Calgary Economic Development and Kinetica Ventures co-hosted the fifth Innovate Straight Talk event September 29. The conversation continued about getting energy tech innovations to market with a deeper look at piloting, starting with the end in mind.
Why do we pilot? A pilot is a field-based test that de-risks a technology and moves it closer to becoming commercially viable and ready for wide deployment. So creating a commercially proven technology that has widespread deployment is the ultimate objective of both pilot testing and the subsequent step of commercial demonstration plants. Therefore, the design of the pilot system should have this ultimate objective as its core focus.
Pilot testing is often the first opportunity that a technology developer and industry partner has to develop and strengthen their working relationship.
Pilot testing also provides important information that builds the foundation for success for the subsequent steps. It should answer some very specific and focused questions with regards to both technical and economic performance that allow both the technology developer and the pilot host to better understand how close the technology is to being ready for “prime time”, and what specific things still need to be addressed (e.g. cost reductions; operational uptime; etc.).
The drivers for pilots are different at various points along the commercialization path and for specific applications. Whether it’s pipeline leak detection, enhanced oil recovery or energy storage projects, energy technology developers and industry need to work together to understand where to start to ensure a successful pilot.
Innovate Straight will continue into 2017 with two more events on the topic of piloting: How do you get from where you are today to that new ideal system? And exploring the implementation of a new approach.
Here’s a re-cap of the September 29 session:
- Joe Kuhach, Nsolv
- Adrian Banica, Illusense, Synodon, ACTia
- Wayne Monnery, Xergy
- Mark Bohm, Suncor
Moderator: Heather Campbell, Sustainable Development Technology Canada (SDTC)
How do you deal with problem definition and flexibility around problem definition for technology development leading to a pilot?
- The biggest challenge with pilots starts with problem definition – you need to clearly identify what problems will be addressed by the pilot from the get go.
- You also need a clear commercial hypothesis: what is the full-scale value proposition? What are the costs and how will the technology create better value?
- Begin with the end in mind – work backwards from full commercial deployment and understand what questions need to be answered at each step -- how will the technology be scaled from pilot to future commercial deployment, what are you’re key concerns with the technology, etc.
- Tech developers need to have an awareness of what the end user finds important – this seems obvious but some developers don’t ask this question and it trips them down the road.
- Planning, planning, planning – make sure to look at the forest, not just the trees!
- People and interpersonal communication matters.
- Technology developers need to ask ‘what don’t I know yet’
A successful pilot should…
- …reduce uncertainty about the technology at a large scale and provide data at every stage of the pilot; this will help end users make informed and more timely decisions re: adoption.
- …help you fail quickly and move on or make adjustments as required.
- …get an end user investing from the beginning so you can access their funding and their technical expertise at every stage.
How should a pilot be set up so that a successful outcome leads easily to either a scaled-up pilot or a commercial demonstration plant?
- Ensure the pilot is focused only on what is important at this phase of the commercialization process – sometimes pilot test plans are too complex and they don’t answer the right question.
- There is significant value in phasing your pilot to achieve a commercial goal.
- Be aware of marketplace dynamics that may affect your value proposition.
- Be aware of the Commercialization Pathway.
Pilots should provide a good balance of technical and commercial aspects – how do we make sure that the pilot addresses the techno-economics and also helps the technology developer down the path towards being ready to scale their technology?
- Modelling and simulation is always a good idea as more data is drawn from the pilot. This allows end users to see how they could commercialize the technology.
- Developers should track the data all the way along and communicate that with their customers regularly.
- Pilots answer key questions in the minds of the customers, and not just related to the technology. Demonstrating the company can actually deliver the results they committed to is equally as important as the technical aspects.
How would you design a pilot to have effective partners?
- At the end of the day, industry is developing the resource on behalf of Albertans so having buy in and input from regulators, First Nations, etc. are very important at the onset. Later, this will also help address some of the social license aspects.
- There is no one group or person that will know all the elements of running a successful pilot ie designing, financing, deploying etc. It takes multiple skill sets and thus the need for multiple partners.
When is the right time to ask to run a pilot?
- There is no right time. Developers need to engage customers early and carry those relationships until its obvious when its time to pilot. Think of it more as one event in a longer-term engagement.
- There are now people available to advise the developers that weren’t available a year ago – find and use them. They may be able to save you time later by asking the right questions today.
- Developers/investors: what is your market and why do you think you can do it better? What’s your value proposition?
- Not all tech providers have deep pockets. Funders like SDTC, CCEMC do help de-risk the pilot and fund the developers.
- If you have a good idea, you can get funding and move things along without spending a lot of money. But oil sands technologies have a huge gap between what’s technically validated and what’s commercially viable. So do not underestimate the significant amount of money and time is needed on the overall commercialization process.
- Getting the interest of large companies can be challenging. This is often due to disruptive technologies that require a customer to do a complete pivot from what they may have already spent decades on – try and select your target customers through what they have already been doing and how you can help them do it better.
Remember, a good pilot doesn’t replace a strong value proposition! You need to put good business in place first.