Smart Energy Finances: Fulcrum exits smart metering as Badger Meter reports robust smart water demand Close-up Of A Stacked Coin Measuring On Kilowatt Electricity Meter

April 21, 2023 Editor

Leading this week’s finance radar: UK utility services provider Fulcrum has suspended its smart metering operations after reporting volatile market conditions; at the same time, Badger Meter in the US has reported a robust demand environment for their operations, citing their acquisition of smart water company Syrinix as contributing to year-over-year growth.

Also on the radar are announcements from the Asian Development Bank and the Global Energy Alliance for People and Planet of a new fund, aiming to drive clean energy projects in South and Southeast Asia.

Finally, in a partnership to develop hydrogen hubs and drive down green hydrogen costs, three utilities in the UK, alongside Guidehouse and Pembrokeshire County Council, are partnering on a feasibility study that will involve revenue stacking and financial optimistion of electrolysers.

Fulcrum exits smart metering market

UK utility services provider Fulcrum has decided to exit the smart metering market.

The announcement was made in the company’s trading announcement for the financial year ending 31 March 2023.

According to Fulcrum, the smart metering market is no longer considered to be an attractive opportunity or area of the market for the Group to operate in because the market would ‘hold little area of operational opportunities’. They highlight that since the company’s fundraise in December 2021, the UK energy market has experienced ‘significant volatility’, which informed their decision.

The exit is being looked at as opening new space to investigate “more attractive opportunities”.

Fulcrum’s announcement comes in as the smart meter suppliers in the UK have come under fire for reportedly forced prepayment meter installations and not meeting smart meter rollout targets.

This led to a warning being issued by the Ofgem CEO after the regulator banned forced installations for highest risk customers.

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Badger Meter reports robust demand environment

On the other side of the pond, the demand environment for metering is quite strong, at least according to Q1 reporting from flow metering provider Badger Meter.

The US-based company, which develops flow measurement, water quality and control products for water utilities and municipalities announced strong orders and results in their First Quarter 2023 Highlights, released yesterday.

The company reported “robust demand environment continued with strong order” – $159.1 million in total sales, up 20% than the prior year, operating profit increases of 30% year-on-year and record backlog despite all-time high sales performance in the quarter.

Kenneth C. Brookhorst, the company’s chairman, president and CEO, commented on these record financial results and how it signals the “favourable industry fundamentals, healthy demand for our innovative smart water solutions, and outstanding execution…”

The release of the results follows the company’s acquisition of Syrinix in their Q1, which provides intelligent water monitoring solutions – such as high-frequency pressure monitoring and leak detection within water distribution and collection networks – for $18.3 million.

The company’s utility water sales increased 20% year-over-year, claiming robust adoption of their cellular AMI solution. The acquisition of Syrinix, they state, contributed significantly to the year-over-year sales increase.

Added Bockhorst: “Our expanding portfolio of end-to-end smart water offerings…and our stellar balance sheet supports our capital allocation priorities including value-added, disciplined acquisitions.

“Healthy demand for these innovative and trusted offerings…give us confidence in our long-term growth outlook as we help to preserve the world’s most precious resource.”

Catalytic capital for Asian clean energy projects

The Asian Development Bank (ADP) and the Global Energy Alliance for People and Planet (GEAPP) have announced a new capital fund for clean energy projects in South and Southeast Asia. Eligible project countries include India, Indonesia, Vietnam, Pakistan and Bangladesh.

The fund was announced during the World Bank Spring meetings and sees GEAPP provide an initial $35 million in what they are calling catalytic capital, which will be established and administered by ADB.

The fund aims to address the challenges of climate change and energy access and transition in Asia and beyond.

Priority programmes will include supporting Battery Energy Storage System (BESS) in Vietnam, and the early retirement of coal-fired power plant initiatives in Indonesia.

Opportunities will be supported through technical assistance, grant components for investment projects, and blended concessional instruments to crowd-in additional capital.

“There are great opportunities to open up clean energy access and transition while addressing climate change yet in 2021 just 8% of financing for energy transition technologies went to low- and middle- income countries (LMICs) – that’s the lowest share in 10 years,” said Simon Harford, GEAPP’s chief executive officer.

Harford added how the partnership with ADB is aimed at meeting critical climate goals through new and additional capital that will be “mobilised at a ratio of at least 15x at portfolio level to encourage the use of clean energy in the region, underpinned by practical innovation, scalable solutions, and knowledge sharing.”

The new fund was formalised at a signing ceremony in Washington DC attended by ADB’s managing director, general Woochong Um; GEAPP’s chief executive officer, Simon Harford; and GEAPP chief partnerships officer, Sundaa Bridgett-Jones.

Simon Harford (left) and Woochong Um (right) in announcing the fund. Image courtesy GEAPP.

#ICYMI: Revenue stacking and financial optimisation of electrolysers

In an effort both to decarbonise heat and transportation as well as to reduce gas and electricity network operating costs, three utilities in the UK have partnered with Guidehouse and Pembrokeshire County Council.

Specifically, Wales & West Utilities, National Grid Electricity Distribution and RWE are partnering on a feasibility project to investigate opportunities for co-locating electrolytic hydrogen refuelling stations with heat demand.

The aim of the partnership is to establish hydrogen hubs and determine whether hybrid hydrogen and district heating systems can support the decarbonisation of transport and heat at the lowest cost for customers and the network.

Part of the partnership will see the stakeholders explore revenue stacking which, according to Revenue stacking for behind the meter battery storage in energy and ancillary services markets, entails participating in multiple markets to increase revenue.

They will also explore financial optimisation of the electrolysers, integrating the response to multiple energy demands and facilitating efficient infrastructure provision.

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Cheers,
Yusuf Latief
Content Producer, Smart Energy International