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MESA REDONDA: FINANZAS SOSTENIBLES. Andres Suarez Exolum X SimposioFunseam2022.pdf

  1. Fostering energy transition Presentation at Funseam: Opportunities for the energy industry European Funds & Public/Private Collaboration Andrés Suárez – Global Strategy & Growth Lead | Ventures & Innovation Lead May 10th 2022
  2. 2 Exolum has more than 90 years of experience in logistics management Exolum is the leading logistic company of bulk liquid products in Europe 68 terminals for product storage +6.000 km Of refined products pipelines 46 airport facilities +11.000.000 m3 Of storage capacity 13 port facilities Exolum global assets Exolum services More than 90 years of experience More than 2.100 employees 1st logistic operator of liquid product in Europe Present in 9 countries: Spain, United Kingdom, Ireland, Germany, Netherlands, Ecuador, Panama, Peru, Oman Exolum Group overview We are engaged in the transportation and storage of a wide range of bulk liquid products, in a sustainable and efficient manner with high degree of automation Exolum is expert in the logistic management of diverse liquid product: • Refined product • Chemicals • Biofuels Broad experience in the development of infrastructure projects: from design through engineering and construction to operation
  3. 8 7 1 9 5 3 2 6 3 Exolum operates in 9 countries Exolum started its international expansion in 2014 and continue to grow 1 Spain • 4,000 km of oil pipelines • 39 storage terminals • 8 million m3 of storage capacity • 13 port facilities • 37 airport facilities • 6 hydrant networks 9 Oman • 290 km of oil pipelines • 1 storage terminal • 174,000 m3 of storage capacity 2 United Kingdom • 2,000 km of oil pipelines • 24 storage terminals • 2.5Mm3 of storage capacity 8 Peru • 1 airport facility • 34,800 m3 of storage capacity • 1 hydrant network 3 Ireland • 1 storage terminal • 30,000 m3 of storage capacity • 1 airport facility • 1 hydrant network 7 Panama • 6 airport facilities • 18,000 m3 of storage capacity • 1 hydrant network 4 Germany • 1 storage terminal • 30,000 m3 of storage capacity • 1 airport facility • 1 hydrant network 6 Ecuador • 1 airport facility • 5,800 m3 of storage capacity • 1 hydrant network 5 The Netherlands • 1 storage terminal • 614,000 m3 of storage capacity 4 Exolum Group overview
  4. 4 Strong and resilient financials Diverse group of financial investors ensuring investment capacity 25% 25% 20% 10% 10% 10% 0,23% 24.77% OMERS Administration Corporation 0.23% Others 20% Macquarie European Infrastructure 10% Crédit Agricole Assurances S.A. 10% APG Infrastructure Pool 2017 II 10% The Workplace Safety and Insurance Board (WSIB) Operating income 2020 2021 878 Financial key indicators (M€) Our shareholders include major international investors CAPEX Operating expenses 2020 2021 EBITDA 2020 2021 Profit for year 2020 2021 635 407 548 338 471 170 214 Financials & shareholders 25% CVC (Capital Partners) 2020 2021 101 105 CAPEX 17’-21’: 476M€
  5. Exolum is focused on four growth pillars Capture opportunities in new energy vectors and resilient businesses Growth avenues 5 Become a leader in chemicals logistics by growing the business through acquisition & integration of existing companies/businesses in Europe & North America • Midstream assets with significant chemicals business • Focus on high value-added chemical products (specialty chemicals) • Carve-outs Inorganic growth in chemicals (M&A) Grow the current business maximizing the use of current assets and locations by deploying capital to perform new services and growth our customer base • Become the reference partner for OilCos for their logistics services • Co-investments and carve outs of their assets where synergies can be captured Invest around current customers or assets Become the largest and most profitable international & independent player in the field of fuels infrastructure logistics services in airports • Investment in fuel farms in new airports or airports expansion (tank farm and hydrant systems) • Assets divestments from airlines or airport consortiums • Tenders for fuel farms O&M Aviation New business models in line with energy transition trends levering on our capabilities in infrastructure design, construction and O&M • Renewable gases and related products • Circular transformation • Renewable power and CO2 management • Business venturing Ventures & Diversification
