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Powering the Next Revolution: Energy as a Service

Jon Brown Jon Brown, Stockhouse
3 Comments| April 5, 2019


Click to enlargeThe power sector may not have been the most exciting for investors, but recent developments have set the foundation for a looming revolution that will keep the industry on the radar of many.

Power systems haven’t changed much in the past 150 years since the inventions of Nikola Tesla. He was such a pioneer, that part of Burlington Street in Hamilton, Ontario was renamed Nikola Tesla Boulevard. Why? He was deeply involved in the project that constructed Ontario Hydro’s Niagara Falls electric hydro dam that distributes power to the city of Hamilton. The city uses the virtually the same technology today that was installed back then.

Now there is a new means of generating power that is cheaper and more efficient than previous methods and has a global application. The one crux to this, is that these systems need reliable management.  One Company is providing that key piece for the “internet for the unconnected” puzzle.

Clear Blue Technologies International Inc. (TSX:V.CBLU, Forum) is a small-cap early stage Company delivering advanced smart off-grid technology and management services that delivers 24 / 7 remote control for the management and control of solar and hybrid power systems internationally.

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The Company sells an integrated hardware and cloud software solution that allows mission critical devices to be installed anywhere, powered by clean energy. These systems include a smart controller, an integrated communications network and the Illumience Cloud software, which enables full remote control and management over the internet.

Its patented off-grid technology is being used to power and manage thousands of solar, wind and hybrid-powered systems, including street lights, telecom systems, security and other Internet of Things (IoT) devices, in 35 countries worldwide, 24 US states and eight Canadian provinces, all remotely managed 24/7 by Clear Blue.

Before getting into the finer points of CBLU’s business, operations and tech, a little more context is needed:

Technology revolution

In a world where the latest big IPOs from Lyft and Uber indicate things are changing, it’s important to know how. We are on the verge of a revolution in power generation. For an example, look to the telecom industry. Going back 30 to 40 years, every phone in the house was a wired phone on a wired line. In emerging markets, less than 10 per-cent of homes even had a phone at the time. During this time there was also a monopoly over the wired infrastructure, which was dominated by AT&T until antitrust laws broke it up. Mobile phones came along and gone were the restrictions on where people could talk, then with cellular networks, wireless took over, people could take their phones anywhere, use the internet anywhere. Rural blind spots via satellite are being eliminated and people are ditching their landlines and bringing in upwards of four mobile phones into their homes. Multiple providers from Virgin, Verizon, and others have also come onto the scene.

Looking ahead to the next five to 10 years, Clear Blue Co-founder and CEO Miriam Tuerk explains to Stockhouse Editorial in an interview that the power grid is about to experience the same revolution.

The reason is because of solar power. Not because it’s green, it’s about making money. Solar is foreseen as a game-changer compared to the ways of old - massive hydro electric dams, nuclear generating station or gas / coal firing systems – they are such big systems that they need to be central with a lot of cables to distribute that power. Meanwhile, a single solar cell is just two inches square. 40 cents spent on solar plugged into the grid costs 60 cents to distribute. Now if 40 per-cent is spent generating energy and 60 per-cent is distributing that energy, the next logical step is to put that generation at the end of the power line rather than the central location. Instead of costing $1 at a house, that 40 cents of solar power will cost … just 40 cents. Putting the opportunity for distributed off grid (wireless) power into the hands of the people eliminates the other 60 per-cent of infrastructure, cabling and wiring. However, to run a cellular wireless telecom network, be it Telus, Rogers, or Bell, they need to be able to manage that network, to ensure the cell signal is active, add bandwidth where necessary to ensure service. It becomes even more crucial when providing off-grid wireless power. This is where Clear Blue comes in.

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Delivering the next generation of power

There are a lot of components to providing this solution. Good battery technology is essential, as are solar panels, whose Click to enlargecosts have been dropping. When the Company began, a panel cost around $1,400, but now cost around $120. Clear Blue brings the “secret sauce” to managing this distributed wireless power for mission-critical systems remotely. This isn’t garden lights or cosmetic fixtures, the Company is focused on industrial business IoT infrastructure: railway breaking devices, oil and gas pipeline sensors, security cameras, street lights, telecommunications towers. The Company is providing energy as a service, delivering clean, managed wireless power to meet the global need for low-cost off-grid systems.

Clear Blue’s device is a small grey box roughly the size of a tissue box (pictured at right) that operates as the brains of any off-grid system. It uses control and logic, takes solar energy from panels, manages the life of the battery and powers the load. Every device shipped to each client in the 35 countries has systems installed. The second it is plugged in, it is ready to go. No software or communications to install, everything is fully-integrated and connects back to Clear Blue’s cloud-based management system, which is operated 24/7 by the Company.

