Drones Clearing a Path for Innovation

How America's largest energy company leveraged their proprietary gifts and cutting-edge drone technology to stand up a new startup in the asset inspection space.

The Challenge the challenge

In the last two decades, Exelon has become the United States’ largest operator of nuclear power plants, its largest regulated utility, and its largest electric company by revenue. Yet in 2010, Exelon faced a curveball with an unexpected natural gas boom. This posed a very real threat to the company that relied on nuclear power to make up 60% of its energy. With no corporate innovation group and a new outside force that threw their business off-balance, the company could have doubled down on routine and shied away from any risky changes. Instead, Exelon leadership chose to ignite a growth revolution and transform the traditional utility corporation into an energy company that is truly leading the way.

The Experiment the experiment

Following a discovery phase, designed to identify opportunity areas and enabling technology trends, the team landed on asset inspection. They looked into wind turbine inspection and solar farms, but the competition was fierce, and Exelon had no particular specialty in either space. So, they returned to the company’s proprietary gifts: experience with drone asset inspection, a capability to automate drone flight scripts, and its brand, scale, and reputation as a leading electric utility. If they could combine these gifts, they could hit gold.

The team had learned that flight regulations for drones are toughest in suburban and urban areas, which are densely populated. However, in rural areas, if an owner of a privately held asset gives a company permission to inspect assets with drones, the flight regulations are far less strict.

Electricity in rural areas is usually provided by member-owned electric co-ops, which are required to inspect their system on 5-8 year cycles in order to ensure reliability. The problem is that asset inspection is an expensive, labor-intensive effort that takes a lot of time and can be dangerous. On paper, drones are a great solution to these problems. But rural co-ops don't have the money or personnel to develop in-house drone capabilities and the existing drone asset inspection startups at the time were not able to deliver a solution tailored to the utilities' needs.

The Solution the solution

Exelon Clearsight was born out of Exelon's relationship with Bionic. The team believed that these problems were real and acute and that they could deliver a better solution than was currently in-market, but it needed to validate these hypotheses. It attended a trade show with rural co-ops, which oversee over 80% of the power distribution in the US. Without a demo, an incorporated business, or even evidence their solution would work, Exelon Clearsight collected almost one hundred business cards from excited co-op reps at the show.

To pilot its solution Exelon Clearsight signed-up two small companies in rural areas: one in North Carolina, and one in Indiana.

Drone asset inspection of distribution lines has historically been a challenge due to the unique flight path needed to inspect the lines. So Exelon Clearsight developed automated flight scripts, based on its proprietary drone asset inspection experience, which would allow the drones to track distribution lines automatically by adjusting the drone’s perspective for each pole, photographing from each angle, re-calibrating, and repeating all angles for each pole. The number of people required to inspect the assets would drop to just two. The Exelon Clearsight team then conducted a demo with one of its customized drones. The buyer loved it. After their proof of concept solidified into a letter of intent, the team did another demo. And then another.

At Exelon’s next Growth Board, where teams pitch their solution concepts to a Venture Capital-style board of internal corporate executives, Exelon Clearsight presented its findings, its business model, and its pipeline of prospective clients. Before the team finished their presentation, the Growth Board had granted $5.8 million to fund the startup for the next 18 months. And when Exelon Clearsight launched, it had spent under $1.5 million in slightly over a year -- a fraction of the $118 million in VC funding that Airware, another drone asset-inspection startup, burned through in its 7 year-run before shutting down in 2018.

The Insight the insight

Exelon's proprietary gifts are many. Its reach is vast. Its financial wells are deep. But Exelon Clearsight didn't take off because of these assets, which many other corporations also have; Exelon Clearsight is soaring because Exelon leadership decided that new growth was their only option and they set wide-open permissions for teams to go after it.

Just as important: the team was laser-focused on validated customer needs and Exelon's proprietary gifts to meet those needs. Exelon Clearsight is just one example of Exelon's commitment to and investment in growth. We can't wait to see what they build next.


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