First published in Cleantech Infocus: 2010 - Equity Deals of the Year, January 2011. Copyright Cleantech Investor Ltd
The fuel cell industry has been out of favour with investors for some time, but the tide may have turned in 2010. A key focus is fuel cells for stationary applications. As we reported in the Fuel Cell Special issue of Cleantech magazine last September, commercialisation of automotive applications for fuel cells is still some time off, but fuel cells for stationary applications are a reality today.
There were a number of secondary offerings during the year, but no IPOs. Companies raising funds included NASDAQ-listed FuelCell Energy in the US (a secondary offering of $30 million to support strong order activity) and Ceramic Fuel Cells (in the UK and Australia).
Notable venture capital deals included ACAL Energy in the UK (to finance the development of its FlowCath technology), Diverse Energy and the investment by PGM Development Fund of South Africa in Altergy and Clean Energy Investments.
The announcement which characterised the trend for the year in fuel cells, however, wasn’t in fact a deal. It was the news that California-based stationary fuel cell power developer Bloom Energy had emerged from ‘stealth mode’ in February 2010, revealing an impressive list of customers which included Google, ebay, Walmart, FedEx and CocaCola. Bloom has raised almost $400 million since it was founded in 2001 and its lead investor is Silicon Valley firm Kleiner Perkins Caufield & Byers.
FuelCell Energy Inc.
Secondary Offering - NASDAQ
US-based, NASDAQ-listed FuelCell Energy raised $30 million in a secondary offering of 24 million shares at a price of $1.25 per share in June. The shares were issued at an historic low price and the company remains loss making. However, the deal was significant in that it indicated that financing is available for the fuel cell industry when there is a business case – and FuelCell Energy does appear to be moving ahead. The company reported strong order activity from the US in the fourth quarter of the year. FuelCell Energy is supplying the largest integrated fuel cell project in the US, at the University of California, San Diego (UCSD) and the City of San Diego. The company is providing the project with three fuel cells totalling 4.5MW of generating capacity, which will run on methane from the San Diego wastewater treatment facility. FuelCell Energy’s management is optimistic on prospects for the fuel cell market in both the US and South Korea, and the company has raised annual production levels to 35MW. Although the share price performance after the June offering was lacklustre, the stock ended the year at a price of $2.31 after a rally in the final months of 2010.
Ceramic Fuel Cells Limited
Secondary Offering – AIM and ASX
Ceramic Fuel Cells raised over £10 million (A$17.4 million) through a placing and subscription at 10.5p a share. The Australian company, listed both in London and on the ASX, manufactures stationary fuel cells for CHP applications.
Altergy Systems/Clean Energy Investments
South Africa’s PGM Development Fund’s first investment was in Altergy Systems of California and Clean Energy Investments. Clean Energy will identify markets for the Altergy Freedom Power Systems, which target back-up power for base station telecommunications, providing an alternative to batteries and diesel generators. Ultimately, Clean Energy aims to manufacture fuel cells in South Africa for the sub-Saharan market. The investment by PGM in Altergy was to secure the transfer of Altergy’s technology to Clean Energy.
ACAL Energy Ltd
Venture Capital Fund Raising
ACAL Energy of the UK raised £3.5 million in May. The company’s FlowCath® technology is understood to be ready for application in small and medium sized stationary power applications. The technology can replace diesel generators in back-up power systems, combined heat and power (CHP) installations and for remote power usage. ACAL is working on the development of larger scale stationary power and transport applications. Investors included Carbon Trust Investments, Solvay SA, Porton Capital and Honda Motors.
Diverse Energy Ltd
Venture Capital Fund Raising
Octopus Investments, through the Octopus Titan VCT funds, Eureka EIS Portfolio Service and Octopus Venture Partners, invested £2 million in Diverse Energy, a company which builds power generators for off-grid telecommunications applications. Diverse Energy’s PowerCube™ is designed as a standalone replacement for diesel generators to power mobile phone communication towers in rural off-grid locations in developing countries. Based in Slinfold, West Sussex, Diverse Energy’s fuel cell technology uses ammonia as a fuel and reduces greenhouse gas emissions by 80%.
See also: McPhy Energy in Storage: Deals of the Year 2010.
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