Sustainable Future SUSTAINABLE FUTURE CERTIFICATE 2 Investment - - PowerPoint PPT Presentation

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Sustainable Future –

SUSTAINABLE FUTURE CERTIFICATE

Investment Case

➢ Climate change, a growing world population and an increasing world’s electrification have started to spark major changes in our living habits and the adoption of sustainable behaviors ➢ Sustainable development is defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” ➢ Our Sustainable Future theme will capture the growth (estimated above 20% on average) in all industries benefiting from the sustainable development of our planet ➢ We invest in pure players in renewable energies, energy storage, smart transportation, water & wastewater treatment, the digitalization of energy systems and integration of smart technologies

Details

✓ Issuing bank: JP Morgan, Calculation agent: JP Morgan ✓ ISIN: XS1668108175 (USD), XS1668108506 (EUR) ✓ Currency: USD, EUR ✓ Fees: 1.5% management fee + 15% performance fee, high water mark ✓ Bloomberg tickers: JMLNARSF (USD), JMLNARSE (EUR)

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…and it’s affecting our lives in many different ways

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Climate Change Is A Fact…

To Survive, Human Beings Are Reacting To That Change

Adaptation Mitigation

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&

Technology is the Answer!

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Fossil Fuel Scarcity? Growing Water Needs? Increasing Electricity Demand? Food Shortage? Extreme Pollution? Traffic Congestion?

Energy Storage Algea Biofuel Micro-Irrigation Hydrogen Train Hyperloop Smart City

Water & Wastewater Treatment Solar & Wind Energy Storage Smart Agriculture Smart Transportation Smart Grid Smart Cities & Buildings Energy Efficiency

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Source: Marketresearch, Zion Market Research, Allied Market Research, Grand View Research, Transparency Market Research, Global Market Insights, Research and Markets, Hexa Research

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A $3.6 Trillion Market By 2024

CAGR 2018-2024

Electric Vehicles ($464B) Solar Energy ($633B) Stationary Energy Storage ($10B) Smart Transportation ($285B) Smart Buildings ($62B) Smart Agriculture ($21B)

38% 34% 23% 14% 22% 24%

Wind Energy ($170B)

13% 4.3%

AtonRâ Sustainable Future

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Water Treatment ($664B)

4%

Li-Ion Batteries ($80B)

17%

Energy Efficient Devices ($1T)

22.3% 12%

Drivers

Declining prices for Renewables and Storage General environmental concerns Rising Electricity demand Depleting natural resources Growing Population

Risks

Lower Fossil fuel prices Fiscal Austerity Unsupportive Regulation

Hydrogen ($206B)

6%

~1800 AD

Energy & History

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➢ Our society has historically not been relying on fossil fuels ➢ The renewable energy transition is already on its way

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Sustainable Energy Era Energy Used is Clean and Renewable

Fossil Fuels Era

?

When? FUTURE

PAST

What shape will have that transition?

200 years

Question: How much of total world electricity consumed is produced by wind and Solar PV combined?

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A B C D 5% 15% 25% 35%

Power Generation: A Clear Shift Towards Solar and Wind

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2050

Coal Gas Oil Nuclear Hydro Wind Solar Other

1970 1980 1990 2000 2010 2020 2030 2040 0% 100% 90% 80% 70% 50% 40% 60% 30% 20% 10%

NEO 2018 power generation mix Historical world power generation mix

& 48% solar and wind 64% renewables by 2050 29% fossil fuels by 2050

Power Generation Mix

Source: Bloomberg NEF; IEA

➢ If we continue to deploy PV panels at the same pace, PV power capacity will exceed today’s total power needs (incl. coal, gas, oil, etc.) within 10 years!

1'000'000 2'000'000 3'000'000 4'000'000 5'000'000 6'000'000 7'000'000 8'000'000 9'000'000 10'000'000

PV - Installed Capacity (MW)

Total Capacity (2017): 7’343’000 !

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Solar Installations Taking Off

Source: IEA

The take-off is now!

