Spencer: Hello everyone and welcome to the latest edition of the Technology in Renewables podcast. My name is Spencer Borison and I’m an associate partner in the renewable energy practice here in the United States based outta New York City for Codibly. I’m joined today by our next great guest: Will Gathright. Will is the CIO of Fortress Power, based here in the United States.
I’ll let him introduce himself a little bit more deeply. He holds a Bachelor of Science from Northwestern, got his PhD at RPI in New York, and then also has been in the industry for over 10 years, including several years now as the CIO of Fortress Power. Will, welcome to the podcast.
Will: Absolutely. Thanks for having me, Spencer. I appreciate it.
Spencer: And anything on your background that you think I’ve missed that is relevant for folks to know about you and your expertise here in the space?
Will: Yeah, I think you covered it. Been sort of bumping around the battery storage program and batteries for a long time now. I think that one kind of cool experience I got to have was for a while I represented the people in the state of Virginia on the Virginia Solar and Storage Development Authority. So I got to get a little bit of insight on the policy side as well.
Spencer: Nice. Very nice. And for those listeners who don’t know, Will and I met back last year in 2020 in Long Beach, California at the RE+ Conference, one of the largest renewable energy industry conferences in the world. I was joined by our CEO Bart, and I think the existing relationship with Codibly and Fortress stretches back a few years now and continues until today. So, thanks for being with us. And why don’t I dive into a first question, which is just sort of like a high-level overview? Will, when you’re looking at this industry, at the renewable energy industry, are there any trends that you think are especially interesting to keep an eye on as we go forward here in the next few years?
Will: Yeah, there is. So, I mean, everything that maybe you hear coming from me is gonna be colored from my position in the industry. So I work for Fortress Power. Fortress Power is really a battery storage integrator and an OEM, right? So this is a company that really became successful selling 48-volt residential batteries, so the very successful sort of EVolt and eFlex product lines. And we’ve expanded our product offering recently to include much more software to include inverters and also to include products for those commercial, industrial, or like the CNI space. But that’s the lens that I’m looking at all this through. So if you’re somebody in my position, you get really excited by stuff that lets you sell more batteries. And the way that you wanna sell more batteries is to unlock a lot of the value in batteries, right? So even for the last decade, it’s been clear that battery storage is a very versatile and very useful tool for providing, let’s call it energy services, right? It goes far beyond just dumping like a bunch of bulk power onto the wires, right? So two of the trends that I really see as being kind of the most exciting part of this industry right now, kind of the most up-and-coming, are these notions of virtual power plants. So we’ll call VPP and very similarly related to this you’ll call non-wires alternatives, right? So these are the things that we can do to keep the grid stable, resilient, that isn’t just laying a bunch of cop. And this might sound funny. I mean, I’m a software guy, I’m a tech guy, right? And I can tell you that this goes really sort of far beyond just the technology of it. The technology has been there for a long time. As you said, I’ve been working in this space for a long time, since, you know, before virtual power plant or VPP was like a common word that you could just use at a trade show. You had to spend five minutes explaining the thing. I did this demo project with a battery that was sort of interacting with the grid in some meaningful way. If the grid needed help, the battery would discharge or charge intelligently. This was almost 10 years ago now. Great project, a really cool project, really fun. At the end of it, everybody high-fived each other and we got paid exactly $0 for this project. Right? And the reason we got paid nothing was that there was no framework, there was no regulatory framework for us to capture that value. The utility company wasn’t quite sure what to do with it. They didn’t really want it. They didn’t really ask for our opinion, to be quite honest with you. So even if we could show that we were providing some value, there was no way to get paid for that value. So at the end of that, what did we do? A bunch of people worked long hours, we exercised the battery quite a bit and didn’t come up with any money. So of course, the next day, once the project was over, we stopped doing it. And it’s this kind of realization that I think that the industry as a whole is kind of finally coming to. That we should be able to get paid, that we should put the stuff in place to get paid to do this on a coordinated basis for whatever stakeholder that is. Whether that stakeholder is the utility or the grid operator or some third party, some stakeholder is benefiting from this, they should get to say what that alternative is, and then they should give some money to the storage owners.
