Innovation in UK Energy Technologies

David Sanders, 9 October 2014

An introduction to the Carbon Trust’s innovation activities

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The Carbon Trust - Our mission is to accelerate the move to a sustainable, low carbon economy

Created in 2001 by the UK government; now a fully independent private company

We are an independent, expert partner of leading organisations internationally- We help develop and deploy low carbon technologies and solutions, from

energy efficiency to renewable power- We advise businesses, governments and the public sector- We measure and certify environmental footprints

Team of 180 experts including scientists, entrepreneurs, financiers, consultants, policy specialists, and project managers

Offices in the UK, Beijing and Mexico. Particularly active in the EU, Japan, South Korea, China, South Africa, Mexico and Brazil

Our innovation activities uniquely combine technical, commercial and public sector expertise in energy and resource efficiency

Carbon Trust

Innovation

1. Innovators Run an incubator Create start-ups Make direct investments

3. Industry Run joint industry projects

with corporates and universities to solve technical challenges

4. Corporates Support strategy

development and execution

2. Government Design and implement

innovation policy Run tech development and

demonstration programmes

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Since 2001, we have invested around £60m in innovative cleantech companies

Created our own businesses, invested in 26 technology businesses

Today we have 15 active investments and joint ventures

We identify, incubate and invest in early stage companies to fast track their commercialisation

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Supported more than 300 low carbon technologies and projects

Support is customised to address gaps in the venture in 3 core areas:- commercial advice- networking support - tech development funding

16 energy technology companies in our incubator today

Business Incubation Venture Capital

1. Innovators

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We supported Artemis when it was a start-up, prior to its acquisition by Mitsubishi Heavy Industries

Artemis started out developing hydraulic transmission system for automotive applications at University of Edinburgh

We worked with Artemis to identify a quicker, lower risk route to market in stationary applications (wind power)

Carbon Trust support helped to develop the product for the wind market

Acquired by Mitsubishi Heavy Industries in November 2010

“The Carbon Trust really helped to show that we as a company and our technology are credible … The projects made us focus and set clear milestones to report against … The Carbon Trust is very important to a small early stage company, particularly considering the risks associated with introducing a new technology into wind turbines”

Win RampenManaging Director, Artemis

Innovators Example: Artemis

Source: Artemis

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AmantysBringing electrical power switching technology to market

Opportunity Established by former ARM executives in 2010 building

on world leading research at Cambridge University Innovative power switching technology enabling efficient

switching between medium and high voltages

Carbon Trust support Market analysis and marketing collateral Independent validation of key technical claims Created a compelling presentation to investors and

targeted suitable investor groups

Outcomes $7m investment in July 2011 from Moonray Investors

and ARM and a further $8m in November 2012 Successful launch of multiple disruptive products into the

power switching market Member of Global Cleantech 100 in 2012 and 2013

“We have specified a package of work which has greatly helped us to refine our story and put us into contact with companies who are working in the field”

Bryn ParryManaging Director of Amantys

Innovators Example: Amantys

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Heliex PowerNovel rotary screw expander for waste heat recovery

Opportunity An estimated 40,000GWh of energy is lost in the form of

waste steam worldwide Heliex Power’s innovative steam screw expander

technology, developed at City University London, converts this waste heat into electricity

Needed to accelerate product development and raise significant funding to support commercialisation

Carbon Trust support IP review and strategy Risk analysis and business planning Helped secure corporate investment

Outcomes Raised £2m from BP in late 2010 and subsequently £5m

in a round led by ESB Novusmodus in 2012 Opened the Heliex Test Facility based at the Energy

Technology Centre, Scottish Technology Park

"We prepared the business proposal to enter the Carbon Trust incubator, and we hit that important target… A few months later we secured a large investment in the project from a corporate investor!“

Marco IezziChief Technical Officer of Heliex Power

Innovators Example: Heliex

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“The Carbon Trust is not just about money; it’s about skills, it’s about connections. Working with the Carbon Trust is a very valuable to us in terms of credibility as a small company”

Simon HombersleyBusiness Development Director, Lontra

“It would have been difficult to do this without the Carbon Trust. A new technology like this is hard to sell to people before it reaches a level where it has proved itself. That’s where The Carbon Trust came in to develop the initial idea to a functioning prototype”

