Image a postwar industrial constructing in a West Sussex city, between London and Brighton. It was 2013, the Conservative coalition authorities led by David Cameron requested colleagues to eliminate the ‘inexperienced crap’, three years after pledging to be the ‘greenest’ authorities ever.
When chief government Phil Caldwell joined Ceres Energy (LON:CWR) that yr, it was a £35 million-market cap firm listed on the smaller AIM subsection of the London Inventory Change (LSE).
Practically twenty years later, and the Horsham-based gasoline cell firm on Foundry Lane was admitted to the primary market of the London Inventory Change in June 2023. It made the index of high 250 mid-cap firms for six months earlier than being nudged out, then readmitted in September 2024, holding its spot till final month. It’s now almost ten instances bigger than when it first listed, with a market capitalisation of £320.8m.
Ceres was one of many first cleantech firms to attain the celebrated FTSE 250 index. It stays one in every of 4 purely different power firms on the LSE primary market, excluding trusts.
Right now, it specialises in licensing electrolysers for inexperienced hydrogen energy tasks, which convert renewable electrical energy into the low-carbon gasoline.
“Inexperienced hydrogen is zero carbon at manufacturing,” Caldwell mentioned in an interview. “When you’re combusting hydrogen, the one byproduct’s water.”
Caldwell mentioned Ceres is projecting income this yr of between £50m and £60m; its market has grown ten-fold in 12 years. In 2021, it raised over £180m, “at a time the place public markets have been working rather well” to plough into electrolysers.
“We’ve grown lots,” he mentioned. “We initially targeted on the fuel-cell facet, which is the place you soak up hydrogen or pure gasoline, and convert that into electrons for energy era. In 2019, we began investigating electrolysis from inexperienced hydrogen as a result of we noticed that pattern coming.”
Hydrogen has taken off as an business previously 5 years with a flurry of hydrogen firms itemizing on the inventory markets, because the know-how gained maturity.
In accordance with Caldwell, the urge for food for power safety that boomed within the wake of the power disaster was the impetus.
“When you have a look at the precise worth of hydrogen companies and the actual pleasure on this, it was throughout 2020, 2021,” mentioned Caldwell.
Following Russia’s conflict on Ukraine, “you had power safety points abruptly overlapping with decarbonisation points”, he mentioned.
“You had this rising of a few agendas for as soon as, which comes as the right storm,” he mentioned. “You see this trillion-dollar multinational market alternative simply become visible.”
‘Reversible’
© Provided by Ceres EnergyThe UK hydrogen business is estimated to be a £7bn annual market worth by 2030 and create 30,000 new jobs. Caldwell cited a $1.4tn ‘block alternative’, globally, 50% of which might be for industrial decarbonisation.
“If you wish to decarbonise society, you electrify as a lot as you’ll be able to with inexperienced electrons, however that may’t get you that remaining 20% that you just want for internet zero,” Caldwell mentioned.
“You’ll be able to’t electrify every little thing, you want inexperienced molecules, and, the way in which a strong oxide cell works; it’s really reversible.”
Ceres is working with Shell (LON:SHEL) on a ‘demonstration’ hydrogen manufacturing facility, after being awarded a contract final June to construct a pressurised strong oxide electrolyser module at Shell’s analysis facility in Bangalore.
“Shell’s curiosity is by a mixture of functions like artificial fuels,” mentioned Caldwell. “They need to decarbonise fuels like aviation gasoline and even simply petrochemicals. They’re thinking about inexperienced ammonia.”
The corporate has additionally labored with German engineering large Bosch and Japan’s Denso to license electrolysers to provide inexperienced hydrogen, an space the place Caldwell mentioned its know-how could make financial savings of “about 25%” of opex; in metal and artificial gasoline manufacturing.
© Provided by Ceres Energy‘Tailored’
Ceres operates by way of a cross-border licensing mannequin, “the place we see increasingly of the protectionism and tariffs going up”, mentioned Caldwell.
“At Ceres, we imagine in decarbonisation at scale and at tempo, and if you wish to do this, it’s a must to scale globally,” he mentioned. “So we developed the know-how, and we assist companions now constructing factories in South Korea, in Japan, in Taiwan, or in Germany.”
Over the previous ten years, Caldwell defined, the corporate has “tailored” to deal with the wants of various markets, significantly in “arduous to evade sectors”. It has a pilot manufacturing website within the UK however licenses internationally.
“It’s a must to consider this firm as a know-how enterprise,” Caldwell mentioned. “Our manufacturing functionality… is in-built the identical elements of the world the place you’ll anticipate: Japan, Korea, Taiwan, and China; leaders in EVs, batteries, photo voltaic panels. They’re now shifting into hydrogen manufacturing as properly.”
Ceres has set its sights on the worldwide marketplace for hydrogen the place, “globally, you’re seeing a variety of funding and a variety of nationwide coverage going into creating hydrogen applied sciences”, Caldwell mentioned.
He mentioned most of its licensees at the moment are abroad. India is one other market the place he described the chance as “big”, because it seeks to “leapfrog” standard power.
“They’re importers of standard fossil-based power and should you’ve received a variety of renewables… it’s a very highly effective progress engine for GDP,” he mentioned.
‘Function’
© Provided by Ceres EnergyCaldwell attributes the expansion of Ceres, which stays primarily based in the identical constructing it was when he joined greater than a decade in the past, to its “core know-how”, and “useful individuals”.
It has a 500-strong staff, a mixture of “primarily scientists and PhDs, and engineers”, he mentioned; including that individuals come to work at Ceres due to “function; it’s a giant motivator”.
Seeking to the longer term, Caldwell mentioned that Ceres seeks to safe “extra licensed companions, extra progress” and “continued funding”.
“We’re on a progress trajectory, we’ve received our first manufacturing plant in South Korea approaching subsequent yr,” he mentioned. “It takes us full circle, with royalties coming into the enterprise and actually proves out our enterprise mannequin.”
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