The InnovationCommercialization Process

1

The Innovation/Commercialization Process
Federal Context
Presentation to Ocean Energy in Canada Pathways
to Commercialization Workshop Vancouver, B.C.
March 21st, 2005
Presented by Wayne Richardson, P.Eng. Director,
TEAM Operations Office
2
The Innovation/Commercialization Process
Government
Policy Programme Interventions
Product/Technology Push
Basic
Applied
Demonstration
Pre
Niche Market
Fully
Idea
RD
RD
Commercial
Supported
Commercial
Commercial
Cost per unit
Market expansion
Technology Chasms/ Valley of Death
Market engagement
Strategic deployment
Barrier
programmes
policies
removal
Consumers
Market Pull
Investments
Business and finance community
3
The Innovation/Commercialization Process
Government
Policy Programme Interventions
Product/Technology Push
Basic
Applied
Demonstration
Pre
Niche Market
Fully
Idea
RD
RD
Commercial
Supported
Commercial
Market expansion
TEAM
Commercial
Cost per unit
Technology Chasms/ Valley of Death
Market engagement
Strategic deployment
Barrier
programmes
policies
removal
Consumers
Market Pull
Investments
Business and finance community
4
TECHNOLOGY INNOVATION COMMERCIALIZATION PROCESS
Canadian Federal Funding Context
DEAL FLOW
COMMERCIALIZATION
INNOVATION
TEAM
Federal University Granting Councils
SDTC
SRED Tax Credit
FCM
PERD
BDC
IRAP
EDC
TPC
Incentive programs REDI, WPPI,RPPI
5
TECHNOLOGY INNOVATION CHAIN S-CURVE example 1
- bioethanol - Iogen

2004 FIRST COMMERCIAL DELIVERIES
1974 IOGEN FOUNDER INITIATES RD
EARLY 1990S NRCan,AAFC,EC RD (further pilot)
2002 SHELL INTL 46M
TECHNOLOGY MATURITY AND/OR INVESTMENT
EARLY 1980S IOGEN CORP ESTD FIRST PILOT
2002 TEAM 1.9M, NRCAN, AAFC 5.5M PROJECT

1985 NRCan ENZYME BIOENERGY RD
MID 1980S 2.3M NRCan IERD INVESTMENT
1997/98 TEAM 5M, TPC 5M, PETROCAN 15M IN
40M DEMO
TIME 2010
1974
FUNDAMENTAL RD
APPLIED RD
COMMERCIAL ACCEPTANCE APPLICATION
6
TECHNOLOGY INNOVATION CHAIN S-CURVE example
2a NG H2 Storage Tanks - Dynetek

GLOBAL NG TANK SALES FOR BUSES CARS
1995 DyneCell NG TANK TO MARKET
1991 SMALL GROUP OF PRIVATE INVESTORS
TECHNOLOGY MATURITY AND/OR INVESTMENT

1993 INITIAL 100K 150K FEDERAL RD INVESTMENTS
TIME 1996
1991
FUNDAMENTAL RD
APPLIED RD
COMMERCIAL ACCEPTANCE APPLICATION
7
TECHNOLOGY INNOVATION CHAIN S-CURVE Example
2b NG H2 Storage Tanks - Dynetek

2000 GLOBAL SALES OF 3600 5000 psi H2 TANKS
2001 2.2M PRIVATE
TECHNOLOGY MATURITY AND/OR INVESTMENT
2001 NRCan 450K 10000psi H2 DEMO
1999 NEW FACILITY
2000 40M IPO

1996 TO 1999 INITIAL 179K NRCan H2 RD
INVESTMENTS
1999 TEAM/NRCan 630K 5000psi H2 1.1M DEMO
2000 7.7M PRIVATE
TIME 2010
1996
FUNDAMENTAL RD
APPLIED RD
COMMERCIAL ACCEPTANCE APPLICATION
8

Overview of Climate Change Technology Early
Action Measures (TEAM)
Presentation to Ocean Energy in Canada Pathways
to Commercialization Workshop Vancouver, B.C.
March 21st, 2005
Presented by Wayne Richardson, P.Eng. Director,
TEAM Operations Office
9
TEAMs Mission
Technology late stage development and first
demonstration in support of early action to
reduce GHG emissions, nationally and
internationally, while sustaining economic and
social development.
10
TEAM Activity Summary

• 101 projects completed or allocated to date from
  Phases I II (1998-2004)
• total value of 971M
• Based on 95M TEAM 101M federal programmes
  775M mostly private plus other governments
• Phase III funds (2004-2008)
• 6 projects allocated 8.5M, total project
  value 24M
• 326 companies, 46 federal agencies, 49 other
  government agencies
• Partners in 59 Canadian cities, 15 countries

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What is TEAM?

• TEAM structures climate change technology deals
  from anywhere, anytime
• TEAM works across all federal departments
• enables commercialization where when
  appropriate
• TEAM adds value to SMEs
• advises consults on business planning, project
  development, RD planning
• identifies resources for technical financial
  support
• TEAM adds value for financial investors for
  large users

12
Demonstration Performance and Results

• Most companies are not adequately prepared to
  assess the GHG impacts of their own technologies,
  processes, facilities, etc.
• Created SMART to meet TEAM requirements, since no
  reasonable off the shelf protocols existed
• Presently, SMART is a platform for national and
  international consistency, including basis for
  emerging ISO standard on climate change projects

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System of Measurement and Reporting for
Technologies (SMART)

• Protocol specifying general requirements
  guidance to develop and evaluate technical GHG
  documentation for technology projects
• Bottom up, systems approach
• Verifiable not verified, no credits
• Costs are relatively low (less than
  25k/project), paid for by TEAM
• Framework for managing entire project

14
SMART Process

• One of most rigorous GHG qualification processes
  in the world
• Measurement plan in place prior to project start

TEAM Project Proponent
TEAM Office
3rd Party Leader
Environment / Auditing Expert
Technical Expert
GHG Project Expert
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SMART metrics
GHG Emissions
Unit of Activity

• GHG Intensity (e.g. clean energy, energy
  efficiency)

Activity (e.g. kWh, units of production, km
travelled, etc.)
Can be aggregated, annualized, adapted, used for
project or future commercial outputs
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Why SMART?

• Accountability TEAM required to demonstrate
  gt100M invested has real technologies/results
• Credibility Confidence that GHG and other
  performance claims are robust and meaningful
• Other Benefits
• Build capacity to improve verifiability in GHG
  markets
• Applicable for all environmental parameters not
  just GHG
• Tool for follow-on investment, sales, market
  advantage

17
Closing Comments

• Commercialization happens in private companies,
  not governments or universities
• TEAM success is based on health of government
  RD, university RD, private RD and investment
  community
• Its not about just handing out money its the
  capacity competency to invest wisely with
  value-added advice credibility