  6. Renew. Power & CO2 Circular Transformation Renewable Gases Energy transition and diversification levered on nine focus areas 6 Dynamic management of our projects portfolio Green Hydrogen Production, storage, transport & supply for mobility & industrial decarbonization as a solution integrator in partnership with relevant players H2 Advanced biofuels Develop alternative fuels from sustainable sources (WtX) - focus on logistics services (land, marine & aviation) & open to molecule exposure Energy storage Identification, development and investing in business models for mass & long- term renewable energy storage Biogas Promote biogas development (mobility and industrial) & leverage to acquire competencies applicable to H2 Synthetic fuels Enable technological development of CO2 conversion into fuels (ammonia, methanol…) CCUS & transp. Investigate & promote technologies and business models to reduce carbon emissions across industries Carriers Support technological development of carriers and identify business opportunities around existing assets in storage and transportation Water Investing in business areas where technology, efficiency & optimization are a competitive advantage for infrastructure mgmt. Business Ecosystem Business Venturing Promote and invest in open innovation (start-ups) linked to the focus areas or that will foster/support their development 20 1 7 2 - 2 1 2 2 # Number of projects in each focus area (as of presentation date) Ventures & Diversification appetite
  7. 7 Our strengths are embedded in our approach to new businesses Exolum businesses rely on strategic assets and Exolum long standing experience Integral solutions Exolum offers integrated services covering different part of value chain 1 Optimization experts Cost efficiency across all processes tailored to your customers' needs enabling competitive services 2 Technical expertise Promoting technological progress through people, facilities and arrangements with Centers of Excellence 3 Financial capacity Financial capacity to undertake projects with high investment requirements 4 International presence Exolum beneficiate of a broad coverage and keep expending at a fast pace 8 Regulatory enforcement Experience in adapting to regulatory changes, having continuous contact with public administrations 5 Guarantee of supply Experience in the supply of products and services that guarantee the continuity of supply 6 Our strengths Partnerships Growth through partnerships and alliances based on trust, flexibility and open collaboration 7
  8. 8 Green hydrogen The decarbonization carrier for all the sectors Why green hydrogen? • Green hydrogen is positioned as the most competitive decarbonization alternative to achieve the Green Deal objectives • Strong support from the European and Spanish institutions to boost the hydrogen economy, as well as in other countries • Good solution to decarbonize some difficult to electrify transportation segments • New production infrastructures to substitute natural gas and grey h2 • We aim to cover the whole hydrogen value chain, from production to supply, including storage, transport and distribution • We design, develop, invest in, and operate hydrogen infrastructures • Projects originated around existing h2 industrial demand • Large h2 production sites and infrastructure • Projects that may extend the life of existing infrastructures The opportunity The projects we are looking for h2 Green Hydrogen
  9. Key drivers Challenges Cost reduction and bigger scale production are the main challenges for H2 However, the obligation to decarbonize industry and transport will be a key enabler Source: Hydrogen Roadmap Europe 2019, IEA 2019, Hydrogen Council 2020, Exolum analysis Regulation and subsidies Infrastructure & logistics Components costs reduction CO2 pricing increase 9 H2 to decarbonize  Awareness & positioning of EU reflected on dedicated funds for H2 in transport and industrial  Adaptation of current natural gas network will allow the use of H2 in domestic and industrial heating applications  Some initiatives developing a network of HRS (i.e. Win4H2)  Government promoting initiatives to develop new technologies to improve efficiency and allow costs reduction  Many companies investing in H2 development  Increase of CO2 price will encourage the use of H2 in industrial processes  The price already increased from ~23 to ~75€/t since 2020  Europe pushing for green H2 as the greener & more plausible solution  Refining/chemicals: no other alternative than green H2 to decarbonise  Regulation to make decarbonized alternatives more attractive and penalize the conventional polluting alternatives • Application during certain period of time • Maintain technological neutrality  Higher development for long-haul transport required to foster international trade of H2  HRS network not available to enable free mobility  Renewables electricity cost to reach ~10/20 €/MWh  Industrial production (mass scale) of electrolysers  New green H2 production technologies  Vehicles cost reduction  H2 costs of production remaining high and can be a stopper  The Emission Trading System doesn’t consider transportation (except aviation) for the moment Green Hydrogen
