At the Advanced Energy Centre (AEC), we spend a lot of time thinking about how to speed up the adoption of innovation in the world’s energy systems. We fundamentally believe that doing so will increase the resiliency and flexibility of our power system, improve the system’s ability to adapt to change and help to leverage opportunities. We also believe that effective adoption of innovation in the energy system will ultimately lower the cost of energy for consumers.
One of our fascinating (if not entirely unexpected) findings is that the core challenges of adopting innovation have almost nothing to do with technology. The problems are largely non-technical. Instead, they are largely structural barriers caused by human interactions. The energy system is comprised of people who are acting quite rationally, consistent with the perspectives and roles they are expected to play in their work. Each individual’s action is shaped not only by the unique lens through which they view the system, but also by an incentive structure specific to their role.
We have also found (again, not entirely unexpectedly), that the participants in the energy system (including governments, regulators, utilities and innovators) largely agree on the broader systems goals. Despite their unique perspectives and roles, they all believe in investing for the future, leveraging innovation and taking a path toward adaptability. Individuals acknowledge the need to be active agents of change in order to continue making the right decisions for ratepayers, who are the ultimate customers.
In Ontario, the AEC is working with a diverse set of willing participants to align interests and, in doing so, to identify better ways of approaching the challenges and opportunities posed by the technology available today. Our thesis is that real systems change is achievable through a series of small but integrated actions that will provide strong evidence for the policy changes, solutions and capacity-building required for the system to become receptive to change.
Part of the AEC’s role is to share Ontario’s story with international markets. We have recently completed trips to Chile and Colombia, supported by Canada’s excellent international trade organizations, the Department of Foreign Affairs, Trade and Development and Export Development Canada.
There is much to talk about. Virtually every interaction we have had abroad has included complaints about the core challenges identified by the AEC—that is, challenges with regulators, a lack of innovation in utilities and a culture of risk aversion, to name just a few. Indeed, effectively all of the issues that we uncovered in our analysis of the Ontario energy system resonated with energy players in both Chile and Colombia. It turns out that our problems and challenges are pretty much the same because, at the end of the day, it is still people—people who are doing their best given their perspectives, objectives and incentives—who run utilities, regulators, innovations and government.
This is really exciting to the AEC, because it means that what we are learning and developing here in Ontario will be highly exportable. We are creating rich relationships with other markets—who, like us, want to be able to adopt innovation faster—and we plan on helping them.