CSIRO to Apple: an interview with Windlab cofounder Dr Nathan Steggel
Dr Nathan Steggel
In August, Apple announced an offtake agreement from the Upper Burdekin Wind Farm, a 600 megawatt project located on pastoral land in Gugu Badhun country in north Queensland. The project is owned by Windlab, but what many people don’t know is that the company was founded – and remains headquartered – in Canberra.
Windlab is a CSIRO overnight success story 21 years in the making. We chatted with cofounder Dr Nathan Steggel to learn more about Windlab and its Canberra connection.
Early fascination with wind energy
UK-born Dr Nathan Steggel worked with the CSIRO’s Wind Energy Research Unit. And while he is now an expert in wind power, this wasn’t always the case. He was interested in wind turbines in the 1990s but struggled to get a job in that sector. So instead, he studied for a PhD in aerodynamics, followed by a post-doctorate at the University of Surrey, where he worked in their EnFlo Wind Tunnel to measure the flow and dispersion of wind-borne pollution.
Then one day, a friend sent him an advertisement for a job working on wind technology – in Canberra. Thus began a journey halfway across the world and cofounding a multimillion-dollar company.
Phone interview in a thunderstorm
Dr Steggel had never heard of CSIRO before applying for the job, and he didn’t know much about Canberra. ‘I did a terrible phone interview,’ he laughed.
‘There was a thunderstorm in Canberra, and the phone audio quality was terrible. But it worked to my advantage as when [Windlab cofounder and CSIRO researcher] Dr Keith Ayotte asked me extremely technical questions, I pretended I couldn’t hear him. He had to repeat the questions, which gave me time to think of how to answer.’
Thunderstorm notwithstanding, Dr Steggel must have nailed the interview, as not only did he get the job, but he also cofounded Windlab with his interviewer, Dr Keith Ayotte, in one of CSIRO’s first commercial spinoffs.
Canberra HQ
The Steggel family’s Y2K move down under wasn’t all smooth sailing. ‘My wife and I hated Canberra at first,’ he said. ‘But I liked my job.’
Having lived in Guildford, Surrey, they thought Canberra would have a similar small-town feel. But the quietness took a bit of getting used to.
‘We walked around Civic and wondered if it was a public holiday because there weren’t many people,’ he joked. ‘But our view of Canberra changed when we had kids. Now I can’t even go to the Jamison Centre without recognising several people I know.’
While Windlab has grown into a global company, Canberra is still home – for now. ‘Being in Canberra is good. You’ve got the Federal Government here, and we can go and see the local MPs for our projects when they are in Canberra during parliamentary sitting week,’ he said. ‘You’ve got ANU, CSIRO, University of Canberra and other research organisations. And you’ve got smart young people who are full of ideas.’
“‘Being in Canberra is good. You’ve got the Federal Government here, and we can go and see the local MPs for our projects when they are in Canberra during the parliamentary sitting week,’ he said.”
But recruitment in Canberra is a crucial problem. ‘We’re trying to hire more people, but it’s just tough.’
CSIRO commercialisation success
When he started work at CSIRO in 2000, Dr Steggel immediately noticed CSIRO’s strong commercial focus, with 30 per cent of revenue being sourced commercially.
Dr Steggel led the development of a wind prospecting tool called WindScape which was commercially released in 2001. And in 2003, he was cofounder of a CSIRO spinoff company called Windlab which today still owns and uses WindScape. Windlab is often referenced as the first in a series of successful CSIRO spinoffs, marking a significant shift in how the Australian Government agency did business.
CSIRO was instrumental in the process of starting up the early company. ‘It was essentially their intellectual property at this point,’ said Dr Steggel. ‘We got taken along.’
CSIRO installed the first CEO of the company and suggested they take two staff who had been working on the project. They also arranged for a consultant to write the company’s first business plan. And while with the benefit of hindsight, Dr Steggel would have done some things differently (including ensuring he was on the board), CSIRO’s help was instrumental to Windlab’s early success.
Dr Steggel was initially hired to work in CSIRO’s Wind Energy Research Unit, the go-to place for measuring wind. But the scope of work soon changed as customers increasingly wanted not just to measure wind but to identify the best locations for building wind farms. So the unit began to shift focus on producing services and products to meet this demand.
