By Lisa Lambert, Chief Technology and Innovation Officer, National Grid Founder and President, National Grid Partners

Like it or not, the energy business is changing. Regulators are limiting how much fossil fuel utilities can use to generate electricity – and politicians, environmental activists, and many of our customers are cheering them on. If the United States rejoins the Paris Climate Agreement, you can expect this trend to gain speed.

Meanwhile, new companies are looking to get into the energy game. They’re developing wind farms, building out EV charging stations and installing solar panels across the U.S. Even at this early stage of the game, there’s already enough solar energy in the country to power Hawaii and have plenty to spare.

National Grid’s been in this industry for decades, but we saw the disruption coming. It’s why we formed National Grid Partners to invest in everything from renewable technology to battery-based storage systems – as well as in artificial intelligence and cybersecurity to make our operations even more efficient and secure.

Yet one investment may carry the greatest potential: An investment in collaboration.

There are over 150 utilities worldwide, and as regulated monopolies, we don’t compete in the same markets. So there’s no downside to working with one another to exchange ideas, partner on projects or share best practices amid all this change.

That’s why we formed the NextGrid Alliance (NGA), a consortium of some of the world’s most forward-looking energy companies. The group held its inaugural meeting in September and has been heads-down since then on issues like keeping power grids safe from hackers and infusing innovation into companies that – let’s face it – have up to now been incentivized to be reliable, not ground-breaking.

Change…Or Be Told To Change

Imagine you work for a company that sells furniture, or digital cameras, or home appliances. Everything you do is generally in response to a change in the market: People want bigger desks, smaller cameras, or refrigerators coated in bamboo instead of stainless steel.

Energy is different. We don’t have to compete with anyone in our service-delivery areas, but we can be told what to do. Regulators examine all parts of our operations, from how much we charge to how often we trim the trees next to our power lines. And if they don’t like what we’re doing, they’ll order us to change.

Today, regulators are focused on using less coal, oil, and natural gas to generate electricity. “Our investment thesis is driven by a carbon-neutral future,” Guillaume Lesueur of EDF, the French utility giant, told the NGA members at our inaugural meeting.

He’s not the only one. The Partnership for Global Accounting Financials, which includes banking heavy hitters like Barclays, Citibank, and Morgan Stanley, recently met to agree on ways to measure the carbon-related risk of a loan. The more carbon risk, the more heavily lenders will scrutinize it. That gives a built-in edge to clean-energy investments.

What Change Looks Like Today

Some of the infrastructure investments National Grid is making require that we go well outside our traditional activities. After 22 years in venture capital, I know you can’t succeed in a disrupted market by doing only the things you used to do. You must make targeted investments, including those in startup companies, to test ideas and explore new possibilities.

“One of the things I love about startups is you have no time to waste,” Badar Khan, President of National Grid US, said at the NGA kickoff. “You have to be laser-focused on solving a problem, or you run out of money.”

Since NGP’s launch in November 2018, we’ve invested in 21 companies and three specialty venture firms. It’s new territory for a regulated company like ours.

That’s why our conversations with the 30-plus utilities of the NextGrid Alliance really matter. We can share our experiences without giving away a competitive advantage, and we learn more than we could by ourselves.

As Badar puts it: “In a world with so much uncertainty, going alone comes with a lot of risk.”

The NGA members come in all shapes and sizes, but they’re just as entrepreneurial as we are. Consider Duke Energy, which serves 7.4 million retail customers and has made investments in solar, wind, battery storage and cutting-edge operations technology. Or the much smaller Avista Utilities, which serves 340,000 customers in Spokane, WA – and is funding open-source software for utility operations and exploring ways to offer broadband Internet over its existing infrastructure.

“We are investing to map a new future,” Ed Schlect, Avista’s chief strategy officer, told his fellow NGA members. I couldn’t have said it better.

In coming months, I’ll be back to tell you more about the NextGrid Alliance and the problems its members have been tackling collectively. We expect to announce big news this summer and to host our first-ever NGA Summit in the U.K. as part of COP-26, the United Nations’ climate change conference.

For now, let me leave you with a promise: We will change with the times – and we will thrive.