How the Innovation Community Can Answer the “If Only” Call of Electric Utilities

Authors: Nolan Browne and Chris Richardson

Summary: While reliability is the name of the game for electric utilities, thoughtful utilities often ponder the feats they could accomplish “if only we could…” While some startups are looking to disrupt centralized grid-connected power generation, many others are eager to partner with forward-thinking utilities. 

Open Innovation Challenges such as those run by ProblemSpace can be powerful tools for solving intractable technical challenges that may be a barrier to healthy and often necessary evolution at electric utilities.

Disruption is not the goal of a responsible utility.

Utilities aren’t known for being the fastest-moving bunch, and understandably so. Their core mission is to provide power that is reliable and cheap–in that order. Decades of balancing traditional fuel sources have made utilities adept at delivering on these goals for customers. Major changes could bring the grid dangerously to disequilibrium of supply and demand.

Yet disruption is here ready or not. Through state-level mandates and net metering rules, utilities are integrating intermittent renewable resources – some happily, others not. The challenges of balancing intermittency only increase as renewables’ share increases. 

While new technologies can threaten the delicate equilibrium of power generation, innovation can also be the salvation for forward-thinking utilities.

Thoughtful utilities say, “if only…”

Utilities know they cannot be comfortable with the status quo. 

One only needs to view an image of the NYC Skyline during Hurricane Sandy to see how distributed generation can add resiliency in an era of increasing climate risks. Leaders at Con Ed may have murmured, “if only we could provide our customers the resilience of decentralized power generation without sacrificing the economies of scale that can only be provided through the power grid.”

PG&E is in bankruptcy proceedings because of wildfires that burned nearly the entire town of Paradise, CA and its surroundings. Given that the woody area surrounding its wires effectively acts as kindling, leaders at PG&E may have asked, “if only we could effectively clear the vegetation in a way that could harness the energy in that biomass, we could lessen the wildfire risk to our customers while providing new sources of renewable energy.”

Whether these “if only’s” are moonshot ideas or simply areas for which the utility does not have bleeding-edge expertise internally, they represent tremendous opportunities that will remain untapped without access to the best disruptive ideas from the startup ecosystem.

Startups are eager to disrupt the status quo, but most would happily partner with forward-thinking utilities

Sure, some startups have a “stick it to the man” attitude and are dead set on breaking the incumbent business model. Most effective startups, however, are eager to integrate into the existing industry standards that will be key to market adoption and access.

For instance, the solid oxide fuel cell company Watt Fuel Cell has partnered with People’s Gas to combine fuel cell technology with cheap and abundant natural gas in the Marcellus Shale to power homes in Pennsylvania. While this specific innovation represents a challenge to electric utilities, it is an example of the eagerness of startups to partner with established players (in this case a gas utility) in order to accelerate market adoption of their ideas.

Open Innovation Challenges can connect startups with utilities looking to solve technical challenges

Legacy companies such as electric utilities often struggle to work with startups. Early-stage start-ups are often light on proof points and frankly would not make it through a traditional procurement process at a utility.

Moreover, startups often are formed with some cool technology in a search of customer problems to solve. It is unlikely that existing startups have been created with precisely your challenge in mind. The solution to your specific challenge very well may not exist at established startups, though the technical building blocks may.

ADL Ventures launched ProblemSpace with an Innovative Pathways grant from the Department of Energy to allow corporates to tap into robust entrepreneurial networks to solve gnarly “if only” problems. ProblemSpace works alongside utilities to select finalists and ultimately winners of competitions for which only the most qualified entrepreneurs and academics are personally invited.

The ADL Ventures team is comprised of energy-industry leaders that know what good looks like at scale in a corporate environment, as well as what disruption looks like at innovative startups. We have worked in the energy industry with utilities such as PG&E to launch open innovation challenges that solve vexing problems, such as the challenge of fire-prone woody biomass surrounding its transmission and distribution lines.

Contact us to discuss ways in which the American innovation ecosystem can help your electric utility tap into the innovation ecosystem to solve gnarly technical problems.

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Author: Chris Richardson