Interview: Balki Iyer, chief growth officer at Utopus Insights

What were you doing on Valentine’s Day in 2018? For Balki Iyer, co-founder and chief growth officer at New York-based digital firm Utopus Insights, the answer is being acquired by Vestas – and it was, he told us, a whirlwind romance.

Utopus Insights started life in IBM’s Smarter Energy Research Institute, where its focus was on developing software systems to improve the efficiency of renewable energy projects. It was there for 12 years before IBM spun it out into a standalone business on 1st March 2017, with backing from Vermont Electric Power Company and Boston Consulting Group. Utopus started talking to Vestas two months later.

“One thing led to another and, before we know it, we’ve been acquired. It happened in a six- to nine-month timeframe. The first contact we ever made was May 2017.”

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The acquisition by Vestas was not the largest corporate M&A deal in wind in 2018, but it was one of the most significant as it underlined the focus that major players in the sector are putting on digital. We met Iyer to discuss that investment and the role of data in helping companies in the wind sector to improve project returns.

He said that Utopus is a software company that has developed over 100 patents in the energy data space, with products focused on energy analytics, forecasting and predictive maintenance. It works with customers including developers and utilities to help them improve the performance of their portfolios, and not just Vestas turbines.

Iyer started his career at General Electric before becoming a renewables developer in India, where he eventually sold wind and solar platforms to Enel and Statkraft. He said the idea to focus on improving the performance of projects started here.

“I believe that the fusion between the physical and the digital world is where the action is for the next 5-10 years… It’s almost shameful that we leave so many electrons untapped,” he said, adding that the goal of the company was to help support the rollout of more wind and solar capacity on electricity grids globally.

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Iyer said he sees no shortage of enthusiasm from companies in the wind industry to embrace the use of data. The difficulty is getting them to understand exactly how it can benefit them, in terms of being able to give a predictable return on investment.
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“We see two challenges. One is that the tough thing about digital is the value story. It’s not because it’s not there, it’s because it has to be personalised, so how do we take these relevant case studies so people can personalise their own value stories,” he said. By this, he means it is difficult for one customer to extrapolate that they will find the same value from using Utopus software as another firm has, because no two portfolios can ever be the same, in terms of machines, geography, and so on.

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And the second challenge? “There is an abundance of players that are coming in, and different people do different things, so there could be some cacophony in the market that creates confusion about what we do,” said Iyer. He stressed that he saw Utopus as a software firm creating systems for others to use, not a service company.

However, ultimately, data can help to make the difference between a well-run or a badly-run project – with the implications that this has on profitability. With predictive analytics, for example, the chance to make projections about which parts of a turbine will fail and when, and the optimum time to repair them, can be invaluable.

He said that digitalisation will happen at pace in the renewable energy industry, and wind in particular, due to the complexity of making accurate forecasts about returns. These are affected by factors including project age, turbine models, wind speeds at the site, terrain, long-term climate changes and weather phenomena like El Nino.

And he added that the need for technology such as this was greatest in established markets such as Europe and the US, because of the age of some of the wind farms.

“For Utopus, because Europe is a mature market, that’s even more important for us, because these projects need more of a digital touch and digital transformation than someone who is building a brand new power plant.”

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While Utopus has its own plans, we still believe the influence of Vestas will be key. The Danish manufacturer had a 20% share of the global onshore turbines market in 2018. If it is going big on digitalisation, others in the market will have to do so too.