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29th September 2016
@ Bits & Pretzels: Sir Richard Branson & Kevin Spacey - Take risk for New Energy!
This week the 3rd Bits & Pretzels event took place in Munich. It got bigger, more professional and attracted a greater number of young entrepreneurs since the first gathering in 2014, though keeping its spirit. 5000 visitors participated in workshops, presented their start-ups or listened to the advice of experienced investors or to great motivators like Kevin Spacey and Sir Richard Branson.
You could see that Spacey is not only a great actor but as well an experienced investor in start-ups. He explained founders the importance to tell a good story of their company and to be ready to take risk. Actually, Spacey told an amusing story from his early days as actor on how readiness to take risk sometimes can push your success. He “pocketed” an old lady’s invitation to a cocktail party, to promote himself for a casting for a role with his idol Jack Lemmon. Spacey pointed out that he does not want to encourage anyone to steel but encourage to take risk.
Branson - dressed with tasteful “Lederhosn” and Bavarian cloths - gave an entertaining insight in his exciting and adventures live as an already successful entrepreneur, garnished with his view on politics (US election or refugees in Germany) and advice on how to lead an innovative company. However, from the perspective of storage-markets.com it was central to hear Branson stating the importance of sustainable development and the fight against climate change. But besides this statement (and an e-bike presented) there was not much talk on sustainable energy.
Possibly other events like Ecosummit or Munich Cleantech Conference are the first addresses when it comes to cleantech start-ups in Europe. However, in the future it may suit well to this inspiring Bits & Pretzels event to have as well a cluster for cleantech and future energy solutions. Bit & Pretzels may take some risk but could tell a good story and Sir Richard Branson would probably like it.
10th July 2016
Intersolar/EES 2016 - Part 2: Small ventures at the Intersolar
End of June the 25th Intersolar 2016 took place in Munich and as a part of it the EES, the Electrical Energy Storage fair and conference. This series of posts will share the individual impressions and findings of three busy days mainly in the EES hall besides the five other halls of Intersolar.
In our first post we presented companies of the automotive industry present at the EES with electrical storage solutions, including big companies like Daimler or BMW/SolarWatt. Kreisel is not one of those big ones, but it seems that the young Austrian company from the region of Linz run by the three Kreisel-brothers is on its way to become a technology driver and technology supplier for automotive industry and for home storage systems. See article in German magazine Spiegel.
There had been more even smaller upcoming ventures at the Intersolar and EES fair. Here are the three which caught our especial attention:
· Invenox: The start-up from Munich, a spin-off from the Technical University of Munich, Invenox presented at a small booth in the pavilion of “Bayern Innovativ” its patent-pending CONCHIFERA Technology. Instead of welding contacts of batteries for modules CONCHIFERA is a technology where the 18650 batteries are clamped between two aluminium circuit boards. The boards are supposed to act as well as cooling surface transferring the heat via the poles of the batteries. According to Invenox the advantages are (1) higher energy density and (2) easy cell replacement due to the clamping mechanism, (3) better economics due to simpler production process of the modules and (4) higher lifetime due to the thermal conduction.
· BOS-AG: Even though the Balance of Storage Systems AG (BOS-AG) had only a small booth in the German pavilion it got the big platform as finalist for the EES Award 2016. BOS-AG presented its hybrid storage system, which is a combination of lithium and lead acid batteries. The system combines the low costs of lead acid batteries and the high cycle rate of lithium batteries. The lead acid battery provides the stored energy basis keeping the number of cycles low and the state of charge high while the lithium battery is charged and discharged with higher flexibility and more cycles. Additionally to the hybrid system BOS-AG offers a Lithium add on to existing lead acid batteries, the Lithium Extension battery LE300.
· ferroamp: Another finalist for the EES Award 2016 which got our attention is ferroamp which even was one of the winners. ferroamp won the price for its EnergyHub system. ferroamp offers a package of components which can be combined in the EnergyHub system, consisting of a DC “nanogrid”in which PV, batteries and charger interact. The DC “homegrid” is interacting with the public AC grid by a bi-directional three-phase inverter.