Spencer: Yeah. No, I think it’s all really interesting and plays to a lot of what Codibly is seeing as well. And, I guess, you know, I wanted to shift in terms of the technology and the software space, which you started to touch on. And I know virtual power plants is a great example of something that’s enabled, through software and through being able to connect a lot of disparate sources of power, to create something that you can fit into the grid. I’m curious to know, outside of that, if you see any other really interesting emerging trends really focused on this data and technology piece. I was thinking a little bit about some of these communication protocols we’re starting to see for part of the broader distributed energy resource management systems. And if I dare even say generative AI and how that may shape the space going forward. Sort of curious from a more CIO hat perspective, what are you thinking about that and the different opportunities that Fortress is looking for on the technology side?
Will: Yeah, so it’s funny that you bring up the AI thing. This wouldn’t be a technology podcast if we didn’t talk about AI, right? So, I think the communication protocol discussion is a good one. We’ll have it in a moment, but we’ll touch on the AI things. That’s what’s on the tip of everyone’s tongue, right?
The way that AI and sort of energy tech writ large interact is really sort of this like fascinating dance right now. It’s kind of cool to see it: the biggest impact of AI, particularly of these like generative AI models, your Chat GPTs and your Dollys and your mid journeys. As of right now, the end of May, 2023 has really been on the back office, right? If you look around, I challenge you to do this yourself. Look around your office. The professionals that have embraced these technologies are probably the ones that are getting the most productivity gains, right? So if you see stuff like that, it’s important to kind of look past some of the hype cycle and maybe even some of the doom saying, right? Like, as we are sitting right now, these are great tools. We should treat them as great tools. So like any other technology tools that are gonna open up these solutions to problems that might seem kind of wild or unreachable today.
Maybe as a quick aside. There’s this famous story. It might even be apocryphal. I don’t know, but it’s a cool story, so I’ll tell it anyway about city planning in New York City. So it’s two years before the Model T is gonna be introduced. The main mode of transportation is people walking around, buying horses, or people riding horses around the city and the population of New York City is growing so much. They’re just being inundated by the manure and there’s so much horse manure that the city planners are all getting together and they are coming up with these really kind of wild, creative solutions for it. But they can’t imagine a solution that doesn’t involve essentially moving a lot of people in horses out of New York City. Cause they are smart people. They can do the Math, they see the growth rates, they see all this stuff. They know that they’re gonna get just buried in manure. And then two years later, the Model T comes along. And lo and behold, there are fewer horses. But the city planners didn’t invent the Model T. Henry Ford did. So I think we’re gonna see a similar sort of fundamental mind shift, right? If you can wrap your head around some of these tools. But, of course, there are a lot of challenges to overcome.
If you want to go past the back office, if you wanna put these sorts of AI tools into production, right? It’s become almost like a truism in the industry that you shouldn’t think about the AI-ness of the tool, right? Don’t say: “Oh, I’m using AI to solve X problem”. What you should say is: “I’m solving X problem. I have a great solution. I might just so happen to use AI for this part of it”. This is a really common thing to say and it’s true. That’s the right way to think about it from a business sense. But then there’s a disconnect that happens. And the disconnect is that once you start to put the technology into practice, once you start to operationalize these things, there’s a whole growing field.
You know, amongst like site reliability engineers or so-called DevOps people, even though that word isn’t that great, but there’s MLOps, right? There’s like Machine Learning Ops. It’s a fundamentally different skill. So yes, you have the business people walking in this direction saying “Don’t think about AI, think about the problem, and then use AI to solve the problem”. And then you have the engineer saying “Wait, wait, hold on. This is actually a fundamentally different problem”. Right? And this is a hard gulf to kind of bridge. So we’ll see. It will be interesting to see how that gets resolved kind of going forward.
Spencer: Yeah. No, super interesting. And I think I want to dive into two different parts that you alluded to throughout that response. One, which I’ll save for the second part is this communication protocols, the IEEE standards, that I think a lot of people are starting to look into and think about for their own businesses. I’ll pause that for now. But you also mentioned some of these challenges and headwinds in the industry. And I was thinking about this a little bit more broadly, since I think the renewable energy industry, in the public view, is getting a lot of positive tailwinds right now with a lot of big investments from the federal government through the IRA and the bipartisan infrastructure bill. And so I was thinking in terms of the challenges and headwinds, that people may not appreciate as much, given all the positive publicity in the news, what are some of the things that you’re thinking about? From the perspective of a challenge, it could be technology, may also be different ways of policy, regulatory challenges, or things that Fortress is thinking about that may unlock additional opportunities if they’re solved.
