GreenBiz: Alaska's energy and arctic-tech startup scene is warming up for global challenges
By Isaac Vanderburg, Managing Director, Launch Alaska
This original ran in Greenbiz.
Alaska's unique take on innovation is driven by its vast geography and harsh climate. For a technology to be useful here, it must perform well in remote and harsh conditions, be easy to repair and solve a real problem. This unfussy approach to innovation is at the heart of the state's emerging entrepreneurial ecosystem, where entrepreneurs, researchers, policy wonks and technologists are tackling on some of the world’s most challenging problems in the energy sector.
With the highest cost of electricity and some of the highest per-capita energy consumption in the United States, Alaska is hungry for energy innovation because of the outsized impact that energy costs have on our residents' pocketbooks. This is particularly true in rural parts of the state.
And with 12 percent of the world’s islanded microgrids, the state offers a unique opportunity to deploy flexible energy solutions that can be adopted in remote regions globally. Think Puerto Rico and Samoa. Both are isolated from mainland electric grids, face high energy costs and are highly susceptible to disruptions in fuel supply chains based on extreme weather conditions.
However, while Puerto Rico relies heavily upon combustion-based energy sources such as diesel, Alaska has become a world leader in advanced microgrids powered by renewable energy. Alaskan entrepreneurs invent technologies that aim to decrease the cost of living in extreme cold, remote and harsh conditions. And many Alaskan utilities have established voluntary goals to reach upwards of 75 percent renewable energy penetration in the next five to seven years.
As Alaska's energy paradigm shifts toward renewable-energy-powered microgrids, the opportunity is ripe for visionary entrepreneurs to develop energy solutions that can facilitate deployment to the world’s remote communities. While microgrid solutions solve many problems facing remote communities, they come with their own various challenges ranging from financing and ownership to grid integration.
Addressing rural energy and microgrid challenges will be critical to meet global energy demand. Navigant Research predicts that 80 percent of the growth in the energy sector before 2035 will take place in the developing world; often in places where financing for large-scale infrastructure projects can be a challenge. In such settings, small microgrids with distributed generation of power (often times using solar or midsize wind turbines) make more economic sense as a path to rural electrification.
That’s where Launch Alaska comes in. Our non-profit accelerator brings together entrepreneurs, members of the military, utility operators, researchers and other thought leaders to work toward a shared vision of Alaska as a thriving innovation and entrepreneurial hub with a global impact. Launch Alaska aims to spur a new generation of Alaskan energy innovators who are hungry to take on some of the world’s most compelling energy issues, including those related to generation, transmission, storage and management. And Alaska’s high energy costs offer one key benefit to entrepreneurs with a disruptive idea — technologies that may not pencil out in lower-cost markets may pencil in for Alaska — making the state an attractive locale for early demonstration projects or first deployments.
One of our first cohort companies, 60Hertz, is solving the financial and technical challenges inhibiting wide-scale microgrid deployment. 60Hertz Microgrids believes that access to affordable, reliable and clean energy is not only a basic human right but is also essential to the heartbeat of rural economies and households, which is why the company coordinates microgrid financing and promotes local ownership through socially oriented investments in remote electricity infrastructure. It also offers turn-key microgrid operations and maintenance solutions for isolated sites so that rural villages, refugee camps and other remote sites can better manage their own microgrid.
This winter, 60Hertz will launch its operation and maintenance software in nine Alaska Native communities and one remote lodge through a partnership with local utilities, a private tour company and non-profit Tanana Chiefs Conference. 60Hertz software will assist these local entities in addressing operations and maintenance challenges within their local electricity infrastructure to minimize energy costs and maximize the useful life of their microgrids.
Over the next three years, Launch Alaska plans to fund at least 30 innovative energy companies that can leverage "arctic tech" to meet Alaska's local energy challenges, with an eye toward extending their impact to remote communities throughout the world. Based on our 2018 pool of applicants, we expect that at least half of these companies will focus on microgrid technologies, many of which have the potential to be adapted for similarly isolated communities with varied climates, like our friends in the Caribbean.
This year's applicants address things such as removing the revenue risk of distributed generation for utilities, monitoring the operational status of power lines on distribution grids and responding to disasters to prevent extended power outages.
Alaska’s energy startup community thinks local and is ready to act globally.