How to invest in green energy: Ceres Power CEO’s advice on sustainable stocks

Ceres Power has reached an agreement to help a colleague Imperial College London The spin-off brings the world’s cheapest flow battery to the market.

this Green energy Pioneer is gaining an 8.4% share of RFC Power, and the company is developing low-cost storage technology, which is considered to be the missing “difficulty” in the UK’s commitment to achieve a zero net grid by 2040.

This cooperation comes at a time when Ceres led by Phil Caldwell is preparing to apply for admission LondonThe primary AIM index has become a major market after nearly 20 years.

Its valuation of £2.2 billion—higher than WH Smith and Aston Martin—will qualify it to quickly enter the mid-sized FTSE 250 index.

This move will be a welcome boost to the London market. British tech stars usually turn to the United States because their investment market has surpassed the British investor market, and the government and the city are working hard to reverse this trend.

Caldwell believes that the combination of investor pressure, carbon taxes and top-down regulation will soon push the cost of renewable energy to be equal to that of traditional fossil fuels.

He said: “We have always believed that fossil fuels are low cost, which makes us addicted to them. But as supply issues and carbon taxes push up prices, alternatives will start to become commercially viable.

“Storage will eventually make the penetration of renewable energy possible. This is a huge market opportunity, and there is a lot of money invested in clean energy technology, which will push it to a tipping point.”

Caldwell advises investors to focus on the broader industry instead of trying to select individual blockbusters. He said: “You have to bet on big themes. It’s clear that certain trends are starting to become irreversible.

“In order to reach net zero, we need hydrogen. Obviously we need to store it. The battery will be consistent with the electrification of transportation.

“So, from an investor’s point of view, if you invest in great companies with the right partnerships, scale, and ambitions in these areas, then this is how I deal with this issue.

“Sometimes people will say,’Is there a panacea, a technology that can solve all problems?

“This is obviously not the way it is going to happen. It will take away all the tools in the box. For companies that have achieved scale in this area, the market opportunity is huge.”

Caldwell said that his company’s own plans to move to major markets will open up new opportunities to attract investors and capital.

He said: “We may get a higher valuation in the United States, but we have worked hard to build an investor base here and we are proud to be a British company.”

Ceres has established partnerships with global engineering giants including Bosch of Germany, Weichai of China, and Doosan of South Korea, who use its technology to build low-carbon power systems for industry, data centers and transportation.

It raised 181 million pounds in a March financing round, and the city pension fund joined the ranks of cornerstone investors Bosch and Weichai, which hold 18% and 20% of the shares, respectively.

During the pandemic, the company more than doubled in size, from 200 employees to 500, and commissioned a huge new prototype manufacturing plant in Hongshan.

As investors poured into the booming ESG-friendly “ethical” stock market, its stock price more than doubled in 2020.

This business model is similar to that of Cambridge-based mobile phone chip manufacturer ARM Holdings. Its technology is licensed globally to engineering companies that specialize in mass manufacturing. Ceres charges a fixed fee for each unit of energy produced.

This light asset structure brings a healthy profit margin of 70%. William Tudor Brown, the co-founder of ARM, recently joined the board of directors.

At the same time, RFC was spun off from Imperial College London in 2017 and is headquartered at the university’s Baicheng Incubator campus.

It is developing rechargeable flow batteries that can store energy generated by wind and solar energy in a way that is cheaper and longer than existing capabilities.

This transaction will increase Ceres’ clean electrochemical energy technology library.

RFC Power CEO Tim von Werne said: “Energy storage is a key component of the transition to a low-carbon energy system.

“The cooperation with Ceres Power will accelerate the development of RFC technology and enable us to bring our long-term energy storage technology to the market at the speed required to meet this global demand.”

Investec analysts said that long-term energy storage is the “missing part” required for the energy transition, adding: “We think Ceres is positive in establishing optionality here.”