy Alaska Project, hearing stories about communities that were paying on average 62 cents, a kilowatt hour for electricity, $10 per gallon for heating oil, I really began asking, why and how is the renewable energy fund ultimately improving the situation?

Piper Foster:

And what about these failure stories? There are epic stories of the state flying in with a Black Hawk helicopter in the middle of the night of backup generator for a team of 50, 80 people, maybe a 100 people because no maintenance had taken place on that diesel generator. And so why was that happening? Why was I hearing stories about this and how could that situation be remedied? So as I began learning more like what the state’s emergency response budget for power failure would be, how they were backstopping these communities, the general organization of these independent villages. I think some facts are helpful here. So the state spends just under half a million dollars a year, backstopping being sort of the utility of last resort. This is through the Alaska Energy Authority, helping communities that again are going to be far less than a megawatt of demand, probably closer to even 150 kilowatts serving-

Jon Powers:

For the whole community?

Piper Foster:

For the whole community.

Jon Powers:

That’s incredible.

Piper Foster:

So you’ll see a population of, between the smallest, probably 15, 16, 25 people up to hub villages of which there are five that have about 5,000 people. But really these are sparsely populated areas, totally disconnected from roads, disconnected from certainly a natural gas line. Fuel is barged in once a year. That shipment is very brittle-

Jon Powers:

Almost a year.

Piper Foster:

Yeah. So like, don’t run out because you will not have power. There are 10 communities that we fly fuel into. So that’s, where you’re really getting into the closer a dollar kilowatt hour range. And so what that looks like for the state to be maintaining these sites and therefore for a local person to be responsible for keeping the lights on. People would be shocked to discover this is the United States.

Jon Powers:

Yeah, absolutely. And you talk about sort of the opportunity around microgrids to be sort of over marketplace of over 30 billion, right. And you guys are just looking at some of the information you guys provided regarding you got in Alaska alone, you’ve got 200 native villages. There’s 14, was it 1,400 indigenous villages across the Arctic and obviously very remote challenges. So what sort of in that challenge sort of got you excited about creating sort of 60Hertz and then what is 60Hertz like? How is the company sort of developed?

Piper Foster:

Yeah. Well, so I’ll tell you the Genesis story. I began wondering how renewable energy could better be funded, in addition to the state grant. I’m curious that all of the investment tax credit that these projects were spinning off were being forgotten and left untouched because they were largely funded by grants. So I wondered if I could start a company that would be the bridge, kind of a boutique broker between off grid, renewable energy boutique scale, small, there’s less than $2 million CapEx and investors that had an interest. And could we efficiently aggregate those sites and serve as the broker? Well, very quickly discovered that investors were squeamish about that proposition, knowing about the operations and maintenance failures. So could we develop a platform or a software? Was there something available on the market that would help better optimize microgrid maintenance and ensure that investors assets were protected?

Piper Foster:

And I was asking a question that I now know a lot of people all over the world have been asking, but hadn’t really been solved. So we surveyed the market they’re in this breed of software, which is called Computerized Maintenance Management Software. There are of course, big players like IBM’s Maximo and the way we use digital technology to maintain things, that’s a solved problem. What wasn’t solved, what wasn’t addressed was how you would deploy a software platform for a village skill user with low bandwidth to no bandwidth in terms of cellular connectivity, where the boss was distributed. Wasn’t sitting on site with that individual and where you had huge issues of operator turnover, job retention. English may not be the first language, even glasses, haven’t seen an optometrist in a while. So could they even see the font on a digital interface.

Jon Powers:

Right.

Piper Foster:

So we decided we needed to develop our own. And company started officially, we were staffed up by July of 2017 and ran these two lines of business, exploring the software development as well as project finance. In the time, since, I’ve recognized that the growth trajectories in business form of these lines of business are different enough that we’ve split off the project finance activity into its own LLC, called Leica Energy. And 60Hertz is the Computerized Maintenance Management Solution, a software solution for microgrid maintenance. What we’ve discovered is that in Alaska, the lessons learned the black eyes on microgrid maintenance actually apply to urban resiliency grids to of course, islanded grids all over the world on true islands. So village scale lessons and village scale solutions actually work quite well for a much broader swath of microgrids, of course, including mines, military in all of the more conventional, urban microgrids, that’s how our solution started.

Jon Powers:

Fascinating. And so, well, first of all, talk about splitting off the financing piece and what sort of drove that and how is that sort of managed and paralleled to the software side?

Piper Foster:

Yeah. So we had hosted a contest in August of 2017 to test the market and see if there was actually interest in a power purchase agreement, or if communities, remote sites would prefer to wait for grant funding or take out a loan. And in 30 days, received over 30 applications. So that was the great proof of concept and okay, there is demand for assistance and financing, structured finance. I then vetted those sites. We have a proprietary purchase agreement, calculating model, and started coming up with value propositions, also determining which of the sites would be a good investment risk or not. And so that pipeline is standing by the rate of deal flow. Of course, in a remote place, business development is expensive and we have this opportunity.