  10. 10 Grants intensity are key to foster development of green H2 projects for mobility Production of H2 represents between 40% and 50% of total Capex 75% 70% 18 65% 60% 55% 50% 45% 0% 50% 60% 70% 80% 90% 100 % Grants (% of investment) % of H2 production sold % IRR IRR depending on grants and commercial IRR 5% - 10% IRR >15% IRR <0% IRR 0% - 5% Green Hydrogen Hypothesis • Electricity: 40 €/MWh • Aggressive ramp-up: 2 years • H2 pricing: ~10/12€/kg • Production capacity: 150 t/y 61% 49% 6% 8% 2% 3% 8% 10% 15% 19% 8% 10% Solar PV + Electrolyzer HEVO H2 Production Compression 40 bar Purification Compression 500 bar Storage 500 bar Dispensing Contribution of H2 stages to total Capex 39% to supply green H2 for mobility 51% to supply green H2 for mobility 1 2 1 2 Is the current level of grants enough to foster the development of the green hydrogen industry? Are the end customers ready to shift to green hydrogen? Do they have the right level of grants for vehicles acquisition (case of mobility)
  11. • Develop a network of 50 HRS to enable transportation using H2 as fuel • Guarantee the hydrogen supply in the main national routes (TEN-T corridors) • Establish the needed corridors between Spain and France and Portugal. 11 Win4H2 Whole Iberian Network for Hydrogen Own funds project Spain >400 M€ Design Permitting Execution Operation • Reach between 30%-50% of the Spanish Hydrogen Roadmap • Phase I: 4+1 HRS by 2023, generating 700 tH2/y (supply for ~70 vehicles) • 50 HRS by 2030, generating 4-7 MtH2/y (supply for ~800 vehicles) Model definition completed 2022 First route into operation 2023 Full project in operation-50 HRS 2030 HRS Phase I International connections Ports linked to Phase I HRS Objectives Description Green Hydrogen
  12. • Construction of the 1st on-site green H2 generation and dispensing plant in Madrid • Promote H2 application for heavy road transportation 12 H2 Henares First on-site green hydrogen production and supply plant in Madrid Own funds project Madrid 2 M€ Design Permitting Execution Operation • 1 HRS with production plant (applying fusion fuel) tec • 60t of green H2 per years • Supply of 8 vehicles per day Model definition completed 2021 Execution and construction 2022 In operation 2023 Objectives Description With the collaboration of Green Hydrogen Madrid
  13. • Develop innovative technologies for efficient and cost-effective storage of surplus renewable energies • To be applied for industrial processes for the production of green fuels, hydrogen, methane and hythane. 13 Regenera Developing large scale energies storage & distribution technologies Project financed with 'NextGenerationEU' recovery fund for Europe, subsidised by the Centre for the Development of Industrial Technology (CDTI) and supported by the Ministry of Science and Innovation. Spain ~0.8 M€ Design Permitting Execution Operation • Research into technologies for the storage and distribution of hydrogen of renewable origin in liquid carriers. • Developing technologies for large- scale, long-term energy storage. • Energy optimisation & management based on ML models. Definition 2021 Operation & features of pilots 2024 Objectives Description Project´s images/schemes, etc. REGENERA predictive models for energy optimization Renewables Surplus Technologies P2G REGENERA H2 CH4 H2 / CH4 Design, modelling Predictive energy optimisation models Starting operation 2022 & 2023 Green Hydrogen
  14. • Investigate new materials and manufacturing processes focused on the generation, storage and transport of hydrogen in a cost-effective form 14 Green H2 Pipes R&D project to develop transportation and storage technology throuyh LOHC Spain ~0.75 M€ Design Permitting Execution Operation • Research new materials in all electrolyser components with a final price reduction • Increase storage capacity in organic liquids • Improve the efficiency of hydrogen and natural gas separation membranes New materials and new electrolyser stack LOHC and decarbonisation of the natural gas grid Recycling and LCA 2021-2024 Objectives Description Project financed with 'NextGenerationEU' recovery fund for Europe, subsidised by the Centre for the Development of Industrial Technology (CDTI) and supported by the Ministry of Science and Innovation. Green Hydrogen h2 h2 LOHC + LOHC - Hydrogenation Storage Dehydrogenation Release
  15. Thank you 15