Periodic Reporting for period 1 - RenGen (Onsite, On-demand, Self-standing Cost Competitive Zero-Carbon Power Generation) Reporting period: 2017-02-01 to 2017-07-31 Summary of the context and overall objectives of the project The project develops a no carbon emitting and cost-competitive power generator based on patent pending ammonia to hydrogen generation technology and proton exchange membrane fuel cell. The eco-friendly power generator will primarily replace polluting and inefficient diesel gensets (DG) for powering mobile phone towers situated in poor and off grid areas.All over the world in rural and rugged areas, disaster relief zones and in areas with no or unreliable grid connected power supply, expensive to operate and severely polluting diesel powered generators are deployed as power supply and backup. Even in urban areas on construction sites, for other temporary auxiliary installations and for emergency power backup systems in the mobile telephone infrastructure, these gensets are widely used. According to GSMA, the mobile operators by 2020 will burn €19 billion of diesel to operate the mobile telephone towers which is 30% of the operating cost of these towers and the Mobile Network Operators (MNOs) are searching for reliable alternatives to reduce cost. Not only that, the diesel gensets installed in mobile tower sites will emit 45 million tons of CO2 and a huge amount of NOx and other poisonous gases to the atmosphere . Because of stricter environmental regulation, the mobile operators may not afford to do that. In Bangladesh, for example, MNOs licenses are conditional upon implementing 5% of clean energy by 2018.In case of the mobile telephone infrastructure and similar more permanent installations, other clean solutions to the power supply are solar PV and wind turbine systems with battery back-up. However, in many sites these solutions are not applicable, due to local weather conditions, huge seasonal change in the available renewable energy source (sun & wind) or other constraints, like local restrictions on noise, pollution and visual impact on the environment. In these cases hydrogen fuelled PEM-fuel cells are the only alternative to DG. In spite being the cleanest fuel emitting only water while energy is generated, hydrogen widespread use is severely hindered by its very low energy density. Because of this issue with hydrogen, PEM fuel cells, in spite of having immense potential as clean energy generator, have not been able to find widespread applications as they deserve. RenCat is developing and commercializing a unique zero carbon fuel cell based power generator that uses ammonia as fuel. The effective energy density of ammonia is six times that of hydrogen stored in gas cylinders and like hydrogen no CO2 is emitted. In other words, ammonia provides all the cleanliness of hydrogen at six times the energy density of hydrogen.RenGen is preliminarily targeted at mobile phone towers situated at off grid and unreliable grid areas. The growth of mobile phone infrastructure has far outpaced the growth of electrical grid in the developing world. Therefore, in order to power the towers, the telecom operators are relying heavily on DGs. There are 1 million existing towers situated in unreliable and off-grid areas and 40000 new towers are coming up each year. According to Future Market Insight report, the global telecom tower power system market is projected to reach € 5.7 Billion by 2025 at an estimated CAGR of 12.2% during the forecast period . We target this huge and expanding market to provide a cost competitive and cleaner alternative to DG. The market segment (mobile tower backup) was chosen based on the immediate demand or market pull of the technology. The telecom operators are looking for cheaper and cleaner solutions to replace diesel generators. Hydrogen fuelled fuel cells are cleaner and more efficient solutions but the energy density of hydrogen is very low and the operation is expensive. Therefore, there is a demand for hydrogen like fuel with higher energy density and RenGen can meet that demand. The power generation cost is also cheaper than diesel generators for this application when Rencat technology is used. We have already signed a Memorandum of Understanding (MoU) with Grameen Phone(GP), a subsidiary of Telenor and the largest operator in Bangladesh with over 55 million customers as a field test and product launch partner. RenGen is a disruptive technology product, enabling for the first time on-demand, cost effective production of power from ammonia – a Carbon free and widely used chemicals, with only nitrogen and water emission. With RenGen, RenCat is set to displace presently used, increasingly regulated toxic and pollutant emitting diesel gensets (DG) in mobile tower sector and in turn in other on-site and on-board energy generation applications. By doing so, RenCat will:• Save up to 50% in costs vs. present day solutions.• Increase reliability of the mobile networks • Help in the expansion of network in yet uncovered areas• Reduce the environmental impact by eliminating carbon and other toxic gas emission• Create a > €5B billion opportunity across its value chain. Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far Key Objectives of Phase I Feasibility StudyOur key objective throughout phase I of this innovation project has been to establish the feasibility of the RenGen solution, primarily from a business perspective. Our methodology in doing so has largely been based on working with our partners and target customers, in order to refine target specifications and achieve detailed market segmentation and market opportunity analysis. This analysis, together with BOM and production cost analysis, has resulted in the development of a go-to-market strategy and business plan. Additionally, strong advancement has been made on the technology and product development front, in the development of a robust working prototype, which will serve as the basis for upcoming field trials. Our understanding of the IP landscape has been further refined through in-house as well as 3rd party analysis, regulatory landscape has been mapped and strategies devised to achieve approval.Highlights of FindingsMarket and UsersObjective: Mapping the market and obtaining direct target customer feedback across customer-size, technology, and application, in order to determine optimal go-to-market path, business and pricing model for our primary market. Map potential next-phase target markets and respective entry points.Key Findings and Achievements: • Met with very strong interest and demand with leading telecom operators and network equipment provider. Two of the companies have strong interest in partnering with us in an end user / channel partner model. There is a strong need for technology demonstration in the form of field-testing.• Through engagement with local network operator mapped market within the mobile phone sector and determined optimal market entry point.• Engaged in discussions OEMs for applications beyond telephone towers e.g. process monitoring and control, security cameras etc.• Extensive direct market information in respect to current business and operational models for Diesel based powering • Potential RenGen ROI and Pricing models.Based on the above we have defined our go-to-market path, business and pricing model. Field trialsObjective: Identify candidate field trial sites.Key Findings and Achievements: • Identified two field test sites both situated in rural areas of Bangladesh• Identified market entry segment in telecom sector in BangladeshProductObjective: Definition of primary product requirements, design of a robust design as a basis for entry into field trials in Phase 2, and definition of product supply chain and cost model.Key Findings and Achievements:• Product requirements were refined through direct engagement with target end users, and major channel partners.• Designed and built a robust, highly-scalable RenGen prototype which will serve as a basis for entry into field trials in Phase 2.• Built detailed supply chain and BOM model.Intellectual Property, RegulatoryObjective: Study and define IP and regulatory landscape, strengthen IP position.Key Findings and Achievements:• IP position substantially enhanced through filing into national phases of EU, USA, Canada, Japan, China and India• Confirmation of novelty and inventiveness by the independent examinersGo to marketObjective: Initial market penetrationKey Findings and Achievements:• Technology demonstration and field testing is a must for product introduction. Field trial sites selected with an operatorFinancialsObjective: Build comprehensive financial model for the RenGen business planMethodology: Detailed bottom-up modelling of revenue, cost of sales, and operations Key Findings and Achievements:• Financial model yielding strong well above 30% IRR through 2023 based on a below € 2 million investment todayBased on the above key findings, we have determined strong feasibility of the RenGen business. Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far) RenGen is a high impact technology making the power generation fuel cell cost-competitive by removing the low energy density barrier and infracture issue of hydrogen and cutting down pollution in the process. In a few years, the technology will create high value jobs in europe and contribute to its growth. During the span of the feasibility study, we have significantly improved the RenGen prototype. The first in the world of its type of zero carbon power generator has been scaled up and demonestrated. RenGen will cut a significant portion of 18 million ton of CO2 and other toxic gases and particles emitted by the diesel generators in the mobile tower powering application. Growth of mobile networks in developing regions has greatly outpaced that of developed. In the second quarter of 2014, alone, new mobile subscriptions in Africa and China reached about 20 million and 12 million respectively, while in North America and Western Europe the growth figures were only 2 million and 3 million respectively.However, 80% of Africa and 30% of developing Asia falls into the under-served electrification scenario that results in the bad-grid and no-grid power access to mobile base stations. The estimated total number off-grid and bad-grid base station tower sites as predicted for 2020 is 458,200 in Asia/Pacific, 371,900 in Africa, 350,900 in Latin America – in total 1,180,900 towers.. Thus, as mobile network operators expand into these un-served regions, they are faced with the additional cost of rolling out power infrastructure in parallel with cellular network infrastructure. In the case of base stations situated in regions with bad-grid or off-grid power availability, the predominant source of power for the base stations is DG. Diesel generator is costly in both the procurement of fuel and operational cost required to maintain adequate power levels at the base stations.Due to environmental concerns and in the face of the increasing diesel costs required for continued mobile subscription growth, network operators are increasingly exploring diesel generation alternatives, such as PEM cells fuelled with bottle hydrogen. Compared to these the gen set solutions based on the RenCat technology will provide a 50% better overall operations economy and a substantial environmental advantage. Compared to the bottled hydrogen solution it is mainly in the fuel cost, replacement frequency the advantage is found.From the economic perspective, RenGen will be a high vale job creator in Europe and contribute to its growth. By 2023, RenCat will be generating nearly €50M and will have created 170 new high value jobs.