Piper Foster:

I stood up in September of last year because the growth pattern and investor interest, really was favoring a more scalable venture backable business, which is what software is. The development fees that we can earn off of each project for Leica Energy, what a colleague calls, pleasantly boring revenue and worth, that’s fine. So Leica is stood up and we have two projects in the hopper for 2019. I sure hope that those accelerate and we get more, but essentially that is its own separate entity so that my team and I can focus on 60Hertz growth.

Jon Powers:

Interesting. And so let’s go back to 60Hertz growth and you guys are part of a program called Launch Alaska. Could you talk a little bit about Launch Alaska and then also, what I found really interesting is you also work closely with sort of the Village Electric Cooperative. Matter of fact, I think they’re actually an investor right in-

Piper Foster:

That’s right.

Jon Powers:

… The company. So how is that partnership working and are they helping on things like pilots and trying to really proof of concept on the technology?

Piper Foster:

Yeah, Jon, that’s right. So Launch Alaska is a relatively new business accelerator. It’s part of the GAN, the Global Accelerator Network and they’re in their fourth cohort. We were happy to be part of the second. Launch Alaska is discovering fascinating companies working in unconventional spaces. I think for investors looking for the next new deal, and there’s certainly an appetite for looking outside of Silicon Valley, the problems that Alaskans face are unique, are often overlooked and are replicable in a much larger, scalable market. I always say that Alaska is a proxy for the developing world. So solutions that we pioneer here without currency risk, where it’s a lot cheaper to travel, really play well and apply to a larger global context. So for 60Hertz, it’s been a perfect place for us to be pioneering our solution, testing our solution.

Piper Foster:

I would just put in a plug for Launch Alaska, that even though they are a new startup program, they’re really meeting or even exceeding a lot of the averages for a business accelerator. 55% of their companies are earning revenue now, which is equal to the average GAN startup. And 55% of the portfolio companies have a female CEO like me. And that’s a really awesome factor about Alaska. You have a ton of women in leadership positions such that it’s not even, I think newsworthy here though, we’re being asked and getting coverage nationwide about that. So during our time at launch Alaska, of course, an accelerator helps you discover your market, helps you refine your value proposition and helps with that proof of concept and invaluable learning for us. And I’ll say for me personally, is that many startups fail because the market appetite that the entrepreneur is so positive, exists is often not there.

Jon Powers:

Right.

Piper Foster:

So we did a lot of testing and small scale proofs. What that looked like was job shadowing, to conducting expert interviews, doing paper prototyping of our software. We interviewed and worked with 50 individuals in 2017 and across the US and Canada, to really refine and get a sense of what that minimum viable product of our software should look like and do. That was developed between December and January of 20 17, 2018. And then we launched to 14 communities, a free pilot with 30 operators, and ran that pilot from February to May of last year, Alaska Village Electric Cooperative, which is by land mass, the largest utility in the country. It’s a rural co-op, was one of our major partners during that pilot, as well as a native serving non-profit called Tanana Chiefs Conference. And so the feedback we got from that initial circle of operators, what things didn’t work, what things they liked, what things needed a lot of prodding, some of the success stories.

Piper Foster:

We have a feature called Operator Forum, which is like Facebook for the operators. And on it, one of our operators, right within the first 10 days of the pilot said, “Hey, I need some help re-ordering glyco for this diesel generator. And I don’t know what to do about this and how about some O-rings?” And quickly others were able to chime in on the platform and help him. And that was a major victory for us because it’s validating a thesis that you have actually very responsible diligent operators, which was contrary to prevailing belief. You have responsible diligent operators who don’t know they’re important, and don’t have a network and don’t have any professional support. They are out by themselves. And so this is a beautiful way that technology can bring that solution to people that are otherwise not at all served by technology.

Jon Powers:

So taking that pilot concept, what do you sort of see is next steps for 60Hertz? And then, I want to talk for at the end sort of, for a second, about just the future of the microgrid space in general.

Piper Foster:

So by the end of the pilot in June, asked each of our partners, “would you pay for this?” And they all said, “yes,” which was a huge victory. So at that point began raising the venture capital to grow, but needing to move forward in the process of the raise, I took out a 100,000 loan, which I’ve guaranteed myself to develop, now, this fuller version two of our software, which is rolling out this February. We conducted design process, really fabulous called human center design. Brought an anthropologist, did in-depth interviews with numerous users to refine our feature set and settled on eight features that are now incarnated in the platform. Our user interface is therefore living up to our value prop of working for low literacy, low training, providing on demand, on the job training. And we’re just really enthusiastic about the feedback we’re getting from this early circle of users. And we are deploying to the first 25 communities on the Alaska Village Electric Cooperatives network. I wouldn’t say grid because these are not connected to places right in their network. And that’s taking place in February, March and April of this year.