Not limited to any vertical or geography

Of particular interest to investors is that Clear Blue has proven its business is successful. It is already functional in the mature Western market (specifically North America) and emerging global markets. This doesn’t exclusively mean bringing off grid power to the wilderness of overseas continents. Looking close at Toronto’s Koreatown district (pictured below in center), the cost of power across the sidewalk was quoted at $35,000 and Clear Blue delivered this infill infrastructure for a fraction of the cost.

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Clear Blue’s market breaks down as such:

  • Geographically:  50 per-cent in Developed markets and 50 per-cent in emerging markets (North America and Africa 90 per-cent of this business)
  • Vertically:  50 per-cent dedicated to street-structure (lighting, security, smart city)  and 50 per-cent toward telecom, where the focusing in growing this market and is 90 per-cent of its revenue
 
Telecommunications: once again a huge and growing opportunity

Most large cities have 3G / 4G / LTE cell towers and two major rollouts coming in the next few years will give this a drastic overhaul.

The first is the Telecom Infra Project, founded by Facebook / Deutsche Telecom/ Intel / Nokia. The aim is to bring internet connectivity to the next billion people in the world. Closer to home, a recent announcement from Canadian Prime Minister Justin Trudeau declared that by 2025, 100% of Canadians will have high-speed internet.

For TIP, the reason why the project, which now has more than 400 companies as members, needed wireless power is due to the differences in generation from grid versus off-grid power generation.

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This chart, via Facebook, found that 20-30 per-cent of the cost of a telecom site is generating power. The most efficient means was determined to be the very option Clear Blue specializes in - smart off-grid operations management.

After assessing the other major telecom companies, Facebook could not find anyone who could build a smart off-grid capability until they found Clear Blue. The Company was selected as a partner with other TIP member to further deliver smart off-grid power and enable the huge economic and social benefits of bringing the next billion people onto the Internet.

The second is a movement by Telefónica, one of the five biggest telecom companies in the world, dubbed “Internet para todos” (internet for all).  Clear Blue has delivered the initial systems to this program which aims to bring 100 million people in South America onto the internet in the next few years. Together with other partners, they are pushing a large rollout of telecommunication tech into the marketplace.

One of the keys to this power renaissance is 5G, the latest generation of cellular mobile communications. What may not be widely understood, is that once implemented, 5G is more similar to a Wi-Fi hotspot than a phone tower. For example, in downtown Toronto, many poles would be needed down all of the streets for these 5G spots – they’re all wireless, but need power to their poles, and that’s where the high-costs of 5G come in.

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(Image via Telefónica.)

Leadership and recurring revenue

With an electrical engineering background, CEO Tuerk brings traction from the telecom industry to the Company. In addition, she has a significant background in ecommerce, having built major parts of Canada’s electronic banking infrastructure, and later helping advancements in big data analytics and open source cloud computing. She was president of the Canadian division of BCE Emergis, publicly-traded sister company of Bell Canada. Through her time spent there, the company helped the Canadian banks more from a time when most people did their banking at a local branch to telephone and then internet banking.  Of course, now it is done on a smartphone, once again back to the key wireless infrastructure so critical to today’s economy.

Click to enlargeThe other two co-founders also have similar backgrounds. One was involved with cloud mobile computing and has a background with Apple Inc., the other boasts a history with power generation extending 25 years.

CEO Tuerk’s experience has helped pave Clear Blue’s path into prime time. The Company went public last summer and has proven its technology systems in the field for the past five years.

Now the Company’s leadership sees this as the time to scale and execute. Revenue is growing significantly, roughly doubling every year. Clear Blue recently reported 283 per-cent growth in Q3 2018. It is also reaching out to cross-over from research and development into scaling and production, manufacturing and sales, starting to grow gross margin and grow profits.

The Company expects to double its revenue again this year and is working hard to be profitable by next year. In March 2019; it closed private placement of nearly $2.7 million, while also securing a $1 million working capital line.
 
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In terms of units deployed, every system sold has a recurring revenue component to business. CEO Tuerk explained that the plan over the next 18-24 months is to get to a point where about 20 – 30 per-cent of revenue will be recurring, which has a much higher value proposition from a customer prospective, because it is delivering energy as a service, not just the hardware. With a solid business team behind the Company, it also recently saw another of the patents from its portfolio granted. Farther down the line, leadership also sees opportunities in mining, transportation, oil and gas.

From installing smart off-grid technology to install solar and wind powered street lights for Logintek Morocco to Mississauga, Ontario. Clear Blue Technologies International Inc. has a proven system and business model that is already growing and ready to capitalize on exactly what the next power revolution needs.



FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.




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Comments

jrj90620
Really enjoyed this article.Seems like a company with a good future,assuming there aren't a lot of competition from other companies,that may be larger and have more resources than Clear Blue.Of course Clear Blue could be taken over at a premium.
(19)
April 15, 2019

misterlaser
I don't see any reason why a battery management controller needs to be connected to the Internet. It just seems like an excuse to feed more personal data back to Facebook, Google, Microsoft et. al. and I think consumers will balk at it.
(0)
April 10, 2019

Marn345
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(0)
April 7, 2019

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