This is the second post about our own impressions from the Intersolar and EES in Munich from 22 nd to 24 th June 2016.
29th June 2016
Intersolar/EES 2016 - Part 1: Automotive Industry at the Intersolar
Last week the 25th Intersolar 2016 took place in Munich and as a part of it the EES, the Electrical Energy Storage fair and conference. This series of posts will share the individual impressions and findings of three busy days mainly in the EES hall besides the five other halls of Intersolar.
We all know that there is a direct link between e-mobility and electrical storage by batteries. This is known by a broad public latest since Elon Musk presented the Tesla Powerwall in April 2015 in a very well staged presentation. (An interesting analysis of Elon Musk’s style of presentation can be found here.) However, nobody was surprised to see Tesla Powerwall at the Intersolar.
Of course it does not only make sense for Tesla to take advantage of the synergies between e-mobility and batteries for the storage markets. There were more well-known players from the automotive industry present at the Intersolar and EES fair. Here are the ones which I noticed:
· Accumotive/Mercedes: Accumotive, 100% owned by Daimler, was found in the first place to provide battery systems for e-mobility. Meanwhile Daimler founded the Mercedes-Benz Energy GmbH to commercialise the home storage systems produced by Accumotive. Interestingly I learned at the booth at the EES that the battery cells used in the home storage system produced by Accumotive and sold by Merceds-Benz Energy are the cells which were produced by Li-Tec, 100% owned by Daimler, until end of 2015. After Li-Tec stopped the production of the cells it offered the production line for sale. It was not yet published who would supply the cells for the Mercedes-Benz Energy home storage when all Li-Tec cells are used and whether then the home storage would be still fully “made in Germany”.
· SolarWatt/BWM: Stefan Quandt is 90% shareholder of SolarWatt while at the same time he and his older sister Susanne Klatten hold almost 50% of BMW’s shares. The Quandt siblings are known for strategic investments related to the future of BMW. Exemplary was the investment from Susanne Klatten in SGL Carbon, a supplier of products from carbon, especially new carbon fibers for automotive industry. This means that SolarWatt was saved by Stefan Quandt from insolvency a few years ago with the obvious target to connect BMW’s activities in e-mobility with SolarWatt’s acitivities in home storage.
· Eaton/Nissan: Eaton is a supplier of power management solutions including UPS Backup power systems. Nissan is an automobile company which has as well an electric car with an own battery system. Eaton and Nissan co-operate to allow for cost effective home storage systems from Eaton by reusing battery systems form Nissan electric cars as second life batteries.
· Kreisel Electric: Kreisel is an innovative supplier for solutions for e-mobility from Austria. At Kreisel’s booth at the Intersolar/EES showed a Porsche Panamera which Kreisler had converted from the old vehicle with a combustion engine to a full electric car with Li-Ion Batteries. Additionally to this Kreisel presented the very new energy home storage system “Mavero” which is based on the battery system and experience developed for electric vehicles.
This is the first post about our own impressions from the Intersolar and EES in Munich from 22 nd to 24 th June 2016. Look out for the next post of this series.
20th June 2016
Frequency Control Market -
Fewer low hanging fruits than you think
“Which business cases do you have for grid connected energy storage?” I asked exhibitors at the Energy Storage Fair in Düsseldorf. “Control Reserve”, “Operating Reserve”, “Frequency Control” or “Balancing Capacity” were some of the answers. Those are synonyms for fast responding supply or offtake of electrical power to support grid stabilisation.
Clearly, in the current phase the Frequency Control market allows very lucrative business for energy storage or power-to-X installations. Weekly prices around 3000 EUR per MW for primary control reserve are common in 2016 in Germany. Such prices allow payback periods which are significantly shorter than 10 years for Lithium-Ion Battery systems.
So, Frequency Control appears like the low hanging fruits of the energy storage market.
