Tech guru shines a light on the energy century

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gpitts@globeandmail.com

At 73, John MacDonald is one of Canada's technology heroes, an engineer who co-founded West Coast space technology champion MacDonald Dettwiler and Associates Ltd. So what does the builder of a Canadian tech icon do when he retires? He helps form another technology hopeful, Day4 Energy Inc., a maker of solar energy modules . Why Day4? The Bible's Book of Genesis says that on day four, God created light.

You come to the environmental issue from a space satellite perspective, as someone who has seen the Earth change from afar.

That's correct. I spent 30 years of my life leading the development of technology to process images from space. I spent those 30 years watching the planet change. You see what was happening - you see the ice decreasing, you see desertification happening, you see the vegetation changing and you see the cities expanding.

So after I had quote-unquote retired, and the opportunity came along to work in renewable energy, I decided to do it.

You've said this is the energy century.

It is. The energy business and the technology behind it will be the major thing that happens in human civilization in the 21st century. We will change our energy system. We will be forced to change it. It will be kind of like the automotive industry was to the 20th century - the major industry in the world. Energy is already a major industry, but it is going to undergo a fundamental change.

What is that change?

We're going to have to start extracting energy from our surroundings, rather than harvesting fossil fuel from all sorts of places in the world. It is getting more and more difficult and expensive all the time, and we must start using renewables as the core of our energy system.

Many people don't grasp the change in the infrastructure that will be required to make that all work. While the problems are quite solvable, the change is major - it is going to take time, it is going to take money. But by the middle of this century, I think our energy system will be dominated by renewables.

What percentage will be solar?

It depends on who you believe. Solar is the ultimate renewable energy. The German advisory council on climate change holds the view that by 2100, solar will be about 70 per cent of the energy supply. Today, it is minuscule.

At this point, the capital costs of solar systems, while coming down, are still quite expensive compared with current energy sources. This is where the auto industry was at the latter part of the 19th century.

Has anyone said that in making these statements, you are just promoting your company's stock?

That's not the way I look at it. Maybe I am and maybe I'm not. That's not something I think about. What I am doing is painting a picture of a vision I believe will come to pass. I went into renewable energy at an age when most people are retired because I thought it was something important to do.

Isn't this Russian technology?

My co-founder at Day4 is Leonid Rubin, who was professor of physics at Moscow State University, the top science and technology university in Russia. Leonid solved the problem of doing a direct connection to a photovoltaic cell with a system of wires. This is something many people tried but had never solved. Leonid figured out how to solve it.

In my retirement phase, I spent two days in Moscow with Leonid, visiting companies and government labs. It was a like drinking from a technological fire hose. We were sitting in a little coffee house behind the Bolshoi, when he said, "Of all the things you've seen, which one could you build a business around in Canada?" I said, "It's obvious - it's your solar energy project." This was what he was doing in his kitchen, or some place like that. A month later, we came to Vancouver and incorporated the company.

Do we do enough research in Canada?

Canada does relatively well. Remember, we're a small economy. The strength in Canadian science and technology is in the engineering field. I used to say Canadians were among the best engineers in the world. A long time ago I removed the word "among." We are in my opinion the best engineers in the world.

We have great engineers but why can't we build global technology companies?

From an engineering or scientific standpoint, we are among the most creative people. If you look for the beginnings of various technologies, very often you find them in Canada. But we are terrible at exploiting this advantage. We invent these great things, starting with the telephone and a whole list of things. But as for our ability to exploit that advantage economically, we are still colonials, I guess, in our heads.

In fact, last year Ottawa overruled the sale of MDA's space division to a U.S. firm.

I was not there at the time. But we had developed Radarsat-2 and I was heavily involved in development and conception of that spacecraft. Certainly on the civilian side, it was by far the most advanced imaging radar in orbit.

To build that spacecraft, we had assembled a world-class gang of engineering talent. We got the most advanced [imaging]product out of that. We were so proud but the space agency in Canada had gone to sleep - it wasn't doing anything significant. MDA had this unbelievable world class team of engineers but what were they going to do? Were we just going to let this thing fall apart and they go their separate ways?

Well, the other market for that sophisticated product was the U.S. intelligence market. To gain access to that market, the business had to be American-owned. They were planning to keep the crew in Canada, and they worked out a deal with Alliant Techsystems [of Minneapolis, Minn.] The fact is the guys at MDA didn't really want to do this, but what else could they do?

That deal got killed by the government and of course that woke up the Canadian Space Agency. The agency now has a guy [president Steve MacLean]with a vision of where it should go. And everything's fine now. But it had to have that kind of stimulus to wake itself up.

Was it just government lethargy that forced your MDA successors into this proposed sale?

I think also that our economy has traditionally been natural-resource-based. We're commodity sellers and that's the mentality. People who control the money, the politics etc., don't see knowledge-based industry as being as vital to a modern economy as you and I do.

Should we let Nortel go, or stop the sale as Ottawa did with MDA?

I don't want to get into that discussion, but it's unfortunate. Nortel is just the latest one; it happens over and over again. The first [passenger]jet aircraft flew in Canada, and there was, of course, the famous Avro Arrow. It's cultural. We don't see advanced technology as the economic engine that we see in the resource industries.

Also, remember in the 1990s, MDA got to the stage where it was time for some of the original shareholders to liquidate their holding and move on. My own attitude then was I wasn't in that category - I was still having fun doings things.

But the question you get into in Canada is: Is there a company in Canada capable of buying something like MDA and making a go of it? The answer is no. MDA has now got to the stage itself that it might be able to do that kind of thing. But back in 1995, when we first sold MDA to a U.S. buyer, there was nothing in Canada that could take that.

What the hell is the resource industry going to do with a space company? They have a lot of the money. The communications industry, such as Bell Canada, is not at the technological level to have any idea what they should do with it.

So an American space company decided to buy MDA. It later came back to Canada because it became clear that the U.S. buyer was going to get into [financial]trouble. So Canadian shareholders bought it back when things went wrong south of the border.

John MacDonald

TITLE Chairman and CEO, Day4 Energy Inc., Burnaby, B.C.

Born Aug. 13, 1936, in Prince Rupert, B.C.

Education

1964: PhD in electrical engineering, Massachusetts Institute of Technology

1961: Master of science, MIT

1959: Bachelor of science, University of British Columbia

Career highlights:

For 12 years, a faculty member in engineering at UBC and MIT

With Vern Dettwiler, co-founded MacDonald Dettwiler and Associates Ltd. in 1969.

President and CEO for 13 years and chairman for another 16 years until his retirement from MDA in 1998.

Co-founded Day4 Energy in 2001.