UK Clean Growth Fund makes first investment in low carbon heating sector
Clean Growth Fund leads £2.5m investment round in tepeo to support commercialisation of its Zero Emission Boiler for the domestic heating market
tepeo, a British clean technology company that has developed a low-cost, easy-to-install low carbon boiler, has secured a £2.5m investment in a round led by the UK venture capital fund, the Clean Growth Fund. It is the Clean Growth Fund’s first investment in low carbon heating, a sector that is set to grow significantly over the next decade as homeowners are encouraged to replace their gas boilers with low carbon alternatives.
Lord Callanan, Energy Minister at the Department for Business, Energy & Industrial Strategy, welcomed the Clean Growth Fund’s investment in tepeo: “If we are to meet our bold commitments to tackle climate change, we must cut carbon emissions from heating our homes and workplaces, but we are determined that affordability and fairness are placed at the heart of our transition.”
New technology is key to driving that low-carbon cost-effective transition and the Clean Growth Fund is allowing British innovation to flourish as jobs and investment opportunities are created.
“Investing in tepeo, with their Zero Emission Boiler, shows how the Government and private sector-backed Clean Growth Fund is helping to provide affordable green alternatives for households when the time comes to replace their old gas boilers”
tepeo’s Zero Emission Boiler (ZEB) is a drop-in replacement for a gas or oil boiler that similarly heats water to any set temperature between 35-80°C and works with any thermostat. It has been designed to be affordable while supporting the transition to a low carbon electricity grid.
Installing a ZEB involves little or no disruption for the homeowner as there’s no need to change any aspect of a home’s existing central heating system; it will use the same radiators, same pipework and same insulation. Plumbing-in a ZEB and the electrical connections are straightforward tasks for qualified heating and electrical engineers.
The ZEB has a ceramic core which acts as a heat battery, with smart tech that controls when it is charged up using highly efficient electric resistive heating elements. The heat can then be released, as needed, in a controlled manner using tepeo’s patent-pending heat transfer technology. This means that the ZEB can decouple electricity demand from heating demand and take advantage of green and/or variable (“time-of-use”) electricity tariffs. The charge cycle of the ZEB is automatically optimised to minimise cost and carbon.
The ZEB is therefore a flexible asset and tepeo has developed software which can aggregate a fleet of ZEBs at scale which could then provide grid flexibility services with the potential for ZEB owners to directly benefit from the value created.
Johan du Plessis, founder and CEO of tepeo and inventor of the ZEB, said: “We have carried out successful trials of the ZEB in a range of house types, and with the welcome investment from the Clean Growth Fund, we are in a strong position to launch our commercial ZEB in the autumn and extend our product range. We are initially targeting all types of dwellings of up to three bedrooms, but we intend to market future models to larger homes too.”
“Importantly, the ZEB will cost roughly half the price of a heat pump and we are confident that as we scale-up our manufacturing, the cost of the ZEB will drop and be competitive with the lifecycle cost of a typical gas boiler, so making the consumer’s decision to replace their gas boiler that much easier.”
Stephen Price, Investment Director at the Clean Growth Fund, said: “Given its ease of installation and low-cost, tepeo’s ZEB has the potential to take a massive slice of the emerging low-carbon heating market. As the pace of heat decarbonisation increases, the Clean Growth Fund will support tepeo’s commercialisation and market entry, and its ongoing product development.”
The ZEB that will be launched later this year is a replacement for a regular or system boiler which works for homes with a separate hot water tank. tepeo intends to develop two other versions of its ZEB: a ‘combi’ version that does not require a separate water tank and a larger capacity ZEB suitable for larger homes.
The Clean Growth Fund was advised by the law firm, Shoosmiths.
For further information:
Clean Growth Fund (www.cleangrowthfund.com)
Beverley Gower-Jones, Managing Partner: firstname.lastname@example.org
Stephen Price, Investment Director: email@example.com
Miranda Barham, Taylor Keogh Communications: 07899 030304 / firstname.lastname@example.org
Paul Taylor, Taylor Keogh Communications: 07966 782611 / email@example.com
Notes to Editors:
Clean Growth Fund
- The Clean Growth Fund was launched in May 2020, with cornerstone investment from the UK Government’s Department of Business, Energy & Industrial Strategy (BEIS) and CCLA, one of the UK’s largest charity fund managers with £13.6 billion (as at 30 June 2021) of assets under management. In June 2021, Strathclyde Pension Fund, one of the two biggest local government pension schemes in the UK, committed £20m to the Clean Growth Fund.
- The Fund is targeting the UK’s most promising early-stage “clean growth” companies that are pioneering carbon emission reductions in the areas of power and energy, buildings, transport and waste. Its remit is to drive superior financial returns for investors and accelerate the development and commercialisation of clean growth technologies in the UK – leading to the creation of new and skilled jobs across the country and contributing to the UK’s efforts to deliver net zero by 2050.
- To date, the Clean Growth Fund has invested in Indra, the UK smart charging technology company and in Piclo, which is enabling network operators to procure flexibility services that help balance the grid from technologies such as electric vehicles and battery storage.
- tepeo is based in Maidenhead, Berkshire and to date has been funded by the company’s directors and private, angel investors. It won the 2020 EDF Pulse Innovation Challenge ‘Public Favourite’ award, was a member of the inaugural ‘Net Zero’ cohort of tech companies selected for Tech Nation’s growth programme and has benefited from the support of one of the Energy Systems Catapult’s Innovation Support Platforms.
- tepeo’s hardware is supported by advanced IoT functionality and optimisation algorithms as well as integration with a wide range of applications and input data including weather, pricing and carbon data, demand forecasting models and energy tariff information. Importantly, this ‘smart’ functionality allows ZEBs to be optimally charged autonomously without any user interaction, based on a combination of electricity cost, carbon intensity and the quantity of heat predicted to be drawn from the unit. tepeo uses machine learning to develop a heat demand model for every dwelling where it’s installed. The ZEB is fully autonomous however there is an app for consumers by which they can control the unit should they wish to do so.
- There are dozens of sensors in the ZEB feeding data back, in real time, to a cloud-based IoT platform providing remote control, diagnostics and predictive maintenance. This, coupled with the lack of any necessary combustion processes, means that the ZEBs are expected to be extremely reliable with very low maintenance requirements and lifetimes of up to twice that of gas boilers.