Will: Yeah, I think the policy framework is always the thing that sets the rules of the game, right? And we’re seeing this play out in real-time in California. They recently moved to what they call NEM-3, right? Net Energy Metering. They’ve changed the rules for how solar is net energy metered. I don’t have to have an opinion on whether or not that’s good or bad. To me, that sets the rules of the game. I’m gonna play the game as it’s given, right? But it does create a shift. It creates an upheaval, and people respond to incentives. It creates a new set of incentives, right? Whereas before you could sit down under NEM-2, you could do the Math, you could crunch it out and yeah, it’s great. Just slam a bunch of solar panels, and feed a bunch of power to the grid. Maybe that became the optimal solution and now less so. And anytime there’s this change in the incentives, there’s gonna be real pain there, right? We can’t discount that. People have put real dollars and really put their livelihood on the line to interact with this industry under a certain set of rules, and we’re changing that out from under people. So maybe very broadly the answer to your question is, you know, how can we get everybody in the industry to kind of flourish together and bring everybody along right there? Like, to the extent that we cannot leave people behind and just be like “Oh, too bad. There are winners and losers. Guess you were a loser. That’s too bad for you”. That’s not a good solution, right? That’s not the winning play. So I think, maybe this brings us to our other topic, which is how do we stop that? Well, if we can get the old stuff in the field, the old inverters, the old batteries, the old whatever, things maybe even that were put in under old rules, and get them to all play along together. Perhaps that’s one kind of pathway to victory there.
Spencer: Yeah. That steps perfectly into the discussion. I think we’ve been toying with having here for the last 15 minutes which is around, how do we make the grid communication and all the different components within that grid, speak to one another more effectively and be able to adapt to changing circumstances, peak demand surges, need to shut off because of different reasons. How do we make that all work? And, one of the big ways that we’re seeing this happen right now is through these IEEE 2030.5 standards. most notably I think California Rule 21 is one of the major pieces that people are looking at in one of the largest markets.
And I guess I’m thinking from Fortress Power’s perspective, how you guys are thinking about all that and how that plays into your strategy and how you’re looking at the market in the future of the market. And also what are some of the main reasons that other companies or other players in the space are maybe thinking about this type of play as a solution and any challenges that they may expect as well in doing so?
Will: Yeah, it’s a great question. So maybe I’ll paint the picture a little bit just in case there are people out there that aren’t as big of a nerd into this stuff as I am. So engineers have this really stupid joke where they’ll say something like “The great thing about standards is that there are so many of them”, right?
And we’re really starting to see that. I mean, you know, this joke is stuck around for generations because it seems to be true every single time. We’re at a Betamax and Blue and, you know, VHS moment, right? There was a problem. Everybody saw the problem. The problem was we had a bunch of power electronics out there on the grid, and they were all kind of doing whatever they felt like, and it was going to be a problem. And often into the future once the penetration rates got to a certain level, we started to move that way.
One of the things that was identified was that we have to be able to talk to them. We have to be able to send some commands. You know, smart people can and did disagree on how this IEEE 2030.5 describes a communication protocol. So we’ll just call it 2030 for this discussion. Cause that’s quite a mouthful, right? 2030 describes this protocol. Where, you know, some computer system out there on the internet can send commands to, let’s just say an inverter for now, right, and get some data. Fundamentally, this is the problem that they’re all solving. You need to do two things if I’m being very reductionist about it.
You need to get telemetry data and you need to send commands. So that’s gonna sound deceptively simple, right? But that’s the whole game. So 2030 sets all this, you know, computational machinery around getting telemetry and sending commands, and you can do it and it works great. And then there’s some set of use cases where it’s a really good fit. Some cases may be where it’s not and people have shoehorned it in. That’s engineering. That’s all about trade-offs. There is a different standard called OpenADR. OpenADR here is an automatic demand response, right? That was, again, started for a different reason, as the name implies. Started specifically for demand response programs. At the end of the day, it does two things. It gets telemetry and it sends commands. And you can see it’s sort of grown over time because, you know, back in the bad old days, a demand response program was literally like, call somebody on the phone and say “Hey, walk around your building and turn stuff off. Pretty, pretty please. The grid really needs your help”. That’s like a manual demand response. We’ve come a long way. Now it’s automated demand response, but because they’re sort of two views on this same problem of telemetry and commands, they’ve sort of converged on a similar solution, even if the protocols look very different.
