Energy is the next internet.
By Dan Doiron
As the power industry undergoes a paradigm shift, I can’t help but think of my experience at NBTel in the heady early days of telecom’s digital revolution, when a little phone company from New Brunswick became a global innovator. When I look at Saint John Energy’s smart grid initiative, I see parallels. It’s an opportunity for our utility to be a leader in innovation and drive spinoff economic development.
More on that below. First, a word on the larger context, the unstoppable trends transforming how energy will be generated and distributed not just in Saint John, but globally. This disruption isn’t only about new technology, although that’s certainly part of it. This is about a whole new role and business model for utilities the world over.
To understand just how profound a transformation we’re in for, I turn to The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World by Jeremy Rifkin. This fascinating book explains the energy revolution from an economic development perspective premised on four related pillars. Here’s what stood out to me:
The shift in power generation from big, centralized sources to dispersed microgeneration. Rather than investment-heavy infrastructure like dams and nuclear power plants, think solar technology, wind turbines and other green energy generators on every home and building. The challenge with green energy is storage. Which leads to Rifkin’s second pillar.
Electric cars not just as green transportation, but as a way for households to store and access power in their batteries.
Smart grids are like the internet of the power grid. Decentralized, two-way, connected, lateral, collaborative and digital, they will allow us to buy, sell, trade and manage power in the complicated network of microgeneration.
By investing in Rifkin’s strategy, I think Saint John Energy could be at the forefront of utility innovation, and an important driver in our local economy’s development. It happened with NBTel and other companies. There’s no reason it can’t happen here again.
Saint John Energy has certain advantages.
Like NBTel before them, they are small and nimble. They can move quickly to do the iterative testing new technology requires. They have a history of operational excellence. Their customers trust them, so are more likely to be willing test subjects and early adopters of new innovations. Remember, the smart grid isn’t just about selling new technology to their customers, it’s bringing them into a whole new world of energy management.
That model only starts with the smart grid. It’s a means, not an end. It’s the foundation, in the same way my smartphone and Wi-Fi are the hardware and juice for the real value: the applications and services that keep expanding my phone’s capability, the innovations that are built on top of that underlying technology.
Likewise, the real value of the smart grid lies in it being a catalyst and an enabler for the innovation that’s going to grow up around it. It’s not just about putting in smart meters. It’s about partnerships. It’s about building an energy ecosystem that, among other things, will be a catalyst for economic growth.
That’s a big part of the reason NBTel was so successful. Major players like Nortel saw us as a place to innovate and bring solutions to its customers. And it wasn’t just big companies. When iMagicTV came out with the technology to send TV over the internet, it needed to digitally compress the video streams because the internet was not sufficient to stream this content like it is today; slow back then, in its early days. That lead to a successful partnership with an emerging technology startup that had developed compression software.
It was a risk partnering with such a new player, and it paid off. That’s because the culture of NBTel allowed us to take these risks, which were not always successful. We were often in over our heads. We were allowed to be.
Eventually we had to build a demonstration centre in the lobby of Brunswick Square because we had two or three international companies a week coming to visit, to see what we were up to, to see how we innovated. We weren’t just a phone company. We were a living lab of telecom innovation.
Saint John Energy could emerge in the same way as a catalyst for smart grid innovations. And there’s the potential to nurture a number of other players, including new, local startups that will be spurred by opportunity close to home. Economic Development Greater Saint John recently launched a strategy that includes an innovation hub in the uptown. This kind of support, along with increased access to risk capital, could be a real boon to green energy innovation.
Saint John Energy is currently in the business of energy distribution in a strongly regulated environment. They are very good at that. The business they will be in is much more complicated and exciting.
Remember, Innovation = Invention + Exploitation. It’s a simple equation, but a huge distinction. Invention alone isn’t enough. It’s what you do with it that matters. I’m excited to see what Saint John Energy does with their smart grid; I know what it can do for Saint John.
Dan Doiron is a professor in the Faculty of Business at University of New Brunswick Saint John. He is a mentor with the Saint John Navigator startup incubator, sits on the board of the Greater Saint John YMCA, manages the Miramichi Technology Fund and is a director of the Wallace McCain Institute. Prior to joining UNB, Dan helped found two technology companies for NBTel and Aliant. He has a Bachelor’s degree in Electrical Engineering from UNB and a Masters in the Management of Technology from MIT.