A Vision of a Low Carbon Future: pH3 Capital Ventures interviews Elire
At pH3 Capital Ventures, we are excited by the innovation we see in the startups we meet who are developing clean tech solutions in the ports and maritime sector. For those companies who are developing integrated infrastructure solutions, the funding challenge takes on a new dimension.
Our Beyond Blue Fund is seeking to fund startups from pre-Seed to Series A as we acknowledge that the road to commercialisation in the ports and maritime sector is one where the demand for funding outstrips supply at the current time. Whilst it is recognised that an integrated approach to solutions is often necessary, the level of risks and uncertainty don’t favour the typical project finance route which tends to invest in the development stage of large infrastructure projects on the basis of known cash flows over the long term. How do we develop projects from pilots to the commercial scale needed as the march towards net zero becomes ever shorter?
We spoke to Luke Jenkinson, Managing Director of ELIRE (https://eliregroup.com ), a venture group which is on a journey to transform the future of transport with its new cleantech infrastructure (Smart Hubs) which can be placed anywhere on land and sea to inland waterways:
Can you tell us more about the Smart Hubs that ELIRE is developing?
Luke: We have designed and engineered infrastructure solutions for the new wave of clean energy transition. When we looked at the ecosystem shift required across air, sea and land transportation as well as the transition to clean energy, we realised that there was a need for a deliberate focus on infrastructure applications that enables advanced technologies to be integrated into cities and ports, in order to transition to zero emission.
Our Smart Hubs enables the transition to clean energy application for refuelling vessels, bunkering energy and more. How is key— they are multipurpose, scalable and modular, movable and deconstructable, where they will save cities and ports valuable time and money to adopt new technologies.
Paint a picture of how you envisage your Blue Hubs (floating Smart Hubs) operating?
Luke: Probably the best explanation here is to use a recent case & bid application we have made with the Port of London Authority (PLA), and a large consortium of partners, to use our Smart Hubs on the river Thames in Greenwich as an energy hub, to refuel the Viking Cruise vessels (and other vessels).
Here we will use two of our Smart Hubs (connected 800sqm hexagon mega platforms). One will take a subsea cable from shore connection, integrating switch boxes on the hub to then connect using special equipment to the vessel, so that the vessel refuels and idles using clean energy rather than its diesel engines. The other hub will act as an operation centre and passenger terminal with a building structure set up.
We project each visit from a cruise vessel will save over 25,000 tonnes of CO2 just in this location alone. It highlights the potential for CO2 savings – taking into account the number of vessels and our plan for expanding to different locations, the Smart hubs will help offset millions of tonnes of CO2.
As well as an energy refuelling hub and a passenger terminal as described in our case with the PLA, the other main applications for a Blue Hub include cargo terminal and managing sea freight, bunkering of clean energy solutions (LNG, hydrogen, ammonia), marshalling for wind farm operations, water desalination, and seaplane & helicopter hubs.
What are the advantages of investing in an integrated solution at this time?
Luke: The predominant advantages of Smart Hubs (and floating options) are huge savings of time and money. That is in comparison to other development and construction options on shoreside and on land. Our hub solutions are already certified for multiple applications. We have the production lines established and are now ready to start production for installations.
Therefore, a hub solution can be installed and operational within six to nine months (depending on the feasibility report of the location), effectively giving ports and waterways solutions for immediate operations and adopting new technologies now.
The cost of the solutions is also significantly lower in comparison to redeveloping land side. Landside requires a large team of engineers, planners, designers, architects, etc that takes many years of just feasibility, then approvals, tendering, building & constructing etc. It all adds up to at least a 5 to 10 year project. And once this is decided there is no flexibility to change, take away or scale up. In contrast, our Smart Hubs can be deconstructed and relocated if required.
What are the challenges you are facing at the current time and how can potential investors support you?
Luke: Currently the venture is in a very healthy position, we are on the edge of converting our initial pipeline region (UK, Nordics, UAE & Med) and starting large projects like the river Thames project with PLA. This takes a dedicated team, so we need funds to add more team members.
Other than business development, some smart marketing and executing our go to market strategy, we require some further engineering development as we place our first prototypes in the water to ensure we have the blueprint for scaling.
Corporately we are establishing SPVs in each region of the pipeline. Here the SPVs will own the assets (hubs) and lease to clients over a period of time. We plan to raise £50-80M in each SPV in order to deliver x40 Smart Hubs in each region over the next 10 years, so our aim is 160 hubs by 2030+.
We know once we announce an anchor investor there will be a lot of momentum with investment, we have a healthy pipeline of interest from corporate VCs for example. And, of course, once we put a living prototype in the water the pipeline will grow very fast. We just need the first movers that can add value to the venture not only with cash but some resources and expertise as well.
Potential investors we are seeking at the Ltd level (not SPV) we would like to have a passion for purpose, a passion for zero emission and clean energy transition. We would like the organisations to also add value in regards to the pipeline, adding resources to deliver the projects, and a cash component for final developments and to execute the go to market.