Why Canadian cleantech is forced to sell abroad

This article originally appeared in The Globe and Mail. Please click here to subscribe and view the original post.

Toronto, Ontario – February 26, 2021.

Hari Suthan is chief strategic growth and policy officer at Opus One Solutions

Hari Suthan is chief strategic growth and policy officer at Opus One Solutions

Canada is preparing to make a big splash in green infrastructure to kickstart the national economy and build back better after COVID-19. Canada is loaded with promising clean technology startups – they have the tech and they want to be part of the solution.

Could this be the moment for a giant splurge on homegrown innovation? Our domestic cleantech sector certainly hopes so, and some of our most innovative companies will undoubtedly do well as we stimulate our way into clean prosperity in the months and years to come.

But too many of our clean energy innovators will still find their paths blocked. They’ll be locked out of their home market and will have to look abroad to make their first sales. The problem won’t be their tech, or the size of the Canadian market, or the sincerity of the federal commitment to promoting innovation, although all these factors are often cited. No, the problem will be structural – the archaic state of our energy sector and the way it’s regulated will practically guarantee their inability to be part of the solution here.

It’s my job to find markets for my company, which makes software to manage complex energy flows for utilities, making grids cleaner, more efficient and more resilient. So I’ve seen the domestic issue firsthand. We’ve made some inroads at home, but in Canada, we’re just another little tech firm.

In Britain, by comparison, we’ve won six contracts in 24 months, including a zero-carbon demonstration project for the town of Rugeley, near Birmingham, in partnership with ENGIE. We’re rapidly becoming a go-to partner on energy transition.

The big difference is that Britain is one of the world’s most progressive countries when it comes to building a modern energy economy. It is field-testing and piloting multiple systems to let companies and even individuals choose how to interact with the national energy grid.

The country is moving away from large transmission and generation systems. A lot of its new capacity now comes from wind, batteries, solar and even individual owners of electric-vehicle chargers potentially feeding into the grid. Utilities are increasingly playing the role of facilitators, allowing stakeholders to make their own energy decisions rather than having them prescribed.

Meanwhile, the national regulator, the Office of Gas and Electricity Markets (OFGEM), has signalled that this movement won’t just be a sandbox project, but the industry standard. It’s allocating money to all utilities to help achieve these common goals.

It’s a different story in Canada. For all the best intentions of some political leaders, our national energy economy is still too fragmented, too overregulated and too technically backward to make the most of our homegrown cleantech. There is no federal Canadian equivalent to OFGEM. Here, energy regulation and often delivery are in provincial hands.

Anyone who follows Canadian debates over resource policy know what that means. Transformational change – and even incremental change – remains beyond the reach of even visionary leaders. The provinces don’t pull together in tandem, and our national energy economy remains fragmented and resistant to systemwide change.

To help 35 million Canadians, a cleantech company would have to clear regulatory hurdles with 10 provinces and three territories. But there’s just one regulator between that company and 65 million people in Britain. This is why Canadian cleantech finds itself making sales abroad.

Of course, overhauling Canadian federalism is a job for another day. But there are two big things the provinces, territories and utilities can do in order to take advantage of our homegrown cleantech.

First, our utilities need to digitize their creaky old grids. They should think like libraries: Don’t just throw out the index cards; start by duplicating them. Modernize as many functions, processes, controls and monitors as possible until you’re satisfied that it all works. Gradually, you can go paperless and start plugging in more innovative tech.

Second, governments and regulators need to open Canada’s energy sector to broader participation. They should think like the deregulated telecommunications industry: Reshape the business model to put business and residential customers at the centre. This will give Canadians greater input into the way they use energy and allow the utilities to facilitate change.

Canadian clean energy companies are doing great things, but too many have to go abroad to sell. As we look to spend big on clean infrastructure, we ought to be asking why.

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About Opus One Solutions
Opus One Solutions is a software engineering and solutions company with the vision of a digitalized, decentralized and decarbonized planet. Its intelligent energy networking platform, GridOS®, optimizes complex power flows so that it can deliver real-time energy management and integrated planning to distribution utilities and other managers of distributed energy assets. GridOS is modular, scalable, and integrates seamlessly with existing data systems to unlock greater potential for distributed energy resources, including renewable generation, energy storage, and responsive demand. GridOS also facilitates the management of microgrids — from homes to businesses to communities — for unparalleled grid resiliency and value to the electricity customer.

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