Think XERGYBamdad Bahar

Xergy Inc.

Delaware Sustainable Energy Alliance Conference October 2017

Global Animal … Lived & Worked Globally, Proud US citizen, Lived in US since 1986, settled in Sussex County, DE

Iran Bangladesh Iran Brazil Iran

UK

Spain

France

Germany

USALatin

AmericaIndia China

POREXW.L. GORE

& Assoc

Teledyne Energy

SystemsXERGY INC

- Education: University of London (UK), Columbia University (NY); Interned in Spain, UK, US

- WHEC 1984, City University! And Zagros!- Worked as an Engineer:

- Porex (New York)- Gore’s Industrial Products Division

- Helped expand global industrial sales - Founded Gore’s Fuel Cell Membrane

Business (Business Leader/ Intrapraneur)- Teledyne Energy Systems: General Manager- 10 year Non Compete,

- Other Businesses: Real estate, Staffing, Retail

- Born in Iran; Family of Writers & Statesmen- Father: Diplomat for Iran

- Assignments in Bangladesh, Brazil, Poland, Turkey, UK

- My own International Career- Extensive Travel in Asia & Europe

Xergy’s Global Clients & Supply Chain

What’s Goin’ On? • European Union is shuttering their Nuclear power plants, and simultaneously

• Investing in Natural Gas Fueled Power plants

• EU has almost no Natural Gas reserves

• So EU, will become a trillion dollar natural gas client … for Russia, Israel, Libya … Iran, Qatar, Saudi Arabia… if they can get pipelines to Europe … and assure long-term, steady supply!

• Building “renewable energy” generation capacity as fast as they can

• Wind, Solar, …

• China is in a similar situation, except

• They are still building coal fueled power plants at fast clip, particularly in Western provinces. Roughly one major power plant a month

• Also building Natural Gas fueled Power plants

• They are building renewable energy generation capacity – faster than anyone else!

• BRICS, particularly India are building Natural Gas fueled systems at a fast rate

• India is making a commitment to only operate electric cars by 2030!

European Case Study

• Europeans DO NOT want to be dependent solely on Russian Gas Supply, or be a reason for more instability in Middle East or North Africa because of pipelines• Meanwhile Russia is looking to expand production with partners

• European Union has mandated 20% of all Generation capacity in every member country to be from Renewables

• European (and Chinese) companies dominate Renewable Generation technologies and installed systems

• Wind Generators Everywhere…• 75% of all new EU renewable capacity will come from Wind • Moving quickly to install off-shore wind generation capacity

• Using engineering infrastructure used for North Sea Oil Exploration

Wind Generators Everywhere

French Drama:No Cars in Paris - Sunday

All Cars Hydrocarbon Fueled Cars in France eliminated by 2040

Paris Crit’ Air Permits

Critical Issues from U.S. Perspective

• U.S. is behind global technology race for renewables

• U.S. is behind global installation race for renewables

• US has plenty of ‘cheap’ Natural Gas!

• Much of the Global “push” for renewables is driven by agendas like global warming and CO2 emissions …not ROI!

• U.S. can sit back and do nothing or participate aggressively in this global race for renewable technologies! Do we have a choice?

• This is actually a ‘global industrial revolution’ in the making, and if we don’t participate the long-term consequences will be grave!

• Renewable Energy job growth has been significant

Big But’s• There are vital technology gaps in the push for renewables:

(1) Decent Energy Storage solutions are not quite here yet (2) Viable ‘new’ energy appliance solutions are not quite here yet(3) We do NOT have the tools we need! Renewables can NOT displace fossil fuels – not enough land! More Innovation!.

• Marginal economics … don’t expect subsidies to last!

• Everyone seems to be missing the ‘larger picture’• Pushing a Climate Change agenda, is ‘insufficient’ and ‘distracting’• Looking at Power Generation …is ONLY one side of the equation!

• Overall global rate of growth in energy consumption (50% growth) - greater than additions from renewable plants …. • Renewable Energy share migrated from 1.4 to 1.9 %

globally over 20 years,• Good News – Bad News,

• We must consider Energy ‘use’ & ‘resource’ utilization

DEMOGRAPHICS IS DESTINY

There are Global Issues affecting us all!Its about MORE than

CO2, its actually about RESOURCE SCARCITY!