They developed WindScape, a weather model that produced high-resolution maps quickly and easily, including over large terrain areas. Windlab’s forecasting and mapping product covered large areas, such as entire states, while allowing customers to drill down to see details such as hills and ridgelines. While others produced maps, their secret sauce was the speed and quality of what they produced. Later Windlab moved into developing its own wind farm projects.
In the early stages, the cofounders also did brisk business as consultants. Dr Steggel admits it was tempting to continue doing consultancy work, ‘We could have built a nice business as consultants,’ he said. But instead, they opted for a more tech-focused solution as they believed it would be more exciting for investors.
Finding funding
Realising they needed funds to grow, Dr Steggel and Dr Ayotte approached existing clients to see if they wanted to buy Windlab. While there was at least one offer, CSIRO rejected these and worked with the co-founders to establish a spinoff company.
Epicorp, an ACT Government seed fund and incubator provided much-needed support, especially in the early stages. In addition to funding, it also provided Windlab with office space and helped it develop a more strategic, long-term outlook.
As they required more funds, Windlab raised money from various sources, including Canberra based angel investors, venture capital and corporate debt – before being acquired by Andrew Forrest’s Squadron Energy and Federation Asset Management two years ago in a $75 million private equity takeover.
But in the early days, Dr Steggel recalls pitching over and over again. ‘I learnt a lot about making the pitch succinct,’ he said. ‘By the time we got to angel investor presentations, it was a bit more rounded as a business and strategic presentation.’ He noted the importance of explaining technical details simply and focusing on the long-term strategic view and the potential return on investment.
Taking on venture capital was a major change for the company. ‘We kept running out of money,’ Dr Steggel said. ‘If I did it again, I’m not sure I’d go the venture capital route, but if I did, I would be a bit smarter about the agreement and any strings attached.’
Elaborating further, he said the venture capitalist wanted them to take their product to the United States. So they did – only to lose money in their least successful venture over the past 20 years.
Storms and doldrums
Windlab has not experienced smooth sailing, navigating storms and doldrums along with the global winds of instability. He said, ‘up until around 2014 or so, Australia was a tough place to do anything [on renewable energy]’. ‘And it’s not just Australia; our projects in South Africa have also experienced peaks and troughs, with political leadership impacting the renewable energy industry.’
‘There is nothing you can do for five or six years, and then suddenly it’s all go, and there’s a ton of stuff happening,’ he said, noting the challenge of reconciling this with investor expectations. ‘You need to look at the company through a five to ten-year prism rather than a shorter 18-month one,’ he said.
“There is nothing you can do for five or six years, and then suddenly it’s all go, and there’s a ton of stuff happening.”
‘If I were looking at this again or helping other young companies, I’d be thinking about the cash flow because you don’t want to keep raising money because it just kills your value,’ he said. ‘And it’s also tough when you keep running out of money’.
But during slack times, the ACT Government’s commitment to 100 per cent renewables kept Windlab afloat. ‘The ACT Government saved the Australian renewable energy industry a bit,’ he said.
Public to private
Windlab successfully listed on the ASX in 2017, raising $50 million in capital. Windlab allocated 50 per cent of the proceeds of the listing to Kennedy Energy Park, an innovative 60MW wind, solar and storage energy facility near Hughenden in Far North Queensland.
But then, new national energy rules changed the landscape, impacting the viability of Windlab’s renewable energy projects. As a result, Windlab’s share price plummeted to a third of what it listed for. This development led to Windlab searching for a buyer for the company.
In 2020, Windlab was acquired by Andrew Forrest’s company, Squadron Energy,and Federation Asset Management in a $75 million deal. According to Dr Steggel, Federation Asset Management was the preferred party for purchasing the company. Windlab knew it had a co-buyer, but its identity was silent until the final stage. Eventually, they learnt it was Squadron Energy.
The change in ownership has not only kept Windlab afloat during tough times. It has also meant that the company now has an owner who believes in renewable energy and has a long-term strategic vision of Windlab becoming one of the top energy companies in Australia.
Along comes Apple
In April, Apple entered into an power purchase agreement to purchase 600GWh a year, from 2026, from one of Windlab’s Queensland wind farms. Dr Steggel said the deal makes good commercial sense; not only is Apple helping the environment, but it is effectively buying electricity cheaper than it would obtain from conventional sources.
We wish Windlab continued success and hope it builds its Canberra presence.
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