Agenda • SMART products • Market overview • Sales & Marketing Projected financials and planned capitalization 2013 • 2
Agenda SMART Product 3
SMART kinetic turbine with strong USP SMART kinetic zero head turbine • addresses canals and smaller rivers with as little as 2 m depth Built as mono- or duo-float turbine • with 5 kW generator and integrated debris protection Can be installed off grid or grid • connected; single or three phase, 110 V or 220 V systems Off grid system with minimized need • Smart Hydro Power‘s (SHP) first reference for batteries plant close to Munich has been running Easy and fast installation with • since September 2011. anchor stones or metal cable Other permanent reference plants in Brazil, Colombia, Germany, Indonesia, Peru No regular preventative main- • (currently de-installed), Switzerland. 4 tenance, only regular cleaning
Easy to use, fast to install & reliable operate • Baseload generation Performance of generator 6000 • Output completely defined 5000 by run of the river 4000 Papp [W] 3000 2000 1000 0 1 1,25 1,5 1,75 2 2,25 2,5 2,75 V [m/s] The power curve is tested in SVA Potsdam (independent academic institute). • Standardized units with no re- quirements regarding technical Generation curve at river Inn (Germany) knowledge of operator with Smart Hydro Power‘s own plant working • since April 2013 – and surviving a „ 500 year“ Installed within few hours 5 flood
Competitive against PV and diesel • Design to cost approach with diesel for off-grid as main competitor (0,30 € / kWh) Grid connected photo- • voltaic becomes compe- titive with 0,17 € / kWh • SMART hydropower most competitive with 0,10 to 0,15 € / kWh (sites > 1.7 Generation costs per kWh differ depending on m/s velocity) velocity of the river and amortization time of the SMART hydropower can be • plant. In general the plant is designed for 10 years life cycle with no major parts that could combined with PV and / or break or do require service and maintenance. diesel 6
Unique compared to direct competitors Market presence emerging markets SHP today the only interna- • tional competitor addres- SHP sing rivers in emerging markets Powerspout Seabell (Australia) Only local, low tech projects (Japan) • compete at same cost level Hydrovolts – possible cooperations (USA) Apro Eng. KSB (Col) (GER) Aqualibre Next best competitor regar- • Local (Austria) ding design (New Energy) projects Riverrider New Energy doble as expensive (G3, Brazil) (GER) (Canada) Next best competitor regar- • Industrial design ding market (Powerspout) Market presence in emerging markets: market presence not in the same market (# of plants), design for rivers and canals segment (small low head Industrial Design: fabrication process, scalability, neces- turbine) 7 sity of additional infrastructure works, costs per kWh
Local assembling and technology transfer • Main markets are emerging countries; unit designed for easy local assembling • Local assembling and local sourcing brings down cost for transport, import and nationalization (“German engineer - ing made in [country]”) • SHP is ready for local joint ventures wherever core components can be fabricated for large local or international market (e.g. India – power electronics) • Training of local staff as pre-requisite for The turbine has been designed to be as- large roll-out adds value to projects sembled in remote areas with a maxi- mum of components to be sourced lo- • SHP international staff has a proven cally. Local workshops considered as track record in intercultural co-opera- training centres for mechanical and 8 8 tion and trainings electrical technicians.
International team with engineering focus • International team from Design to Cost as corporate task target markets with SHP is continously improving the cur- rent product and will broaden its pro- diverse background duct portfolio. Engineering focus • The team with a mix of competences Managing Director with clear market and in engineering, materials / fabrication K. Kolmsee and markets allows cost leadership. ex E.ON sales director, 17 customer vision years in the energy sector The team follows a strict design to costs approach starting with a tho- Logistics / Admin rough understanding of the use a M. Reiser product can have in the field. translator for English, Spanish Operations R&D Sales Finance C. di Sano, KAM P. Froede, Production-Eng. M. Auer, Construction F. Souza , Back Office Nikita Lau (1.2014) M. Weckel, E-Engineer C. Belloni, Product J. Gomez, Colombia Development (11.2013) Chinese accountant with U. Tewari, E-Engineer international team from USA, background from Hongkong perfect fit between Oxford proven ability to combine based private equity company Brazil, Colombia with strong education with first years at Siemens background with GE's research centre and technical background hands on attitude hands on construction 9
Market Overview Agenda 10
1.8 Bn people do not have electricity • Electrification grade by countries – Nigeria 50% – Indonesia rural 50% – India 70% – Peru 80 % – Brazil 85% Rural areas most affected • Many rural villages along rivers as • main transport way • Some cities (e.g. Iquitos, Peru) not connected to central grid Inauguration of machinery house for Even large cities connected to central • inverters and batteries at Marisol, Peru. grid with regular black outs In remote areas local electrification • Lack of electricity has a direct impact committees or newly founded utilities are on development operating the units and responsible for distribution of energy within the villages. Government programs for • 11 electrification
Other regions want to change energy mix • Countries promoting decen- tralized generation – Germany – Switzerland – Canada – Chile • In other countries (USA) indivi- duals or communities want to be Many countries incl. most European and independent from large utilities some Latin American (Brazil, Chile) and • Decentralized generation reduces Asian (India) ones do have feed in tariffs. Highest is Switzerland and lowest India. costs of grid and stabilizes its In some countries (Switzerland, Ger- operations many) there is already an incentive in place for grid connected plants on the low • High electricity costs in Europe at voltage line as this reduces costs for grid 0,20 to 0,26 € / kWh (residential) operator. 12
Billion Euro market opportunity Market by segments (prioritized by size) – Decentralized electrification – Modular plants in canal systems (India, Pakistan, Peru) – Green electricity (grid connected) – Agricultural market (diesel driven Market analysis based on Frost&Sullivan study on diesel generator market, PV market volume as locally irrigation pumps) published and own bottom up analysis with counting of – Mobile or temporary rivers / villages in selected markets. installations (working Market study only counts for 5 kW market leaving camps and first aid) opportunities for smaller and larger units to be 13 developed by Smart Hydro Power.
Agenda Sales & Marketing 14
Kinetic hydropower – „natural born global“ • SHP is aware of the necessity of a global sales approach • Local necessity for project development, service and maintenance („local value chain“) Product characteristics allow • local assembling and partly sourcing of metal parts to keep transportation and nationali- The market potenial is global with many still hidden opportunities in the developing zation costs down world mainly Africa and Asia. Due to its uniqueness SHP already before intensive SHP is a wholesale company market entrance attracted inquiries from all selling via local partners major target countries. 15
Selected partners for larger regions • Local value chain by partner – Importation and sales – Final assembling – Installation, service, maintenance, local stock SHP focus components genera- • tor, blades, diffusor, electronics Existing partnership for Indonesia • Sales partners in India; Pakistan • Partnerships under negotiation in • Succesful partner development in Indonesia Colombia, Nigeria with Power Service Indonesia (PSI) an In- donesian-German copmany transforming Negotiations with Siemens for • diesel engines to gas. PSI has aquired and Brazil implemented a first electrification project and is currently negotiating its first larger project No licensing (IP strategy) • 16 with Indonesian mobile operator Telkomsel.
Step by step market entrance by region Seven core countries (date • of market entrance) – Germany (2012) – Indonesia (2012) – Colombia (2013) – India (2014) – Nigeria (2014) – China (2016) – USA (2017) Core countries as regional • hubs with potent partners and local stock South America and India / Pakistan are envisaged as Germany / Austria / • largest markets with slightly different project designs: Switzerland developed by India and Pakistan with modular plants in canals and SHP via project developers South America with electrification projects. 17
Agenda Projected financials 18
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