Clive HudsonChief Development Engineer, Lontra

LontraDelivering step change improvements in wastewater aeration

Opportunity Roughly 10% of electricity consumption in Europe is used

to compress air Lontra's Blade Compressor increases energy efficiency of

air compression by around 20%

Carbon Trust support Provided funding to prove concept and demonstrate

their energy efficient compressor at scale Advised on fundraising and paid for interim management

to build customer traction Provided PR and awareness raising support

Outcomes Partnership with Severn Trent Water to demonstrate

Blade Compressor technology at scale and initial orders for 10 units

Secured global license deal from Sulzer, a major compressor manufacturer

Innovators Example: Lontra

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We engage governments and funding bodies around the world to realise entrepreneurial approaches

The Carbon Trust supports development of UK low carbon innovation strategy to co-ordinate and guide future public sector funding across low carbon technologies

Develop policy solutions for the governments of China, South Korea, Mexico, Brazil and South Africa. Delivered projects for the World Bank and International Climate Fund

2. Governments

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We manage many projects which support collaborative technology development

3. Joint industry projects

Project Example Description

Offshore Wind Accelerator A £60m project, with 9 major developers, that leverages government funding to reduce cost of offshore wind

Marine Renewables Commercialisation Fund

Part of our £50m marine energy innovation programme working with Scottish Government, DECC and Industry

Polymer Fuel Cells Challenge A 5 year, £7m programme targeting a >30% reduction in automotive fuel cell costs

Industrial Energy Efficiency Accelerator

A £15m programme to maximise sector deployment of innovations in targeted sectors

Advanced Biofuels Challenge Large-scale R&D programme with current focus on proving the viability of pyrolysis-based drop-in biofuels

Grid-Scale Energy Storage Project currently being set up together with 5 European wind developers

We have also run similar research accelerators and technology demonstration projects in other areas of energy and resource efficiency including micro CHP, advanced metering, next generation PV and buildings energy efficiency

Offshore Wind Accelerator

Offshore Wind AcceleratorObjective: Reduce cost of energy by 10% in time for Round 3

Joint industry project involving 9 developers + Carbon Trust

Only developers are members– Aligned interests– Commercially-focused– Preferential access to new

technology

£45-60m programme (7.8b – 10b yen)– 2/3 industry, 1/3 public

(government)

Focus on overcoming near-term technical challenges72% (31GW) of licensed

capacity in UK waters

Example: Offshore Wind

Offshore Wind Accelerator (OWA) focuses targets areas where it can have the largest impactAccess systems, cable installation, electrical, foundations, wakes, environment

Source: Navigant (offshore)

Levelised Cost of Energy Breakdown

Focusing on everything but the turbine, representing roughly 70% of offshore wind costs

Cost

Example: Offshore Wind

Image: Universal Foundation 2013, Mainstream Renewable Power 2011

Foundation CompetitionObjective: Reduce lifecycle costs by 30% in 30-60m depths

Competition for novel foundations in 2009- 104 entries- 7 shortlisted- 4 finalists- 2 demonstrated with

met masts

Next step- £18m fund to

incentivise demonstration of three novel foundations with turbines

Universal Foundation- Dogger Bank 2013,

150km offshore, 25m depth

Keystone ‘twisted jacket’- Hornsea 2011,

100km, 30m

Foundations

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We work with corporates providing a range of services to meet their innovation needs

SELECTED EXAMPLES Set up an incubator and identified

innovative companies across Europe Set up and ran competitions, pilots and

technology demonstrations Supported development of resource-

efficient product design innovations Implemented supply chain engagement

and collaborative procurement processes Innovation partner for large corporates

DeliveryStrategy

SELECTED EXAMPLES Assessed and prioritised opportunities in

low carbon technologies Developed options for low carbon market

entry strategies Strategies and business cases for

operational resource efficiency and low-carbon growth

Developed strategies to address supply chain risks

4. Corporate customers

Our partnership with General Electric leveraged complementary strengths of start-ups and corporates

3,500Start-ups assessed

€130mInvested within a year of our support

13 to 1Private investment leveraged

$5m GE-CT Partnership1

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› We launched $5 million pilot partnership with General Electric to find, assess and incubate start-ups across Europe in infrastructure application areas1 in 2012

› Partnership launched at a time when low carbon technology start-ups in Europe are finding it increasingly difficult to raise early stage funding

› Incubation partnership has potential to accelerate development and deployment of novel low carbon technologies by leveraging complementary strengths of start-ups and corporates

Sources: 1 http://www.gereports.com/carbon-trust-and-ge-partner-to-pump-up-europes-clean-tech-sector/

Example: GE

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Thank You!