So, your question was how is Fortress, as a manufacturer, looking at this space, right? These are just things I have to be able to support. If I have a battery system and I want to give the most value to my storage owners, and I want to give the best possible user experience wherever this thing goes in, I have to be prepared to support whatever the protocol is that the utility or the authority having jurisdiction or whoever it is, demands. Whether that’s 2030, whether that’s OpenADR or some variant of OpenADR in different parts of the US, whether that’s even some like third-party integration, some like more proprietary API. At the end of the day, they’re doing these two things. Everybody is gonna need telemetry and commands. So my stance on it is, you know, let’s give it to them.
Spencer: Yeah. Super interesting. And for those listening, I think it’s a quickly evolving space and more and more states are starting to have state-level protocols in place. California Rule 21 is just one major example, but there are also a lot of other states that are starting to look into this and putting some standards in place on a state-level perspective as well. So, definitely interesting to hear your perspective. And Will, I know that we’re coming here close to time, so sort of wanted to wrap up in the last few minutes here with just asking you: when you’re looking in the future, and maybe this is for any residential consumers that are listening to this podcast who may be thinking about, whether they can better manage their own energy usage, and given you’re a player in the battery space, would you have any advice for them on general tips or how to better use batteries in that overall play?
Will: Yeah, sure. So this is the when-your-grandmother-learns-that-you-work-on-computers kind of moment, right? You’re always doing tech support. So my friends will often come to me: “Hey, I wanna go solar. What should I do?” So first, of course, make sure that whatever dealer you’re dealing with puts in Fortress batteries. Beyond that demand metrics, right? There are a lot of solar installers out there and that’s great, right? That’s how an industry grows. You can tell when an industry is really growing and thriving cause there are a lot of even two-people-in-a-truck-style businesses. Cause they want to get into that space. They can see the promise. But that means that there’s a wide variety of people with different skills, different standards of quality, different whatever. You have to do your homework. And if you are a homeowner kind of coming at this, you might not actually understand what is possible, right? So I can tell you that the analytics and the ability to predict some of the financial returns for your system have come a very long way in this space. We’re very sophisticated about this stuff. There are good commercial off-the-shelf tools that will predict your cash flows on out for 20 years and the best installers. We’ll be able to give you those reports so that you can see in black and white whether it is a good investment. What your goal is for your solar system, that’s your business. You may or may not personally care that it will not pay back for 7, 10, 15 years, or ever. There are lots of good reasons to go solar. Only one of them is financial, but you should at least know that that information is available. And if that’s important to you, use that to inform your decision because I think it speaks to the quality and level of sophistication of the installer if they have high-quality tools like that. On pre-sales. I get a sort of warmer fuzzier feeling about it that they will be using sort of best-in-breed tools throughout their operation.
Spencer: Yeah. Very helpful and definitely agree. And, not surprised to hear a CIO talking about data and metrics.
Will: Of course! Ask the computer nerd if you need more computers, no problem.
Spencer: Well, Will, thank you so much for taking the time here. I guess my last closing thought would be: any final closing thought that you have, or any conferences people should try to find you or the Fortress Power Team at in the upcoming months? Or any closing thoughts for listeners?
Will: Yeah, absolutely. So, you know, Fortress Power has a pretty big presence at most of the major renewable energy conferences. We’ll usually have a pretty nice booth, come say hi. I’ll be at some of them, but the people on my team are very knowledgeable and pleasant folks. So even if you just wanna swing by and talk about energy stuff, that’s a great place to do it.
In terms of closing thoughts, maybe just a quick thing about why I got into this industry and why it’s so meaningful to me. Like to me, the grid is this really cool, just like a marvelous machine, if you think about it. It’s millions and millions of miles of copper touching copper and it’s all kind of working with the same heartbeat. That’s amazing. And it’s incredibly sophisticated. And if it breaks or it’s having a hard time, like at the risk of sounding melodramatic, all of the civilization goes downhill really, really fast. So it’s an amazing machine. We all depend on it. So, you know, we really should all kind of kick in to make sure it’s healthy.
Spencer: Awesome. Well, great, great closing thought. I appreciate your time here and we will wrap up this episode of Technology in Renewables. And I wanna thank again our guest Will Gathright, CIO at Fortress Power. I’m Spencer Borison, signing off and see you guys next time. Bye.