However, the sustainability of the business opportunities of the Frequency Control markets for new projects must be questioned:
1. The Frequency Control market is a small and limited market without a potential to grow. Continental Europe has a total demand of 3000 MW of primary control reserve, Germany ca. 600 MW. The six storage projects Steag will install in 2016/17 sum up to 90 MW[1]. Those will cover already ca. 15% of the German market.
2. Existing suppliers cover all the demand of Frequency Control. New energy storage projects as additional suppliers for same demand will lead to cannibalisation and will reduce the prices. It will be interesting to see how the 90 MW of Li-Ion Storage from Steag will affect the tender prices.
3. Even the early movers do not have the advantage to secure higher prices due to regular tenders for contracts over limited periods. This means that even early movers such as the WEMAG with the 5MW/5MWh Lithium Ion storage for primary control reserve need to tender every week for a new price. Therefore the future revenues of this project is on risk due to new competitors in the Frequency Control market.
With each low hanging fruit picked all the others will be hanging a bit higher.
As a consequence grid connected energy storage, power-to-x or distributed virtual storage projects should not relay on the Frequency Control market as the only business case. Otherwise required income may become too low before the projects are paid off.
[1] http://www.steag.com/s-pressemeldungen-detailansicht+M563bdbd2755.html
7th June 2016
Valuation of Sonnen GmbH – Estimation based on the GE investment
GE Ventures invested in Sonnen Gmbh as published by Sonnen on 6 th June 2016. See http://www.bloomberg.com/news/articles/2016-06-06/ge-ventures-buys-stake-in-german-sonnen-to-boost-solar-storage
One can try to estimate the valuation of Sonnen based on this investment. It was published that GE Ventures bought a stake for a mid double digit million euro value which could mean a price somewhere between 30 and 70 million EUR. Since the investment was not a take-over GE Venture would have received a minority stake probably somewhere between 10% and 40%.
Based on these assumptions the valuation could be somewhere in the range from 100 to 400 million EUR probably rather in the range of 200 to 400 million EUR.
Putting this in context with the latest information that Sonnen sold 2600 batteries in Q1/2016, even out beating Tesla having sold 2500 batteries in the same period this deal seems to make sense for all parties. See www.pv-magazine.com/news/details/beitrag/sonnen-bests-teslas-powerwall-in-q1-battery-sales_100024518 .
It allows GE to participate in a leading German and international player for a reasonable valuation. Sonnen meanwhile gets a partner which is not only helpful for the US market but which allows Sonnen to “play with the big boys” on an international level. Sonnen will be able to develop further steadily while keeping up with Tesla which is not only valued roughly 100 times higher than sonnen but which is at the same time loaded with high expectations.
9th May 2016
Saudi Arabia Vision 2030 -
Potential PV installations until 2023
Based on the latest publications related to Saudi Arabia Vision 2030 it is understood that the renewable energy target of 9.5 GW is planned to be met by 2023. See https://www.linkedin.com/pulse/saudi-arabia-announces-95-gw-renewable-energy-target-under-borgmann
This is clearly more challenging than the earlier assumptions to achieve this target until 2030, but it is still feasible as I like to show in the following. For this I compare the development which would be possible in Saudi-Arabia from 2017 until 2023 with the development of photovoltaic (PV) installations in Germany from 2003 until 2009.
As one can see in the figure the development in Germany was in 2003 still at a very low level below 150 MW per year. However, the annual installations ramped up so that by 2009 the cumulated installation of more than 10 GW over 7 years had been achieved. In 2009 the annual installation of PV in Germany was above 4 GW.
Based on the experience form Germany and assuming that the 9.5 GW target would be only achieved by PV installations one could imagine a steady development in Saudi Arabia similar to what we had seen in Germany. The orange curve shows how such growth or annual installation could look like to meet the 9.5 GW target by 2023.
Looking at this curve one can imagine that such a development could be just the beginning of an even faster growth in Saudi Arabia after 2023. The latest news give hope that such developments may be possible if the right policy frame work and conditions will be set up which allow renewable energies to compete on an equal level with oil in Saudi Arabia.