Rise of the Global Middle ClassMeans: More Housing, More Appliances, More Water, More Cell Phones, More Food, More Schools … and yes, Energy and Cars!

This will lead to: Climate Change, Loss of Biodiversity, Deforestation, Pollution, Dead Zones in Oceans, Over-Population …. AND SCARCITY

We need 6x Planet Earths!There will be MORE

Competition for Resources … this will lead to WAR(S)

To Avoid Continuous Conflict, We must address SCARCITY – HEAD ON! THIS IS WAR!

• This is ‘the’ real global priority. It’s in OUR national interest• Scarcity = War; Abundance = Peace

• There are solutions … Technology TO the Rescue …• It’s a lot cheaper than “fighting” wars

• It’s where “real” future business opportunities are• Global Market Growth will be centered on critical technologies that can be deployed

everywhere!!

• Its an opportunity for U.S. to lead and project “Soft-Power”

• U.S. has a ‘unique’, ‘unparalleled’ technology development infrastructure

• I would like to share our company’s background … as a case study!

Core Premise: Don’t save energy, save EXERGY! The true enemy of the future is WASTE!

• We have the resources we need, if we can avoid waste!

• Exergy is the “maximum useful work a system can produce” or the useful portion of energy.

• All energy conversion has some inefficiency in it. So, there is the part we waste, and the part we use!

• Ionic Systems exhibit inherently HIGHER Exergy Efficiency!

• Concept of Exergy Analysis can be extended to many other fields beyond thermodynamics, e.g. ecology (sustainability), economics ..

• Capturing EXERGY, is like discovering new resources!- Cars in US, currently use 25 kTWh of fuel, to provide .75 kTWh of propulsion- 20 Tons of Oil, for 1 Ton of Indoor heating- Roughly 1/3rd of Food is wastedTHERE IS MASSIVE DESTRUCTION OF EXERGY

BIO-INSPIRED!

“2.4 Billion Years ofEvolution has already

figured out how to Save Exergy!”

Biological Systems are Ionic!!

Energy Use By Sector Energy-Water NexusEnergy use for Water & HVAC will surpass Auto

Vapor Compression

Huge Auto Investments

Technology to the Rescue

?Batteries,Fuel Cells… ionic Systems

Sea waterReverse Osmosis, & Pervaporation… using ionic Membranes

ElectrochemicalCompression, Ionic Liquid desiccants … Using ionic Systems

75 Million Units 130 Million Units

Think XERGY!!

• Technology (Platform) Premise: Controlling the movement of ions and molecules through nanoscale channels offers revolutionarypathways for solving problems, and therefore the development of new home, energy, industrial, medical, and sensing products. This technology approach is new, transformational, and disruptive… can lead to solving many of the problems we face as a planet

• Our Vision: To become the “Intel” (Integrated Electronics) of our age

• i.e. “Integrated Ionics”

• Create unique, high value, high eco-impact products based on integration of Ionic Materials for significant applications.

THINK XERGY

THE DIVERSION IS IN THE CONVERSION

The Problem with “Ion ExchangeMedia Engineering”• The Problem: Ion Exchange Media are inherently weak,

XERGY reinforces them to make composites membranes!

• Ultra-thin, Ultra-strong, Ultra-high performance

• XERGY knows how to package them into useful devices

• Creating great products for critical applications

• Ion Exchange Media - Two Key Properties:

1. Can Transport Ions under electric field

• Cations, Anions

• Recently received 3 ARPA (Anionic Membrane) awards

2. Can Transport Polar Molecules (Pervaporation)

• Difference in Concentration,

Temperature, Pressure …

XERGY’s Technology Platform’sVALUE Proposition

• XERGY is the world leader in advanced composite (reinforced) ion exchange media technology. XERGY’s membranes are Ultra-thin, Ultra-strong, Ultra-high performance

• This is Xergy’s core competency

• Platform Value Proposition:

• 10 x thinner means 10 x lower cost

• Thinness means shorter distance for ions or molecules to travel• Means lower resistance, higher performance

• Lower Cost, Higher Performance = Revolution in “Value Creation”

