tepeo secures investment from Norway’s Bonheur ASA

Latest tranche follows investment from UK’s Clean Growth Fund

tepeo, the British clean technology company that has developed a low-cost, easy-to-install Zero Emission Boiler (ZEB®), has closed a UK £3m investment round with additional investment from Bonheur ASA, a Norwegian-listed investment company, which has significant interests in the renewable energy and maritime sectors. 

This investment reflects Bonheur’s interest in the domestic heating sector and builds on an important element of their strategy to seek out investments in innovative and ambitious companies to strengthen existing engagements and expand into new, but still related, business areas.

Bonheur’s investment in tepeo follows the investment made by the UK venture capital fund, the Clean Growth Fund, in July 2021. It coincides with this week’s publication of the UK Government’s Heat & Building Strategy. This sets out the UK’s ambitions to decarbonise heating and encourages homeowners to replace their gas boilers with low carbon alternatives, such as tepeo’s Zero Emission Boiler (ZEB®).

The 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 (See Notes to Editors for more information). 

Johan du Plessis, founder and CEO of tepeo and inventor of the ZEB®, said: “For Bonheur to invest in tepeo is a huge boost of confidence in our work, and underlines our belief that the ZEB will be a serious game-changer in the domestic heating market.  It is a cheaper and simpler alternative to heat pumps, and far easier to install.” 

“Whilst it might not be immediately obvious, there are synergies between tepeo and Bonheur as they are a major investor in UK and European onshore and offshore wind. The National Grid paid over £282m in 2020 to curtail the wider wind industry’s renewable energy generation – i.e. to stop wind turbines from generating. The more storage and flexibility we can embed in the electricity system, the more we can avoid renewable energy generation going to waste. Thermal storage technologies like the ZEB support renewable generation, driving down the cost for everyone and speeding up the decarbonisation of our planet. They will be an essential enabler for the UK to achieve a 100% low carbon grid over the next 10-15 years.”

Lloyd Butterworth, Investment Manager at Fred Olsen & Co., the company being in charge of the day-to-day operations of Bonheur, said: “tepeo’s ZEB technology is impressive, its market proposition is strong and with the Clean Growth Fund alongside as a co-investor, we are excited about tepeo’s future growth potential. Johan and his team seem well positioned to establish a sizeable share of the UK and international heating markets.

We have been particularly impressed with the ZEB’s ability to effectively load shift, moving household electricity demand away from its most expensive and constrained hours of supply. The ZEB is software-enabled hardware, designed with the end user in mind. tepeo’s offering appears particularly compelling because it requires minimal end user interaction, with the ZEB programmed to charge and discharge in optimal fashion, both for cost and carbon-saving.”

Oyvind Engesronning, Vice President Finance of Fred. Olsen & Co., said: “This investment fits well with Bonheur’s strategy to continue to expand their footprint related to the renewable energy value chain, across technologies, services and products. Leveraging the industry knowledge and network throughout Fred. Olsen-related companies, Bonheur provides an active and long-term ownership perspective with a view to support tepeo reach its praiseworthy ambitions to decarbonise domestic heating.”

Stephen Price, Investment Director at the Clean Growth Fund, said: “The funding of innovative solutions which can address the challenges of achieving Net Zero requires committed investors to pool resources and work together.  For that reason we’re delighted and excited to be working with Bonheur to support tepeo as they tackle the problem of decarbonising domestic heat.”

tepeo has carried out successful trials of its ZEB in a range of house types and is expected to launch its first commercial product by the end of 2021. The company is initially targeting all types of dwellings of up to three bedrooms with water cylinders but will market future models of its ZEB to larger homes and those with combi-boilers.

The ZEB will cost roughly half the price of a heat pump and, as its manufacture is scaled-up, the cost of the ZEB will drop and be competitive with the lifecycle cost of a typical gas boiler.

Notes to Editors:

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 100% 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 using Machine Learning to accurately forecast individual heat usage patterns for each home.

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 demand-side response (DSR) flexibility services with the potential for ZEB owners to directly benefit from the value created.

Additional Information

About Bonheur ASA

Bonheur ASA is an investment company with origins from 1848 and listed on the Oslo stock exchange in Norway since 1921. Fred. Olsen & Co. is in charge of the day-to-day operations of Bonheur. Through various Fred. Olsen-related companies, Bonheur’s core interests have traditionally been linked to the maritime and energy sectors, and with a proven history of being early adaptors into new trends, such as being an early mover within onshore and offshore renewable energy in the 1990s. Bonheur continuously evaluate investment opportunities with a view to strengthen existing engagements and expand into new, but still related, business areas, seeking innovative and ambitious companies within renewables, energy storage, travel and leisure, circular economy, maritime and shipping, and others.