Jon Powers:

Wow. I mean, it’s amazing to think about the utility as just a plethora of many utilities within it, right. That they’re trying to manage and here you guys are, think with a really interesting potential to expand and grow. And then how do we take the lessons you’re learning in Alaska? I love the way you sort of framed it. It’s a great learning place for the rest of the developing world with the developing world. But also, the developed all in communities, there’s so much potential to take these lessons and bring microgrids out to where it needs to be. Because I think for a long time, people have talked about it and you know, you’ve had concepts and you’ve got Apple building the new headquarters and you’ve got military bases, but the actual market’s just still nascent and growing. Like where do you sort of see it in five years?

Piper Foster:

Absolutely. Well, I think learning from PG&E’s disastrous experience, unfortunately, my prediction is that we’ll see urban community scale microgrids popping up. Jigar Shah referenced microgrids recently as an extreme solution or solution of last resort. And I don’t know that it’s quite that dramatic. I would also note that the Alaskan experience has shown that integrating renewables into microgrids is not as easy as it sounds.

Jon Powers:

Right.

Piper Foster:

So exporting the knowledge base that we have here, I would really encourage microgrid developers to look at what’s happening in Alaska and what lessons we’ve learned. And for 60Hertz growth prospects, we certainly see urban resiliency grids, critical infrastructure. Let alone villages globally, let alone island states that are anticipating development in terms of microgrids. I think that’s really a huge growth sector for us. And I’ll also add that microgrids are in more places that people may recognize, are what we call non-traditional microgrids, being an ocean going vessel, railroad, an airplane. These are all microgrids too, where we see our solution having a footing.

Jon Powers:

Interesting. So, well, first of all, exciting stuff you’ve got going on and obviously game changing and hopefully we can find a way to sort of see scale up here in the coming years. Because we need it both to address the energy security needs of folks in these communities, but also to address climate changes. It’s continuing to rear its ugly head and it’s only going to be getting worse. But if you could, so step back to growing up in Colorado for a second and you know, you’re graduating from high school or graduated from college and if you sat down for yourself and had a cup of coffee. What piece of advice would you give to young Piper?

Piper Foster:

Gosh, I really appreciate that question, Jon, I’ve never thought about that. I think what my last years have been showing me is just how important it is to do all we can to cultivate a broad base of skills early. What I would say right now, is the endeavor to launch a startup demands that the founder be a renaissance person, which is of course an impossible standard. We can’t all be excellent at building relationships and coding software and running your finances and keeping track of piddly admin. But just the range of things you need to be excellent at to be successful if, this is the category that someone wants to pursue may be impossible. And I think that’s why the startup failure rate is so high. But nonetheless, the endeavor, as I said to you, right at the beginning, the endeavor of trying is so exciting and so energizing.

Piper Foster:

And I would wish this on anyone that they have the opportunity to build something and to start something, whether it’s a granola company or solving energy problems. This really, I am very bullish on social change through startups and at the risk of offending people that I love, I would even say social change may be better achieved through some startups than non-profits. Because the market pressure to achieve revenue and ensure that your solution is actually a fit for the market, compels an activism and energy that I would say few other stations in life demand.

Jon Powers:

And yeah, I feel like first of all, I really appreciate the comment. I feel like that you’re exactly right. And I feel like there’s capital so much more capital needs to move outside of the coasts, into places like Alaska and Buffalo and in Nashville and places that aren’t Silicon Valley. Because we’re going to be able to empower more and more entrepreneurs to do more. Good friend of mine, who’s also, kind of I grew up with also running a startup, told me recently said, “he feels like every day he wakes up and his roommate in college is telling him he’s got an exam and he didn’t study for it”. A new thing to learn every day, whether it be HR or doing the financials versus just the vision of the company, so.

Piper Foster:

I couldn’t agree with that more. In fact, I had said to somebody recently, “I think 60Hertz for me is like falling in love and finals week.”

Jon Powers:

You’re right.

Piper Foster:

All at once.

Jon Powers:

That’s awesome. Well, Piper, thank you so much. I really appreciate the conversation.

Piper Foster:

Jon, it’s an honor to be with you. Thank you.

Jon Powers:

Thanks so much for joining us at Experts Only Podcast. As always, you can get more episodes@cleancapital.com. If you have any ideas for new interviews, please let me know. We’re always looking for interesting folks to talk to. I’d like to thank our producers, Emily Connor and Lauren Glickman, for your great work and as always look forward to continuing the conversation. Thank you.

Jon Powers:

Thanks for listening in today’s conversation. Find more episodes on cleancapital.com, iTunes or wherever you get your podcasts. If you’d like what you hear, be sure to subscribe and leave us a five star review. We look forward to continuing our conversation on energy, innovation and finance with you.