Investment Themes

At the Intersection of Utilities and Technology

Overview

Electricity, from Generation to Transmission to Consumption, is rapidly changing. Innovation and consumer awareness are increasing at rates never before witnessed, yet the solutions are fragmented and compatibility is limited. We are positioning ourselves for the future, by investing in an energy services ecosystem.

Investment Themes

New Power Generation Economics

The cost and application of new electricity producing assets are changing. As cost decreases and renewable penetration increases, traditional thermal assets produce less. While the increase in renewable assets is welcomed, it introduces new challenges. Wind and nuclear sources now produce predominately night time electricity until mid-day when prices permit the use of natural gas-fired output. Balancing metrics required by the electric grid are lacking, and frequency disturbances are increasing as a result. The economic solution resides within a combination of variable producing assets coupled with economic automated commodity usage at the home.

Aging Transmission Infrastructure

The electrical system in the United States is aging. Electricity production and consumption patterns are changing, resulting in increased frequency disruption and challenges matching supply with demand. As renewable penetration increases within the supply stack, opportunities are surfacing in the areas of power generation optionality, electricity congestion investment, and frequency response.

Retail Delivery - Power and Gas

Whether within a business or the home, economically engaged consumers require energy. Therefore, energy delivery exists as a natural platform for product integration. A typical consumer may have over a dozen service providers to meet their respective needs. As markets mature, profit centers will consolidate to the benefit of the consumer. Teleios Commodities invests in power and gas retail service companies. Teleios will leverage its retail technology and operating expertise in order to minimize the cost of service. Streamlining the process and eliminating unwarranted expenses by middle marketers, controllable growth is achieved.

Commodity Usage Curtailment & Optimization

Commercial and residential consumers of electricity all possess the ability to optimize commodity consumption, yet often lack the education and systems to do so. Successful businesses have been born out of this opportunity. However, the end solution remains fragmented and serviced by multiple profit centers. Successful automation for commodity utilization yields below market rates for retail electricity and fuel. Empowering the retail consumer by creating the full economic experience is the next disruptive phase of electricity pricing.

Battery Applications & Demand Response

Installed battery technology costs $300/kWh, which equates to roughly a 25c per kWh residential rate at the home. Although experts anticipate cost declines down to $100/kWh by 2025, batteries remain expensive than other generation resources. However, the economic picture improves in a rising fuel price market. Generally, any producing or curtailment asset behind the meter lowers delivery charges. Battery applications will likely be part of the solution in the near future.

Commercial and residential consumers of electricity all possess the ability to optimize commodity consumption, yet often lack the education and systems to do so. The end solution remains fragmented and serviced by multiple profit centers. Successful automation for commodity utilization yields below market rates for retail electricity and fuel. Empowering the retail consumer by creating the full economic experience is the next disruptive phase of electricity pricing.

Rising Wires Charges

Regulated transmission and distribution charges continue to escalate as a result of large-scale projects designed to integrate renewable generation and replace aging infrastructure. Less than ten years ago the regulated portion of an electricity bill was 25%. In today’s market, while commodity prices have fallen, regulated charges are more than half of a consumer’s expense. Transmission rates are forecasted to increase over the next few years, encouraging more consumer participation to reduce commodity usage at the meter. The combination of behind the meter producing assets and economic commodity utilization is the future.

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