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Investing in Cleantech from a Corporate Persepctive
Sandra Eager - Oct 24th 2012
BP confidential
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Contents
1. Introducing BP Ventures
2. Portfolio
3. Our approach
4. Case Studies
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What? ■ 30 investments totalling $160m since 2006 ■ $190m to be invested by end 2012 ■ First returns realised in 2011, further returns expected in 2012
How? ■ Investing in early and growth-stage energy ventures ■ Incubating high-potential proprietary R&D from leading universities
Who? ■ 8 venture professionals based in UK, US, China and India ■ Network of world-class technical and energy market expertise across BP
BP Ventures — at a glance
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Sunbury, UK
Bochum, Germany
Hull, UK
Pangbourne, UK Naperville, USA
San Diego, USA
Houston, USA
An integral part of BP’s innovation ecosystem
Examples of BP’s major research partnerships
Internal R&D – 7 major technology centres
Internal R&D
Corporate venturing
Academic institutions
Strategic Alliances &
JVs
CORPORATE INNOVATION
M&A
Examples of corporate venturing
SGI Mendel
Brightsource
Xtreme
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• Venturing provides access to a large pool of scientists and entrepreneurs, difficult for corporates to employ directly
• Generally offers faster development and deployment • Compliments and supports in-house research • All with a financial return if done well
• Venturing also enables:
Capture and value creation from in-house technology
Capture and value creation from BP-funded research
What is the purpose of venturing?
To create value from investing in emerging energy technologies and business models that are strategic to BP
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DESALINATION SOLAR SYSTEM TECH ENERGY STORAGE BIOFUELS
Selected targeted Cleantech sectors
Examples of sectors Ventures is scanning
WIND TECHNOLOGIES ADV FUELMOLECULES CONCENTRATED SOLAR
POWER ELECTRIC TRANSPORT
WASTE HEAT RECOVERY CO2 UTILISATION
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Venturing evolution: from AE Ventures to BP Ventures
2007-2010 2012 onwards 2011
Expansion of investment targets to include Refining & Castrol
In support of AE businesses & emerging strategic options
Venturing portfolio across the BP Group: strong in Downstream, growing in Upstream
Sensing Imaging
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Investing $160 million in over 30 companies
cleantech funds
storage oil and gas
wind
efficiency
biotech
technology
carbon
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Our approach : How we build our portfolio
• Prioritise areas of investment: align with business (investment thesis) • Scan and assess opportunities • Acquire a minority stake in a start-up with a differentiated technology
Managing the investment Fiduciary duties and extracting insights
• Influence and help grow the company. Ensure BP's option for technology access and deployment
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How do we work internally?
• Input into investment thesis • Two way information exchange regarding emerging technology companies • What are the key questions? • Input into what would we look to achieve through our investment? • What could we offer a portfolio company as a strategic investor? • Participation in our process Access to expertise for technical due diligence Attendance at peer reviews Board Seat representation
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Case studies Optoatmospherics Heliex Power Verdezyne
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OptoAtmospherics – intelligent wind energy
▪ UV light detection and ranging system to measure wind speed for turbine control – improve energy capture and reduce turbine fatigue.
▪ BP interest in maximizing energy output from wind farms; reducing maintenance costs.
▪ BP now has option to test prototype system, plus favoured pricing option on future product
▪ Potential to influence direction of technology development for site assessment and forecasting.
Invest while developing an application of interest to BP Wind
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Heliex – energy efficiency for use in BP
▪ Low-cost screw expander for recovering wet steam energy and high-pressure hot water. It can be installed directly into systems, unlike competitor technology.
▪ Technology has immediate application in steam systems of BP’s operations, working in parallel with pressure let-down valves.
▪ Design is underway for closed loop system to recover energy from high-temp exhausts and cooling systems of large reciprocating engines
▪ 5% of manufacturing base guaranteed to BP
Invest and deploy waste heat recovery in BP assets
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Verdezyne – yeast platform for sugar conversion
▪ Applying advanced metabolic engineering, Verdezyne is developing a versatile yeast platform to optimize the conversion of sugars to fuels and chemicals.
▪ BP Biofuels engaged in a service agreement with Verdezyne to develop a yeast strain with specific characteristics that will be used in BP's ligno-cellulosic ethanol production in the US.
Invest and structure a service agreement with BP Biofuels
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BACK UP SLIDES
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BP’s Alternative Energy business
Brazil sugarcane
US Ligno-Cellulose
Advanced Molecules
Wind
Biofue
ls Lo
w carb
on po
wer
Emerg
ing Bu
siness
&
Ventu
res
BP Ventures
Carbon Solutions
Emerging Businesses
Wind
Wind 13 operating farms 2 under construction Biofuels
1 pilot plant 1 commercial plant under construction
Biofuels 3 operating plants
Biofuels 1 pilot plant 1 commercial plant under construction
BP Confidential
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Lubrigreen – biosynthetic base oils
▪ A suite of revolutionary (biodegradable, non-toxic) biosynthetic base oils with better lubricating qualities than petroleum base oils, fit for the most severe industrial applications.
▪ Castrol is testing the product for automotive and industrial uses, eg. turbines, marine applications.
▪ Venture investment means that Castrol gets a right of refusal when scaled production commences.
Invest and have an option for an off-take agreement for Castrol
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GMZ – waste heat recovery to power
▪ Solid state thermoelectric material that converts waste thermal energy into electrical power. GMZ product has higher conversion efficiency than competitors.
▪ Thermoelectrics offer high-reliability, low-maintenance solution to produce power from waste heat at BP operations, eg remote instrumentation and low-power equipment in harsh environments like Alaska.
Invest and work on an application for capturing heat at the well head for E&P
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Approach for BP Ventures
Identify strategic themes that pose threats and opportunities for BP
Catalyse thinking about the long-term
Bridge the inherent tensions between short- and long-term priorities and value creation
Build growth platforms in selected emerging business areas through appropriate participation strategies
What we do How we do it
Investing in high-potential disruptive innovation in technology and business models
Partnering with early and growth-stage start-ups Incubating high-potential proprietary R&D from leading
universities Using collaborative, complementary and critical
evaluation skills to build a portfolio in global dynamic markets
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Date Sector Venture/Start-up Corporate investor
May 2010 Electric vehicles Reva Mahindra & Mahindra
May 2010 Concentred solar power Brightsource Alstom
May 2010 Electric vehicles Tesla Toyota
June 2010 Advanced biofuels Virent Shell/Cargill
June 2010 Solar Stion TSMC
June 2020 Advanced biofuels Amyris Total
June 2010 Offshore wind A2Sea Siemens
July 2010 Advanced biofuels Verenium BP
July 2010 Energy Efficiency SynapseSense GE
Aug 2010 Material/Solar Nanosys Samsung
Aug 2010 Electric vehicles Bright Automotive GM
Aug 2010 Solar Solarfun Hanwha Chemicals
Rising role of corporates in cleantech Selected corporate cleantech investments during summer 2010 (May-Aug)
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