4 Things Canadian Cleantech Needs to Know to Clean Up

By Bruce Dudley – Senior Vice President at The Delphi Group

At the Cleantech Group’s Charting the Future, Connecting the Globe conference, held in San Francisco in late January, one thing was clear: now is the time for Canadian cleantech companies to clean up (literally and figuratively).

I’ve been working on the cleantech file with The Delphi Group since 1999. Surrounded by 600 clean technology luminaries and leaders from around the world, I was reminded that this is an incredibly dynamic sector with a ton of upside – and some risk. Below are four learnings from the conference that have a lot of relevance for Canadian companies.

1. The U.S. is #&%ed but States and Business Will Save the Day

That might be overly dramatic paraphrasing but, give the proximity of this conference to the recent U.S. inauguration, a lot of the speakers certainly came out swinging. Case in point: John Chiang, the California State Treasurer, who – when referring to his recent report on green bonds and his bullishness on tapping in to the potential of that market – said that “Washington can’t stop us.”

A delightfully still-employed advisor to the U.S. Department of Energy (DOE) confirmed that it’s tough to figure out what’s going to happen at the federal level in the U.S. The good news? Business has already created a ton of momentum in the clean energy market – although she reminded the crowd that it’s essential to drive down costs in order to facilitate scale. We’ve seen this play out with both photovoltaics (solar energy) and wind energy. Even as federal incentives have eroded, the market has grown due to costs being driven down in the U.S. and China. In turn, this has incentivized further investment.

And then there was the barn-burning Canadian. Tom Rand, Managing Partner of Arctern Ventures and Senior Advisor at the MaRS Discovery District, predicted that Canada is going to be a great place for financiers and climate change work. After all, frustrated capital in the U.S. – all those investment dollars that no longer have a place to go – may very well find a home in Canada. We’re open to trade (check), we have a national price on carbon (check), and we are developing favourable and stable conditions for business (double check). The time is now to capitalize on our share of that burgeoning market so that we can compete with the global powerhouses – and capture our share of the opportunity before China does.

2. Energy and Big Data are Hot

Energy continues to be the most substantive connective tissue in cleantech discussions. Energy storage, of course, is the puzzle that everyone wants to solve. How do we continue to drive down the costs of storage in order to support the large-scale deployment of wind and solar energy? In addition, the digitization of energy and other demands like electrification of transport are driving rapid change. Canada is well positioned as cleantech and high tech converge.

3. Canadian Cleantech Companies Punch Above Their Weight

The Cleantech Group unveiled its annual Global Cleantech 100 list, which features “companies that are best positioned to solve tomorrow’s clean technology challenges…[and that have] the highest potential to make the most significant market impact within a 5-10 year timeframe.”

One hundred of the most innovative companies from around the world…and eleven were Canadian (nine of them funded by SDTC): Axine Water Technologies, Carboncure, Corvus Energy, Ecobee, Enbala Power Networks, FarmersEdge, GaN Systems, General Fusion, Greenmantra Technologies, Minesense, and Saltworks

In addition, Vancouver-based Chrysalix Venture Capital was named one of the Financial Investors of the Year, based on the percentage of its cleantech venture portfolio in the 2017 Global Cleantech 100.

Not too shabby. And we’re just getting started.

4. The Keys to the Cleantech Future: Mastering Acceleration and Investment

One of Canada’s strengths when it comes to cleantech is that our provincial and federal governments get involved with our cleantech companies early, when the risks are high. We have a tremendously healthy pipeline of new ideas and products. However, we tend to falter when it comes to (a) helping these companies commercialize their products and services, and (b) finding domestic and international sales, which are key to growing jobs and the economy.

The U.S. provides a source for comparison that we can learn from, and helps us reflect on what we do well:

• Over the last few decades, the U.S. DOE has structured its programs to target reducing the cost of a particular technology. How? They figure out where the game changers are and then direct research to lower the cost of the technology. Lower costs accelerate deployment and make American technologies more competitive on the global stage.
• California’s strength is commercialization; they are better than we are at traversing the Valley of Death. Their success may stem from their high-tech roots, and is important when you consider that cleantech has more than one Valley of Death. As we build out our commercialization skills, sending a shuttle filled with recruitment brochures to the many successful Canadians working in Silicon Valley might not be a bad idea.
• The fourth Industrial Revolution (IR4) is bringing cleantech and high tech closer together (cases in point: smart grids, smart buildings). Integrative platforms, artificial intelligence (AI) and machine learning are all highly disruptive and trending in multiple sectors, including the natural resources sectors.

Bruce Dudley is a Senior Vice President at The Delphi Group and is based in the Ottawa office. To find out more about how Delphi can help you make sense of risks and opportunities you can contact us at bdudley@delphi.ca.