CAGR18-29: 30%

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Solar: Many Different Technologies And Applications

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Solar: Innovation Sparks Cost And Yield Efficiencies

➢ Large variety of PV cells type: crystalline, multijunction, thin-film, organic, etc. ➢ Growing cell efficiencies for all types ➢ While efficiency grows, costs continue to decline ➢ Cumulative production x 2 → Price -24%

Solar Cell Efficiencies

Source: Fraunhofer ISE

Mimicking Moore’s Law

Solar cells into roof tiles Solar cells into building’s facades ✓ Improved look compared to traditional solar panels ✓ Improved overall cost of roof + PV modules ✓ Maximize exploitation of solar energy on buildings ✓ Transparent cells perfectly integrates into architecture

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✓ Inflexibility ✓ Infrastructural Problems ✓ Network Congestion ✓ Lack Of Transparency

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Electric Grid Needs A Major Upgrade

➢ The traditional grid is facing a multitude of challenges that can be outlined in the following categories:

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By 2040, 11B smart appliances are expected to be deployed in the smart grid worldwide

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Smart Grid: Flexibility, Efficiency, Reliability

Provide 185 GW of system flexibility and save $270B in electricity infrastructure.

A network of integrated microgrids

Sensors: detect disturbances and can signal for areas to be isolated Processors: execute special protection schemes in microseconds Smart appliances: can shut

• ff in response to frequency

fluctuations Demand management: use can be shift to off-peak times to save money Generators: energy from small generators and solar panels can reduce overall demand on the grid Storage: energy generated at off-peak times could be stored in batteries for later use

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Smart Grid: A Wide Array Of Technologies

Smart Appliances Energy Management Systems Phasor Measurement Units Transmission Enhancement Renewable Generation Integration Distribution Grid Management Advanced Metering Infrastructure

Question: How many cigarettes are we smoking per year by breathing Geneva air?

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A B C D 0.7 7 70 700

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1 cigarette = PM2.5 of 22 μg/m3

Air Pollution: Affecting Our Everyday Life

Air Pollution Location Equivalent in Cigarettes per Day Shenyang (worst recorded) 63 Hadan (avg.) 5.5 China (avg.) 2.4 Geneva (avg.) 1.9 Europe (avg.) 1.6 USA (avg.) 0.4

Source: Berkeley Earth

Burning of Fossil Fuel Agricultural Activities Exhaust from Factories Mining Operations Indoor Polluting Products

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Causes Solutions

Green Mobility Energy Savings Reduce, Reuse, Recycle Renewable Energy Energy Efficiency

Air Pollution: Affecting Our Everyday Life

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Smart Buildings To Improve Comfort, Safety And Energy Efficiency

Air Quality Control Access Control Smart Lighting Fire Safety Energy Management Smart Thermostat Remote Security Intelligent HVAC

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Smart Transportation: The Rise Of Electric, Smart And Shared Vehicles

Smart Parking Self-Driving Smart Traffic Lights

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Country EV Policy Announcements China 5mio EV by 2020, 20% EV sales by 2025 France 100% EV by 2040 United Kingdom 100% EV by 2040 India 100% EV sales by 2030 Thailand 1.2 mio EV stock by 2030 Poland 1 mio EV Stock by 2025 New York City 20% EV sales by 2025 ➢ Electric Vehicle market is projected to benefit from a significant growth in the coming years (CAGR

• f 22.5%).

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Smart Transportation: EVs In The Spotlight

EV batteries Charging stations Electricity supply Electrical Grid ➢ Several industries will be affected:

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Smart Transportation: EV Batteries Evolution

Trend

➢ Reduction of Cobalt Content (~20% to ~6%) ➢ Improvement of anode graphite structure (addition of silicon) to improve charging rates ➢ Development of gel-like electrolyte material

Objectives

➢ Reduce cost ➢ Increase energy density ➢ Improve charging rates ➢ Improve battery safety

Sources: IEA analysis based on Meeus (2018); Nationale Plattform Elektromobilitat (2016); NEDO (2018); Howell (2016); Pillot (2017).

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EVs act as batteries with bidirectional flow of energy from and to the grid ✓ Peak load Leveling ✓ Emergency Backup ✓ Frequency Regulation ✓ Renewable Energy Storage ➢ At any instant, 95% of all cars are parked and unused ➢ Car batteries can be used to store electrical energy and give it back to the grid when needed ➢ V2G revenue can offset an average 10% of total cost of EV ownership

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Smart Transportation: EVs To Turn Into Home Batteries

Source: Cenex

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Smart Transportation: Shaking-up all Transport Modes

Shipping ➢ IMO 2020: Limit sulphur content in all marine fuels from 3.5% to 0.5% by 2020 ➢ IMO 2050: Reduce GHG emissions by 50% by 2050 (2008 baseline) Aviation ➢ CORSIA: Carbon-neutral growth from 2020 ➢ IATA: reach 1 billion passengers to fly on sustainable biofuels by 2025 Rail ➢ Most efficient mode of transport: 9% of activity but

• nly 1% of transport energy demand

➢ Rail technology breakthrough to facilitate transport shift from cars, trucks, and planes to train.

