1

1

Environmental Industries Capital Markets Day

2nd March 2007

2

2

Background

Energetix founded in 1997 and raised private equity funds to create low cost point products for alternative energy markets. Two major opportunities developed with unique characteristics for these markets:

Micro Combined Heat and Power (mCHP) i.e. a domestic boiler that also produces electricity for the home

Uninterruptible Power Supply based on compressed air

Energetix Group listed on AIM August 2006

£5.4M raised net

3

3

Directors

Energetix Group plc

Non Executive Directors Executive Directors

Alan AubreyChairman

Anton ElsborgNon Executive

Adrian HutchingsChief Executive

Rick SmithFinance Director

Bryan Gray MBENon Executive

Bill FortescueCEO Genlec

Andrew HintonMD Pnu Power

What is mCHP?

Micro CHP is a domestic boiler that also produces electricity for the home

How Genlec mCHP works

Boiler unit + Genlec = mCHP

Genlec module

Scroll expander & generator

Fluid pump

Heat exchangers

Refrigeration cycle in reverse

International Patent Protection

1

2

3

4

Low pressure liquid

High pressure liquid

High pressure vapour

Low pressure vapour

Cycle repeats

Scroll expander

Normal boiler unit

Fluid pump

Normal hot water pump

Heat exchanger

Hot water & heating

Electricity

Cold water feed

ORC module

1

2

4

3

Energetix Genlec

•Wall hung

•Looks and performs as a normal boiler

•Consumer friendly

•Installer friendly

•Uses mass manufactured components to reduce costs and support product life – engineered product not “new science”

•Simple assembly production – limited investment in manufacturing plant

•Very favourable cost & operation compared to fuel cells and Sterling engine mCHP

Boiler unit

Energetix Genlec module

mCHP - Comparisons

Genlec Fuel Cells Stirling Engines

HE CondensingBoiler

Wall hung (98% EU market) X

Operates like a boiler X X

Produces Electricity X

Time to Market September 2008 09/10/11/12? Small vol. now Now

Energetix mCHP Competitive Advantages

Reduced consumer, installer, and boiler manufacturer barriers to entry

Works like a boiler

Installed similar to a boiler

Assembled as a boiler plus one additional module

Lowest cost mCHP

Benefits - mCHP

Problems: mCHP addresses the issues:

Peak demand creates negative margin Produces electricity at peak times

High (and increasing) cost of gas Reduces demand

Shortage of gas during winter periods Reduces demand

Wasted cost in transmission and distribution No cost

Requirement for clean energy generation CO2 savings – Government support with 5% VAT

10% Generation Losses

35%energy

available to the home

90%energy

available to the homeHighly Efficient Micro CHP Generation

60% Generation LossesNatural Gas

5% T&D Losses

Inefficient Central Power Generation

Homeowner Benefits

Annualised Saving £150-200

Additional Cost £650

VAT Saving (inc. installation) £200

Payback c.2 to 3 years (cf. condensing boilers 7 years)

Benefits - Genlec

Market

Boiler Market

£8.1bn annual EU boiler market in 2003

1.5m units installed per annum – UK boiler market

mCHP Projected Market

mCHP - Predicted £1.5bn (18.5% boiler market share) annual EU market by 2010 Cambridge Consultants May 2004

mCHP - 540,000 (32% boiler market share) unit sales per annum in UK by 2015 Society of British Gas Installers Mar

Routes to Market

Energetix Genlec - component supplier of ORC modules to boiler partners

Cf. Giannoni HX coil producer c.1M units p/a

Product Launch Target H2 2008

Conclusion

£8.1bn annual EU boiler market in 2003 and predicted £1.5bn annual EU mCHP market 2010

Potential to secure substantial proportion of the EU mCHP market

Simple and robust technology based on proven components

Patent protected

Low production risk - simple component assembly

Production and Supply Channel planning

Target Genlec sales price: £650 (£1,550 integrated mCHP boiler)

Pnu Power

Provides uninterruptible power to protect against power loss

What is UPS & Pnu Power?

Uninterruptible Power Supply (“UPS”)

UPS provides power to enable switch over to backup generator or safe system shutdown

Expected Spend on UPS energy storage forecast at £1.2bn per annum - 2006 source Frost & Sullivan

Incumbent UPS energy storage is lead acid batteries

UPS protects equipment in key markets of telecommunications, data centres, utilities etc.

Pnu Power is a new type of battery for UPS using compressed air

“Power outages estimated to cost US $80bn per annum” Lawrence Berkeley National Laboratory Feb 2005

How Pnu Power works

Compressed air is released to drive a scroll expander

Four main components

Standard compressed air cylinders

Air flow controller

Scroll expander & generator

Exhaust system

International Patent Protection

Cold air

Air cylinders

Scroll

Exhaust

Electricity

Controller

Product - Pnu Power

Current status 20kW - mid range industrial power protection

Full ride through capability

Highly reliable core technology

Low cost additional run time

Uses mass manufactured components to reduce costs and support product life

Sell at equal price to batteries deliver over 50% gross margin to Energetix

Market – Pnu Power

Lead acid battery storage for Uninterruptible Power Supply (UPS) £1.2bn per annum:

Data, Telecommunications, and Broadcasting £913m

Utilities, Oil & Gas Applications £119m

Security & Emergency Lighting £63m

Other Applications £13m

Flywheel and other emergent sources £125m

Source: Frost & Sullivan

2006 2007 2008

Energy storage for UPS £1.23bn £1.26bn £1.33bn

Addressable market size £1.01bn £1.04bn £1.09bn

Market Issues – Pnu Power

Battery Room Explosion

Problems with incumbent VRLA Batteries: Pnu Power addresses the issues:

Short life span Long year life in automotive and A/C applications

Highly unreliable Highly reliable core technology

Require environmental and temperature control Does not require environmental and temperature control

High life cycle costs Major life cycle savings

Cost of disposal Scrap value on disposal

Economics

Life Cycle Cost Comparison – Pnu Power vs Batteries

CumulativeCost £

Pnu Power can deliver up to 70% life cycle savings

10,000

20,000

30,000

40,000

50,000

60,000

70,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Years

£

Pnu Power Batteries

Route to Market

Energetix dual strategy for routes to market, partnering with UPS manufacturers and Mechanical and Electrical Installation contractors

Small Systems up to 50kVA

Energetix to grant limited geographic exclusivity to UPS manufacturers based on “take or pay” contracts to enhance early growth e.g. APC, Powerware, Liebert, MGE, Toshiba, Chloride

Larger Systems above 50kVA

Partner with ME&I contractors as system specifiers and UPS manufacturers

E.g. Bechtel, AMEC, Fleur Daniel, Kellogs Brown & Root, Balfour Beatty

Product Launch Target H2 2007

Conclusion

Current £1.3bn annual world battery for UPS market growing at 5.3% per annum

Pnu Power could take a substantial proportion of the market

If priced the same as batteries

End user life cycle costs saving up to 70%

Energetix a gross margin of over 50%

Simple and robust technology based on proven components

Low technology risk

Low production risk - simple component assembly

International Patent protected

22

22

Substantial MarketsSubstantial Markets• micro CHP market demand• UPS needs battery alternative• Near term revenue

Smart EngineeringSmart Engineering• Low cost products• Fast to market• Protected IP

Component SupplierComponent Supplier• Fits with existing products• Low capital investment• Rapid ramp-up capability

Summary