A growing legion of towering wind turbines dotting various landscapes across the U.S. seems like a positive sign for the future of renewable energy. But current wind turbine technology is limited by a surprising obstacle: fast wind. Incumbent wind generators are designed to intentionally waste fast, harvestable wind because it can damage turbine generators and blades. 

NextPower360 has designed a generator that captures this otherwise wasted wind energy. We sat down with founder Michael Shore to learn how NextPower360 is both maximizing wind energy and lowering generator manufacturing costs. 

Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length.

Funding Round Details

NextPower360 logo
Company: NextPower360
Security Type: Equity - Common
Valuation: $6,005,760
Min Investment: $99
Platform: Netcapital
Deadline: Oct 20, 2023
View Deal

In your own words, how would you describe your company?

NextPower360 is helping the wind industry solve a billion-dollar problem by designing and commercializing a breakthrough generator that, unlike incumbent designs, can harvest energy from fast wind, increasing the output potential per wind turbine by more than 50% and reducing manufacturing costs.

What inspired you to take the leap and start this company with Dr. Tony Iacovelli?

The size of the market opportunity combined with the disruptive nature of our innovation inspired me to take the leap with Dr. Iacovelli. 

Every year, billions of dollars of harvestable wind energy that turns wind turbines is intentionally wasted by the generator to avoid damaging both the generator and the blades. Capturing this wind represents a tremendous global business opportunity and can displace up to a gigaton of carbon emissions annually.

Dr. Iacovelli’s innovation is brilliant. Our company’s design leverages the long-proven principles of Nikola Tesla’s breakthrough induction generator, but we changed the generator shape and rearranged the magnets to work at maximum efficiency across a far wider spectrum of variable input demands. 

It is not every day that one has the chance to be involved in commercializing a technology that can both shape an industry and help humanity rise to the challenge of climate change. Of all of the clean energy companies that I have been involved with, NextPower360 has the opportunity to create the biggest impact.

What is the biggest lesson that you learned during your previous entrepreneurial experiences?

NextPower360 is my fourth entrepreneurial company that has traction. I have also been involved with three companies, which we closed down quickly because of poor technology-market fit. Additionally, I have invested in about a dozen other entrepreneurial companies. This breadth of experience has given me the opportunity to learn many lessons, including how to lead a team, the importance of setting up procedures so the company can scale efficiently, the need for effective systems for managing cash flow, and the importance of company culture to enable a team to thrive through the inevitable ups and downs of growing a business.

If I had to choose my biggest lesson, however, I would say understanding our customers is paramount. I have seen companies with impressive technologies fail to gain traction because they were not solving a core problem of their customers, or they did not understand how their customers made decisions for adopting new technologies. At NextPower360, our customers include big wind turbine manufacturers such as Siemens and GE, and our communication with them is critical in planning our R&D and our go-to-market strategy. In fact, one of our key advisors, Dr. Madhav Manjrekar, was a former vice president of global research at Vestas (the world largest wind turbine maker), and his knowledge of the sector helps us to understand our customers and make key contacts in the wind industry.

What does the competitive landscape look like, and how do you differentiate?

Here is our differentiation: the current wind industry sees fast wind as a problem to be mitigated, while at NextPower360, we see fast wind as a resource. While conventional generators waste fast wind to keep them from over-spinning, our technology expands the range of wind speeds that can be efficiently harvested and converted into clean energy.

Although we might encounter direct competition from the component manufacturers, the most efficient route to market for our technology is to forge partnerships and license agreements with one or more of the dominant wind turbine manufacturers. GE, Siemens, and Vestas all manufacture the electric generators used in their wind turbines. All three providers have a history of acquiring generator manufacturers in order to gain competitive advantage. Their value proposition to their customers is the ability to provide efficient and turn-key wind power turbines at scale. The market has been under tremendous pressure to lower costs to outcompete fossil fuel-based energy sources. The ability of our technology to increase electricity output by 50% while lowering the manufacturing cost of a new generator should prove very attractive to our customers. 

What is your strategy to get wind turbine manufacturers to license your product?

Our strategy to license our technology to wind turbine manufacturers is made up of three main building blocks: (1) technology performance, (2) education, and (3) collaboration, each of which are described below.

Technology performance is the foundation on which the other building blocks sit. Our engineering and R&D work demonstrate that changing the generator topology and configuration of the magnets can tap into the huge reservoir of unharvested wind. This breakthrough in efficiency provides us a compelling story to engage wind turbine manufacturers. 

Our customers do not make decisions in a vacuum, and therefore education of the community of experts in wind generator technology is the second building block of our strategy. In other words, we are not just engaging our customers, but the broader community with whom they work, including experts at universities, national labs, and wind farm developers. Education of the expert community can provide validation and help create demand for more efficient wind generator technology.

The third building block is collaboration with our customers. We are not building a simple widget to sell the wind manufacturers. We are creating a long-term relationship that begins with the R&D process so our customers can help guide the design of our technology to help them solve their problem of missed wind by current generators. Collaboration over time can build into trusting relationships that will facilitate the milestone of a negotiated license agreement. 

What are the additional capital and operational costs of clients adopting your solution and what are the financial benefits?

Our clients will need to incur upfront capital tooling costs to manufacture the unique generator design that they will license from NextPower360. Our generators are comprised of the same materials as existing designs (copper, iron, electromagnets, etc.), so after initial tooling up, manufacturing processes will be similar to conventional generators, and there will likely be lower material costs because our design significantly reduces laminated steel — a major component by weight and expense of current generators. Operational costs are not expected to change significantly compared to incumbent generator technology.

Regarding the financial benefits, our customers are manufacturers of wind turbines and their suppliers. The increased efficiency of our generator technology provides two potential financial benefits to our customers: 

  • Increased market share. The buyers of wind turbines (utilities, wind developers, and distributed scale on-site users) benefit by maximizing a turbine’s electricity output. A wind turbine manufacturer that can boast increased efficiency over the competition can gain a significant competitive advantage in the marketplace.   
  • Increased price premium in selling their products. We estimate that our advanced generator can harvest about an additional $40,000 of wind energy per year for a 1-megawatt utility scale wind turbine. Even after licensing fees and tooling up costs, the increased electricity generation value can give our customers a strong case to be able to charge a premium, earning them several tens of thousands of dollars extra per wind turbine sold.  

There may be some inherent entrenchment in the wind industry to adopt new generator technology. However, the wind industry is still young, and there is ongoing innovation for all the major components of wind turbines — from generators to blades. It will not be an unusual step for wind manufacturers to shift to a better generator technology, especially given the potential financial upside of NextPower360’s technology.

We look forward to seeing where Michael and his team take the company. NextPower360 is currently raising on Netcapital.