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Energy Storage: A Major Challenge, A Major Opportunity

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Question: What is the most widely used energy storage technology (in term of energy stored)?

A B C D Li-Ion Batteries Pumped-Hydro Compressed Air Flywheels

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Energy Storage: Pumped-Hydro Dominates The Game

➢ Representing over 95% of world storage capacity

Overall Cost Lifespan Discharge Time Energy & Power Density

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➢ Li-Ion Energy Storage Deployment is planned to grow by 55% annually

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Energy Storage: Li-Ion On The Rise

➢ For each storage need, there will be a storage technology:

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Sustain a critical load during grid outages Lowers demand during system peaks Buy energy & store it in off-peak hours and consume/ sell it during peak hours Stabilize frequency in real time

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Energy Storage Unlocks Various Benefits Resiliency/ Back-up Power Demand Response Energy Arbitrage Frequency Regulation

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Question: Which of the following sector is responsible for the majority of world’s water usage?

A B C

Agriculture Industrial Municipalities/ Households

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70% !

Every year, about 100’000 km3 of water falls on earth… Only 10% of that can be used for agriculture, industry, and drinking

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Water: A Commodity That Needs To Be Preserved

Source: focusingfuture.com

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Water Innovation

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Water: New Technologies To Enhance Distribution And Treatment

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Question: Which of the following requires more water to be produced?

A B C D 1 kg of Rice 1 kg of Chocolate 1 kg of Beef 1 L of Biofuel

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Water Footprint Beyond Expectations

17’000 Liters

1 kg of Chocolate

15’000 Liters

1 kg of Beef

2’500 Liters

1 kg of Rice

2’500 Liters

1 L of biofuel

Water management Livestock Monitoring Drilling, Seeding and Spraying Aerial Crop Monitoring Fertigation

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Smart Agriculture, Or How To Better Feed A Growing Population

✓ High precision positioning systems ✓ Sensors and remote sensing ✓ Integrated electronic communications ✓ Understand feeding and drinking habits ✓ Help fend off disease or infections ✓ Protects Animals Precision Farming Livestock Monitoring

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Smart Agriculture, Or How To Feed A Growing Population

A Broad Commitment: Governments, Companies and Consumers

Chinas’ ambitious energy plans: $382B to be invested into renewable power generation by 2020 and nearly $780B by 2030. Big corporation commitments to renewable energy: ✓ Facebook (100% by 2020), ✓ Microsoft (60% by early 2020’s) ✓ Amazon (already 50% since Jan 2018, goal: 100%) ✓ Apple (already 100%) Rising general awareness due to recent extreme weather events : Hurricane, Super Typhoon, 2018 will be the 4th hottest year on record, etc.

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Conclusion

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Water & Wastewater Treatment Solar & Wind Energy Storage Smart Agriculture Smart Transportation Smart Grid Smart Cities & Buildings Energy Efficiency

20-25% average growth

➢ The inflection point is now! Grid parity Technology breakthrough, just the beginning! Renewables: now viable without subsidies → fossil fuel need subsidies to survive World’s Electrification: data centers, EV, smart transportation, digitalization, etc.

Invest In The Future Of Our Planet

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➢ A long term opportunity impacting every aspect of our life: energy, transportation, food, water, environment… ➢ Rather than passively endure climate change, be part

• f a more sustainable future

➢ ISIN: XS1668108175 (USD), XS1668108506 (EUR)

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• f Financial Research issued by the Swiss Bankers Association.

Although AtonRâ Partners SA believes that the information provided in this document is based on reliable sources, it cannot assume responsibility for the quality, correctness, timeliness or completeness of the information contained in this report. The information contained in these publications is exclusively intended for a client base consisting of professionals

• r qualified investors. It is sent to you by way of information and cannot be divulged to a third party without the

prior consent of AtonRâ Partners. While all reasonable effort has been made to ensure that the information contained is not untrue or misleading at the time of publication, no representation is made as to its accuracy or completeness and it should not be relied upon as such. Past performance is not indicative or a guarantee of future results. Investment losses may occur, and investors could lose some or all of their investment. Any indices cited herein are provided only as examples of general market performance and no index is directly comparable to the past or future performance of the Certificate. It should not be assumed that the Certificate will invest in any specific securities that comprise any index, nor should it be understood to mean that there is a correlation between the Certificate’s returns and any index returns. Any material provided to you is intended only for discussion purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security and should not be relied upon by you in evaluating the merits of investing in any securities.

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