An investor perspective on fuel cells: past and future · 2019-02-25 · An investor perspective on...
Transcript of An investor perspective on fuel cells: past and future · 2019-02-25 · An investor perspective on...
An investor perspective on fuel cells: past and futureDr Robert Trezona, Head of Cleantech, IP Group
1.Who we are
2.History
3.Sector thesis
4.Priorities for the (UK) sector
Agenda
IP Group is a patient capital investor in “deep technology”
Technology from universities, initially UK, now international
20012014 2016
68
39 39 38 37 3631 31 30
27 25 2320
18 17 17
UK cleantech venture investment totals by investor, 2012-2017 [£m]
Sources: Cleantech Group i3 database; IP Group analysisNote: ticket sizes estimated from overall round size where not published
IP Group is the leading investor in UK cleantech companies
• Invest between £100k and £10m
• 20 companies in current Cleantech portfolio
• Includes 20% stake in Ceres Power
Our team has worked with a number of UK fuel cell/H2companies
Current investments
1.Who we are
2.History
3.Sector thesis
4.Priorities for the (UK) sector
Agenda
Referencing: the Gartner Hype Cycle
Sources: Fuel Cell Today, E4Tech
2000 2018
1998
$750m
Ballard
2004
ITM IPO
2004
Ceres IPO
2005
Voller Energy
IPO
2005
CMR IPO
2006
Oxford
Catalysts IPO
2007
AFC Energy
IPOFinancial
crisis
2009
Steven Chu
“Four
miracles”
2010
Tesla
IPO
2010
Solar below
$1/Watt
2011
Bloom 200 kW
Energy Server
2011
Stationary
market doubles
2012
POSCO Fuel
Cell Energy
deal
2013 Ene-
Farm hits
100,000 units
2015
Mirai
launch
2016
h21
Leeds
2017
Plug Power
Amazon
2018
Weichai: Ceres
& Ballard
2018
Nicola 800 order
Anheuser-Busch
Fuel cells have come through the complete investment “hype cycle”
Referencing: the Gartner Hype Cycle
Sources: Fuel Cell Today, E4Tech
Hype stage
X Pre-revenue IPOs
X Hardware tech ignorance
X Lack of markets
X Small volumes, high costs
X Limited environmental action
Realism stage
✓ Corporates as funders
✓ Realism on timescales
✓ Market pull
✓ Product sales learning curve
✓ Urgent action on air quality
We have learned a lot…
US
UK
…but the sector is still not offering great returns
Average return over 5 years: -13%
Bloom Energy
-29% since
July IPO
Market cap down by $460m
1.Who we are
2.History
3.Sector thesis
4.Priorities for the (UK) sector
Agenda
1) Air quality concerns are the catalyst
2) Batteries cannot do it all
3) Hydrogen will be essential to displace fossil hydrocarbons
4) Cheap renewable electrons unlock an electrochemistry revolution
5) Electrochemistry talent and technology in universities and IP companies
6) Corporates can partner with technology providers to achieve scale
Our investment thesis for the sector
1) Air quality concerns are the catalyst
$10 billion settlement in the US alone
Paris gasoline and diesel ban from 2030
Oxford zero emissions zone from 2020
Shenzhen all 16,000 buses electric
The post-combustion age is coming
• 800 kWh
• 6000 kg
• 30 min charge = 1.6 MW
• 2500 A (!)
• Degrade $152,000 asset
• $190 per marginal kWh
• 2x 114 kW FCs + H2 tank
• <2000 kg
• 5 min charge
• Total drivetrain <$100,000
• $12 per marginal kWh
2) Batteries cannot do it all
Source: Tesla press releases, Bloomberg, Toyota
90
90
100
80
420
60
x7$1.7 trn
Trucking + cars
2015 Residential heating
Total2100
Iron + steel
Shipping(NH3)
ETC scenario to 2100Million tonnes
Shell Sky Scenario to 2070Million tonnes
x13$3.2 trn
800
2015 Total2070
Source: Energy Transitions Commission, Mission Possible (2018); Shell Sky Scenarios (2018)
60
3) Hydrogen will be essential to displace fossil hydrocarbons
2018 2018
Others…
4) Cheap renewable electrons unlock an electrochemistry revolution
Onshore wind
3225
0
10
20
30
40
50
60
70
80
90
100
110
2010 2015 2020 2025 2030 2035 2040
Solar PV, Utility scale, LCOE, $/MWh in favourable conditions
1817
0
10
20
30
40
50
2010 2015 2020 2025 2030 2035 2040
Wind (onshore), LCOE, $/MWh in favourable conditions
Utility-scale PV
Source: Lazard (2018); McKinsey; Energy Transitions Commission
Electrolyser-SMR breakeven at 70% efficiency
Electrolyser-SMR breakeven at 70% efficiency
5) Electrochemistry talent and tech in universities & IP companies
Not and exhaustive list. Omissions accidental.
6) Corporates can partner with technology providers to achieve scale
Weichai
Weichai
Broad Ocean ABB Audi
Air Liquide
Amazon Linde
Bosch
Source: E4Tech Fuel Cell Industry Review; Company websites; public market announcements
1.Who we are
2.History
3.Sector thesis
4.Priorities for the (UK) sector
Agenda
Current issues for UK hydrogen and fuel cell commercialisation
Source: E4Tech Fuel Cell Industry Review; Company websites; public market announcements
• Limited domestic market
• Lack of interest from UK government
• Brexit
• Supply chain
• Media and public awareness
Priorities from the investment perspective
Source: E4Tech Fuel Cell Industry Review; Company websites; public market announcements
• Double down on UK science strength
• Development of numerical tools “digital electrochemistry”
• System-level focus on efficiency (not cost)
• Export market: clean fuel and clean transport
• Domestic market: distribute generation on grid (reinforcement)
EPSRC, UKRI
Companies, Universities
• Mission Innovation & Faraday UKRI, BEIS
Companies (Universities)
Cities, corporates
DIT, Asian corporates
Overall summary
corporates
&
technology
export