Note: This post originally appeared in Embassy.
Canada has a global opportunity in energy and it’s not oil.
Countries with large populations intent on growing a dynamic middle class share one common need: More electricity. Electricity to light homes, power phones and computers, and operate new workplaces. Electricity that is reasonably priced and delivered on reliable grids. And just as important, clean electricity, generated in ways that do not foul the air, soil or water.
Herein lies a significant opportunity for the Canadian power industry. Canada, with a sophisticated electrical system serving both densely populated cities and vast rural areas, has the ability to plan and build new grids for power-poor countries.
Little surprise then that energy industry leaders are travelling as part of the trade delegation to China being led by Ontario Premier Kathleen Wynne, from November 5 to 14.
The global scale of the opportunity is staggering. Take Nepal, a country I visited recently. It has a population slightly smaller than Canada’s, yet its peak electricity demand this year will be just under 1,300 megawatts, according to the Nepal Electricity Authority. That is about one-twentieth the size of the record peak demand in Ontario alone. There is room for exponential growth in Nepal’s electricity sector. And it is not alone.
Nepal is perched between the two most populous nations on earth—India and China—both of which are also intent on growing their economies and expanding their middle classes. They are looking to strengthen the grids in their cities and expand them into the countryside. Ditto Latin America and Africa.
The Advanced Energy Centre at MaRS has already negotiated a Memorandum of Understanding with two key organizations in China to pursue this opportunity. With this month’s mission to China, we are taking the next step of turning these paper agreements into commercial deals that that will help China address its poor power capacity.
Ontario, which has closed its coal plants and embraced renewable energy, is perfectly positioned to help build new clean energy grids elsewhere.
While Ontario’s phase-out of coal was sometimes painful, featuring years of political infighting as well as a challenge by seven US states to the Environmental Protection Agency over the province’s coal-plant emissions, the experience can be put to good use today.
It is in our own commercial and social interest to use our expertise in the massive build-out of electric grids around the world, and further, to ensure that these new grids are based on the cleanest possible energy.
China, which is well aware of the need to develop a cleaner grid because of serious air pollution in its cities, is a natural customer. So how can we help China, and ourselves? By offering both our expertise and our innovative energy technologies.
Some of Ontario’s expertise is in recognizing what might best be called industry-wide barriers to change. I have visited many countries around the globe, and no matter what the geographical, political or economic setting, I have found that electricity systems facing change operate with similar players, each of which inhabits strongly constructed silos that make systemic change difficult.
Governments, for example, like to decree concrete projects and programs. Entrepreneurs like to start with an objective, but need the flexibility to pursue that objective in the best way possible. The primary concern of regulators is maintaining moderate prices for ratepayers, while utilities want to maximize their return on assets.
Harnessing these different teams to work toward a common goal is not easy, but Ontario can help other jurisdictions like China get there.
First, we need to connect our utilities and entrepreneurs with potential customers abroad. It’s all very well to book a ticket to Shanghai, but what do you do when you get there?
Existing infrastructure can help. For example, Western University has created an agency operating in China called WORLDiscoveries, with the objective to link potential customers in China with suppliers in Canada. Its focus to date has been primarily in health sciences, but during this trade mission, we will be exploring ways to add energy to their portfolio.
With the right connections, Ontario utilities that have non-regulated business development units could offer their expertise to countries like China. One example is Oakville Hydro, which has incorporated new systems that let operators monitor and react quickly to outages or other changes on the grid, something Chinese utilities could benefit from.
Likewise, by making connections to the right export partners and customers, Ontario entrepreneurs could close sales in China. Examples include Survalent Technology, which worked with Oakville Hydro; dTechs Electrical Profile Management, whose products include equipment that can identify power theft, a plague for utilities worldwide; and ecobee, an Ontario company that makes smart thermostats.
One of the central tasks for the current trade mission will be to find out where these opportunities lie.
Clean energy is at the heart of China’s economic strategy, and other nations are following suit. Canada, and particularly Ontario, have huge advantages in technology and in grid development that can help our businesses win more than our fair share of this global sector.
We have a broad understanding of what China’s electricity system needs. Now it’s time for us to gather the detailed intelligence we need to connect with the right Chinese firms and officials, and start closing sales.