Interview with Doug Hall & Juliette DO, SIOUX Utilities
Affordable Clean Water & Power (plus Wi-Fi)… Delivered to a Village Near You!
I had the privilege of sitting down for a coffee with Doug Hall and Juliette Do in Bangkok, back in December 2019. They are such nice people and very passionate about their work. The Energy Bit would like to thank both of them for providing us with spectacular content, and we hope you enjoy this interview as much as we did!
How did SIOUX Utilities get its start? How far have you come?
SIOUX actually stands for “Solar Investor-Owned Utility Xystems”, and it aims to be the world’s first 100% off-grid nano utility offering clean power, drinking water and wifi services in rural areas, starting in Myanmar.
The trend to move from a centralized energy generation to distributed energy resources (DER) is a global trend. Rather than investing in costly transmission and distribution infrastructure, building generation units directly in areas where customers live is proving to be more efficient with less energy loss. SIOUX is taking this concept to an entirely new “nano” level. SIOUX will exclusively use Off-Grid Boxes in our underlying utility system.
In addition to offering retail power and water, SIOUX Utility Boxes can be used for medical clinics, schools, light commercial uses, retail, agricultural irrigation, and disaster relief.
“We’ve had a lot of interest from remote island resorts seeking to supplement or entirely replace costly diesel generator systems, and increase year-round reliability for both water and power. There are also many individual homeowners seeking off-grid independence who are interested in owning these boxes,” states SIOUX co-founder Doug Hall.
Empower Female Entrepreneurs
SIOUX’s business model is aimed at more than just the bottom line. It is one of our main objectives to promote local female market participation by hiring & training female operators and to encourage related cottage services such as clean water delivery businesses and other endeavors made possible by access to power, water, and more robust wi-fi.
Juliette Do, SIOUX co-founder, has over 20 years of experience working in the Finance and Energy sectors in the United States, with 10 years dedicated solely to the Investor Owned Utility (IOU) model. She has raised over $2 billion in energy financing for projects from the oil & gas industry to nearly every type of renewable sources such as solar, hydro, geothermal, wind and biomass.
Can you tell us about the premise for the STO you are running?
Securitized Token Offerings (STOs) are fully regulated, transparent and SEC-compliant asset-backed securities. Investors are protected and STO issuers can recognize significant savings in a traditionally cost-prohibitive undertaking. When you consider trustees & custodians, transfer agents, broker-dealers, dividend disbursements, portfolio management, and compliance fees, these costs are out of reach for most startups. STOs also provide significant record-keeping services and expedient transfers of dividends.
Before the SIOUX Utility Fund, there was no mechanism for investors to participate in the underlying technology’s earning potential — that is, just short of purchasing a box and setting up operations in a third world country. The SIOUX Utility Fund allows investors to purchase equity through a securitized token offering (STO).
Unlike most power projects that require extensive capital investment upfront with more than 10 years before they see a profit, SUBs can generate enough revenue to pay for themselves in less than 3 years with the remaining 17 years paying out pure net income. The SIOUX Fund will disburse 60-80% net profits back to investors on a quarterly basis, depending on reinvestment and expansion needs.
Because of the significant cost savings and ease of financial transfers, SIOUX will explore the mechanics of paying monthly or even weekly dividends to investors over time.
STOs are the natural evolution of traditional equity securities that used to issue paper stock certificates. We’re beginning to see regular NYSE start issuing STOs as a new equity asset class on their balance sheets. Wall Street and the SEC sentiment towards STO are significantly warmer than ICOs. The investment tide is turning.
Background in IOUs as an Investment Asset Class
What’s particularly unique and exciting about SIOUX is that it’s an Investor-Owned Utility (IOU), which is privately owned and operated by shareholders.
ROIs for IOUs range from 10-14% annually in the United States, even as state and federally regulated entities. Investors like this asset class because of the return profile, which is often a low risk with reliable dividends and solid appreciation over time due to the steady rise of power consumption, which only stands to grow further with electric cars, mobile devices, larger TVs and appliances.
When you start talking about IOUs within 1) renewable energy sector and overlay that with 2) emerging markets, the return profile starts looking very attractive to sophisticated investors.
Publicly operated utilities are by far the most common model in Asia. The differences in IOUs and Public Utilities can be immense. Since shareholders are funding these services, it forces the utility to operate leaner, more nimbly and more efficiently. To give you a quick background on the industry, in the U.S. 72% of the electric energy produced in 2017 was from IOUs.
We believe that the IOU model can be replicated in countries throughout Southeast Asia with immense success.
How does the blockchain fit in with your OffGridBox offering?
In addition to using blockchain for raising capital through STOs, SIOUX power will incorporate blockchain in our data monitoring packages. Each box contains several dozen sensors that track electric and water production, time of use, costs, inventory, maintenance, and a suite of other marketing services that encourage e-tailing for small local businesses. SIOUX also administers a household survey collecting household information. This data can all be captured, stored and cataloged using blockchain. At present, we are considering a handful of energy-centric blockchain protocols to run.
If you think about it, this is the first time that entire swaths of the world’s population will be monitored in any way. Many of these undeveloped countries don’t even have an accurate census on the number of individuals in remote villages. This information, in aggregate, is valuable and blockchain is the perfect ledger technology to capture this intelligence.
Could you briefly explain what an OffGridBox is and its benefits?
Imagine a portable self-contained unit that will generate power, filter potable drinking water and extend a virtual telecom mesh network into areas that are too poor or too remote for traditional utilities to reach. That is exactly what SIOUX delivers. We like to say that SIOUX Power begins where government services end.
