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What are some of the barriers we face? It’s a lot more capital-intensive to come up with a major game-changing energy innovation than a new app, for instance.
Lester: You might call it the toughest kind of innovation. First of all, you’re innovating into an existing set of markets, into an industry that is dominated by very well-financed, very politically connected incumbent firms, and you’re innovating into an industry where the demands for reliability and security are extremely high. That is very different from what people typically think about when they think about innovation — like smartphones, where you’re talking about an entirely new market. It is a lot harder.
Wicklum: I’ve got a trite saying: As scientists and engineers, we have a difficult time scheduling our breakthroughs. What we can certainly do is create the conditions that maximize the probability of finding breakthroughs. And that’s why you need a well-thought-out, well-funded innovation ecosystem with both public and private partners, and you have to have organizations that will fill in the natural gaps in innovations — incubators that, at the appropriate time, can connect people with the appropriate business and technical skills and so on.
Philp: I’d like add to that from the electricity side, one of the unique challenges we face in Canada is powering our northern and remote communities. Most of them are run on diesel generators, with fuel that is either trucked in on ice roads or even flown in at enormous expense. We need to find solutions that are lower cost and more efficient.[/vc_column_text][/vc_column_inner][/vc_row_inner][vc_row_inner][vc_column_inner width=”2/3″][vc_column_text]
On the funding side, we’ve invested hundreds of billions of dollars in fossil fuel extraction. How do we mobilize financiers to put more into renewables and smart grid technologies?
Philp: To some degree, it’s a question of understanding the cost and benefit, and also a bit of a societal shift. We need to move away from a situation where all the costs of providing electricity are hidden, to a model where people are more closely involved with their own electricity consumption and generation — whether it be renewables on a rooftop or community level, or linking together the batteries of electric vehicles to provide resiliency in the event of an outage. That requires more engagement from customers and a willingness to pay for something they may not have paid for before.[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/3″][mk_image src=”https://energy-exchange.net/wp-content/uploads/2014/12/Graphic2-electricity.png” frame_style=”single_line” title=”It can cost 10 times more to generate electricity using diesel generators than electricity generated from a power plant on the main grid.” desc=”Source: Government of Canada” caption_location=”outside-image” crop=”false”][/vc_column_inner][/vc_row_inner][mk_padding_divider size=”20″][vc_column_text]Wicklum: Sophisticated institutional investors have very deliberate strategies based on risk. What we feel may happen is that by more clearly articulating the technical needs of the industry, now and in the future, a whole different ecosystem of non-traditional partners and funders will emerge as they understand there is a real end-user need for products that address these specifically defined challenges.
Lester: You would expect that disproportionate level of investment simply by virtue of the fact that investment, certainly private investment in research and development, tends to be in proportion to the scale of economic activity it’s supposed to address. A lot of the investment that’s going into the fossil fuel area is about incremental improvement to existing processes and technologies. When it comes to low-carbon options, including solar and wind and, I would add, nuclear, evolutionary improvements aren’t going to get us there. We’re going to need more radical advances for these things to become cost competitive. I don’t see that happening without major public investment.[/vc_column_text][vc_row_inner][vc_column_inner width=”2/3″][vc_column_text]
How do you make that happen?
Lester: We don’t have an enormous amount of time. We have to look at this in terms of three successive waves of innovation. The first wave is mainly about energy efficiency, where I think we can see relatively short-term gains. The second wave, taking us out to mid-century, is about technologies we know about today but that aren’t, for the most part, cost competitive — renewables, carbon capture and storage, nuclear, geothermal. The third wave is things that we may not know about today, but which may be on somebody’s lab bench or in somebody’s head, and these are things that may involve more fundamental advances in the way in which we store and transport and generate energy. Those are things we shouldn’t expect to see in the market until the second half of the century. All three waves are needed. Even if we meet our very ambitious mid-century goals for carbon reduction, we’d have to continue to innovate in the second half of the century to bring them down further. We have to be working on all simultaneously.[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/3″][mk_image src=”https://energy-exchange.net/wp-content/uploads/2014/12/carbon.png” frame_style=”single_line” title=”The Intergovernmental Panel on Climate Change says we must lower carbon emissions by 40 to 70 per cent by mid-century to limit the increase in global temperature to 2C — and reduce them to near-zero by 2099.” caption_location=”outside-image” align=”center” crop=”false”][/vc_column_inner][/vc_row_inner][vc_row_inner][vc_column_inner][mk_blockquote font_family=”none” align=”left”]In some regards, I think the state of energy innovation in Canada is extremely healthy.
— Dan Wicklum[/mk_blockquote][/vc_column_inner][/vc_row_inner][vc_row_inner][vc_column_inner][/vc_column_inner][/vc_row_inner][vc_row_inner][vc_column_inner width=”2/3″][vc_column_text]
Who should we be looking to as a model of energy innovation right now?
Wicklum: Many are looking at the oilsands sector and at COSIA as a model for how large multinationals can work together and get past intellectual property barriers, and we have a number of universities that are studying us to see what we’re all about.
Philp: I would point to California and Germany as jurisdictions that have aggressively moved on energy innovation and have started to see both some of the benefits and some of the next challenges and market opportunities that will come from greater innovation adoption.[/vc_column_text][vc_column_text]
Like what?
Philp: In California, they have so much solar on their system now that once the sun comes up, demand just flattens. That is changing the structure of how they contract for peaking generation, which is generally where most of the cost comes into the system. So how you deal with that and also with some of the variation that comes from having a lot of renewables on your system means you take steps to deploy energy storage. California has just asked for about 1,300 megawatts of energy storage over the next 10 years. That’s the first step to having more resiliency on the grid — energy stored, produced and consumed in cities, even within neighbourhoods, as opposed to a hub-and-spoke model, which we have right now.[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/3″][mk_image src=”https://energy-exchange.net/wp-content/uploads/2014/12/Cali1.png” frame_style=”single_line” title=”There are 244,000 solar installations in California (both commercial and residential), representing more than 2,300 megawatts of generation capacity. When the sun comes out, solar photovoltaic is generating so much energy that demand on power generation from other sources feeding the grid is significantly reduced.” desc=”Source: Government of California” caption_location=”outside-image” crop=”false”][/vc_column_inner][/vc_row_inner][mk_button size=”large” icon=”moon-next” url=”/innovation-panel/3/” align=”right” bg_color=”#13bdd2″ text_color=”dark”]Next Page[/mk_button][vc_column_text]