Exelon Aerolabs

Exelon Aerolabs

AeroLabs was born out of Exelon’s partnership with Bionic. Following a discovery phase, designed to identify opportunity areas and enabling technology trends, the team made up of Exelon employees and a Bionic entrepreneur landed on drone and artificial intelligence enabled asset inspection as a potential growth area.

In the last two decades, Exelon has become America’s largest operator of nuclear power plants, its largest regulated utility, and its largest electric company by revenue. Exelon operates in 48 states, in the District of Columbia, and in Canada. It employs 34,000 people and generates revenues of more than $33 billion annually.

Yet in 2010, Exelon faced a business curveball—an unexpected natural gas boom. This posed a very real threat to a company that relied on nuclear power to make up 60% of its energy. With a new outside force throwing their business off-balance, the company could have doubled-down on routine and shied away from any risky changes. Instead, Exelon leadership chose to invest in a corporate innovation initiative to ignite a growth revolution and transform the traditional utility corporation into an energy company that is truly leading the way. Recognizing Bionic’s extensive innovation experience, Exelon brought Bionic on to support its new direction.

Research Fuels Innovation
AeroLabs was born out of Exelon’s partnership with Bionic. Following a discovery phase, designed to identify opportunity areas and enabling technology trends, the team made up of Exelon employees and a Bionic entrepreneur landed on drone and artificial intelligence enabled asset inspection as a potential growth area.

The team spent six months looking into wind turbine inspection and solar farms, but the competition was fierce. So they returned to focus upon Exelon’s proprietary gifts: experience with drone asset inspection, knowledge of traditional energy assets, 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 strike gold.

The team had learned that flight regulations for drones are toughest in suburban and urban areas, which are densely populated and closer to airports with controlled airspace. 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 collectively own and manage over 5 million miles of power distribution lines in the United States. These co-ops are typically required to inspect their system on 3- to 8-year cycles in order to ensure reliability and safety. The challenge is that asset inspection can be expensive and time and labor intensive, often posing unnecessary risks to those doing the inspections. On paper, drones are a great solution to these problems—but rural co-ops rarely budget for the money or personnel required to develop in-house drone capabilities. In 2010, existing drone asset inspection startups were not able to deliver a comprehensive solution tailored to the utilities’ needs.

The AeroLabs team concluded 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. The team attended a trade show that was also attended by rural co-ops, where, even without a demo, an incorporated business, or clear evidence their proposed solution would work, AeroLabs collected almost 100 business cards from excited co-op representatives at the show.

To pilot its solution, AeroLabs signed up two of the Co-ops from the conference: one in North Carolina, and one in Indiana.

High Flying, with High Efficiency
Drone asset inspection of distribution lines has historically been a challenge due to the unique flight path needed to inspect the lines, which are often obscured by tall vegetation and other overhead obstructions that are nearly impossible to account for when relying on maps and GIS data for perspective.
To address these challenges, AeroLabs developed automated flight scripts, based on its proprietary drone asset inspection experience, which would allow the drones to fly autonomously at a safe distance from the lines, adjusting the drone’s perspective for each pole, photographing the equipment from multiple angles, recalibrating, and repeating this process from all angles for each pole. Using this technique, AeroLabs was able to inspect five times the number of poles per day than a traditional inspection crew and capture significantly more data to extract key insights that may have otherwise been missed.
The AeroLabs team then conducted a demonstration for another potential customer using one of its customized drones. The buyer loved it. After their proof of concept solidified into a letter of intent, the team performed another demo, followed by another.
At Exelon’s next Growth Board, where teams pitch their proposed concepts to a Venture Capital-style board of internal corporate executives, AeroLabs 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. (When AeroLabs 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, spent in its seven-year run before shutting down in 2018.)
Exelon’s proprietary gifts are many. Its reach is vast. Its financial wells are deep. But AeroLabs didn’t take flight because of these assets, which many other corporations possess; AeroLabs is soaring because Exelon leadership decided that the investment was worth it 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. AeroLabs is just one example of Exelon’s commitment to and investment in growth. At Bionic, we can’t wait to see what they build next.
Learn more about AeroLabs and drone use in asset management at www.exelonaerolabs.com.
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