Each stand-alone unit can generate 12 kW to 25 kW and easily filter more than 20,000 liters of water per day, servicing communities of 2,000 to 4,000 people (depending on the number of panels). They come equipped with ample battery storage and an optional desalinization unit, which is perfect for Myanmar’s often brackish groundwaters. Unlike mini-grids whose solar array requires a larger construction footprint with environmental assessments and approvals prior to breaking ground, each SIOUX unit uses a 6x6x6 ft – 10×10 ft total footprint. The utility box can be up and running in 3 hours or less. Another completely unique feature is that SIOUX boxes are portable, which makes them perfect for construction & mining companies and deployment as emergency disaster relief.
OffGridBox has already deployed boxes to Puerto Rico, the Philippines, the British Virgin Islands and Madagascar for emergency relief, offering power to phone chargers, wifi and clean drinking water to thousands of victims. These can be deployed on-site by a small truck, helicopter or boat. The unit itself is resilient. It can be shuttered in 30 minutes and can withstand a cyclone! SIOUX would like to incorporate designated utility boxes as “on-hand” emergency units to be immediately deployed should any of our service areas need relief.
Quality Components Equal Long Term Positive Income
SUB (Sioux Utility Box) components are sourced and manufactured in Germany and greater Europe. They’ve been stringently tested and vetted. As such, SUBs come with warranties and EU and US safety & performance standards that far exceed those found in many Chinese-made components. Why does this matter? When evaluating the overall cost of an energy project, the full useful life of an asset must be taken into consideration. Typically this is 20-30 years for solar projects. If any component in the system fails or if the system isn’t properly maintained, the useful life can be reduced by 50-75%, effectively doubling the cost of the project by 200% or more. The impacts are worse when proper and regular maintenance isn’t applied. That makes a BIG difference to governments, developers, investors, and end-users.
As the main grid continues to extend further out, these boxes can either be moved to even more remote locations or can be absorbed by the grid as an additional power provider. SIOUX is also looking at distribution models where a box is loaded on a barge that visits different riverside villages, delivering fresh water and power charges, throughout the week. There are many possibilities to expand our business model.
How do you ensure reliability? How is the maintenance provided and how much are the approximate costs?
SIOUX Utility Boxes are equipped with dozens of real-time sensors collecting a myriad of data 24/7. Many of these sensors are used for remote monitoring of each component and all SUBs at an aggregate portfolio, taking the guess work out and decreasing the unexpected component failure rate to nearly zero. The system can detect when components aren’t working efficiently or are about to fail, at which point we send out an engineering technician to the site before any issues occur. The outcome of real-time virtual monitoring ensures reliability and optimizes operating & maintenance costs. Hundreds of boxes can be managed in a control room at one location.
The cost for monitoring is as low as $100 per month per box, and each box averages about $400 in annual maintenance costs.
Where do you see your position in the utility box market at the moment? How many consumers are connected to your services as of today?
The utility box market is still new, and so far no one is offering water purification to the level we are. The underlying technology has been used in Africa for a while already. By most accounts, this has been wildly successful and readily adopted. We are well beyond the proof of concept stage. The SIOUX Utility Fund will help us replicate this model, establish a broad market presence, and scale quickly.
What is your current geographic market area? Where are the growth areas? How is the legislation for OffGridBoxes defined? How does this differ regionally?
SIOUX’s focus will be in Southeast Asia, beginning in Myanmar. Myanmar’s National Electrification Project (NEP) aims to achieve 100 percent electrification of Myanmar households by 2030 at an estimated cost of $5.8 billion, which means the most remote areas aren’t expected to join the grid for another 5-10 years — and that’s if the NEP stays on target and on budget. This has already been proven challenging given recent issues concerning power purchase agreements (PPAs) between private developers and rural townships, as well as funding constraints.
Conversely, SIOUX Utility Boxes can deliver water and power services immediately, and do it cost-effectively. This is due to our unique ability to provide affordable, clean drinking water at every location.
SIOUX Utility Boxes will operate within the framework set forth in Myanmar’s National Energy Plan for small scale distributed energy resources. The national plan allows for the decentralization of decision-making, localizing the responsibilities to outer states and municipal governments.
The “official” regulatory framework is different from country to country, and village to village. What SIOUX has found, however, is that local municipalities are happy to offload the responsibility of providing these basic services and often use revenues from our Community Partnership Model to address other civic needs. This has been positively received universally.
Beyond Myanmar, SIOUX will target new markets in Southeast Asia, such as Cambodia, based on need and market viability. The goal is to be in at least four different countries by the end of 2025.
What is the process if I want to order an OffGridBox? How long does it take?
Individual Offgrid Boxes can be ordered through SIOUX or its parent company Alpha Meridian Group. We plan to build an assembly plant in SE Asia by mid-2020, so what would have taken up to 2 months to have a box shipped from Europe last year will be decreased to as little as 1-2 weeks’ delivery time.
How do you see the future of the off-grid utility market? Where do you see the biggest demand happening? Is there space for more players?
Demand for power and water has existed in these remote, unserviced regions literally forever. Yet these unfortunate areas stand to wait up to a decade or more to get lights and power and clean water… and that’s where SIOUX steps in. As our communities expand further and further into uninhabited areas, we see the need for instant infrastructure at far-flung resorts, family homesteads, science research facilities, etc.
People can’t rely on the grid anymore, even in Yangon where 80% of Myanmar’s grid is located. Self-sufficiency will be the primary source of security in the very near future.
Contact SIOUX Utilities:
Doug Hall – firstname.lastname@example.org
Juliette Do – Juliette@alphameridiangroup.com