• Thinness without compromising on strength• Compositing provides mechanical reinforcement for

otherwise weak materials

XERGY’s Underlying Magic• XERGY Can customize ion exchange media for each application – different

chemistries and supports

• NO ONE ELSE CAN DO THAT – everyone is married to one chemistry … XERGY’s Advantage

• Because of their thinness and high performance, packaging these membranes is non-trivial. So, XERGY is involved in the design, development, manufacture, sale and service of a range of devices, stacks, modules and systems employing these advanced membranes. “i.e. packaging advanced membranes is a critical issue”

• Because we develop advanced membranes, we have an ‘innovation advantage’ – an early start, because new membranes often lead to new possibilities i.e. new devices … XERGY advantage

• XERGY has key I.P. 8 Issued Patents, 17 pending applications, 55+ provisional cases in process. Spent about $5 MN in R&D grants, and have an additional $5Mn in future R&D Grant commitments; to support this platform.

Validation

COMPANY CONFIDENTIAL 22

XERGY won the GE Ecomagination award in 2010 for its development of Electrochemical Compressors for HVAC applications based on advanced ion exchange membranes.

Used the “award” to found Xergy Inc.

XERGY teamed up to win many R&D grants from US DOE, BTO Office and ARPA-E

XERGY’S CORE TECHNOLOGY HAS LITERALLY HUNDREDS OF PRODUCT APPLICATIONS

COMPANY CONFIDENTIAL

23

XERGY Innovation Examples

• XION™ Anion Exchange Membranes• Fuel Cells, ERV’s, ILD’s

• X-CELL™ Electrochemical Compressors (Heat Pump)• Air Conditioning, Refrigeration, Hybrid Hot Water Heaters

• XUMIDOR™ Humidity & Oxygen Control System• Refrigeration

• XIZONE ™ Ozone Generator• Disinfection, Soap Replacement

• XIPURE™ Desalination System• Sea Water Purification, Waste Treatment

• XIDEX ™ 3 Phase Heat Exchangers• ILD systems

• XISENSE ™ Sensor(s)• Occupancy Sensors, Fire Safety …

Home Appliances with XERGY Devices

XergyHeat Pump.

Xergy Direct Ozonation

Xergy Membrane in Energy Recovery

Ventilation

Xergy Ionic LiquidDesiccant System

Xergy CO2 Based Occupancy Sensor

Xergy Solid State Humidity and

Oxygen Control

Energy use for HVAC could be reduced by 50% if three XergyInnovations are implemented: Electrochemical Heat Pumps,

3 fluid Heat Exchangers, and Occupancy Sensors!!

Our Approach: Non-VC route!

IDEATION, CONCEPTION, CREATIVITY …

is at the heart of the process; but also disciplined execution is key to success

It’s All about a Great TEAM“Manhattan Project for Sustainability”

XERGY• Over 100 years combined experience in this field within Xergy

• Scientists, engineers and inventors from DuPont, HP, Gore, INCO, …

• Director of R&D: Dr. William Parmelee

• 25 Years DuPont, Chemist

• Membrane Development: Dr. Zhefei Li

• 10 Years Post-Doctoral Studies, Senior Electrochemist

• Senior Engineer: Mark Golben

• 30 Years INCO, Shell, Ergenics

• 15 Engineers, 3 MSc

OUTSIDE• University of Delaware

• 6 Projects with different Departments at UD

• Working with Dr. Ajay Prasad and Dr. Yushan Yan

• RPI

• Two ARPA-E awards with RPI

• Working with Dr. Chulsung Bae

• Haier

• 9 projects with different product groups at Haier

• Haier gives us the capacity to project globally, with a significant U.S. footprint

• All “Core”, “High Value” Components will be produced in US

• National Labs: ORNL, NREL ...

• 4 Projects with different National Labs

• Working with Dr. Omar Abdel-Aziz and Dr. Panos Datskos

RESOURCES ARE LIMITED, BUT CREATIVITY IS UNLIMITED!

Xergy, with partners within our small state (the University, etc.) has been able to get so much done without VC investment…

‘REAL’ battles of our age are for intellectual space. We need

“Smart Solutions, Soft Power”

We MUST find ways to work together, collaborate to get

more done, be more creative. This is a true a win-win!

At XERGY we live thisMantra - every day!