Case 2: Danfoss AquaZ – Danish Water Forum

Danfoss AquaZ
• Drivers of Opportunity
– Potable Water Scarcity
– High Water Desalination Costs

• Danfoss AquaZ Value Proposition

• Our Solution:
The Cost-Effective Aquaporin Membrane

• The Current RO/NF Market and its

Development

• Key Facts

• Company Development State and

Future Challenges

• Our Vision

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Case 2: Danfoss AquaZ – Danish Water Forum

The Story of Danfoss AquaZ is about

• Astonishing fundamental research

• Nanotechnology

• Million € investments

• Skunk Work

• Risk of failure

• Billion € gain perspectives

• But initially it’s about clean water

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Case 2: Danfoss AquaZ – Danish Water Forum

Driver of Opportunity: Potable Water Scarcity

Facts on water:

• Covers ¾ of the Earth’s surface!

• 3% is potable!

• 25% of population have no access

to satisfactory quality/quantity!

• > 80 countries with severe water

problems!

• Worldwide drought and desertification will sharpen scarcity.

• This is NOT ONLY a 3rd World problem!

• According to the Worldwatch Institute, more than two-thirds of the world’s

population may experience water shortages by 2025, thus affecting practically
every country in the world, including the developed, unless they reduce
demand and/or develop additional water sources.
Source: Elsevier B.V. 2008

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Case 2: Danfoss AquaZ – Danish Water Forum

Driver of Opportunity: High Water Desalination Costs

Specific Energy Consumption for Different Water Sources and Desalination Technologies

16 Ground Brackish Water Sea Water

Water Desalination Desalination

14
Total Specific Energy Consumption

12
Electrical/Thermal kWh/m3

Source:
10 Gary J. Crisp,
GHD Australia,
September 2008
8 www.ghd.com.au

2 Thermal Processes

0
Conventional BWRO SWRO MED METC MSF
Desalination Technology

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 Case 2: Danfoss AquaZ – Danish Water Forum

Sea Water Reverse Osmosis Desalination Costs vs. AquaZ @ 190 k m3/day
0,80

US$ 0.74/m3

0,70

37% Total Cost

0,60
Reduction!

US$ 0.47/m3
3
O&M&Total Costs US$/m

0,50
RO/Booster
Pumping**
33% Other Misc Unit Costs**
0,40
of Total Cartridge Filters
Solids Disposal
Labor
Costs! Membrane Replacement
Maintenance
Chemical Costs
0,30 Finished Water Pumping
Permeate Lift Pumping
Membrane/PX Booster Pumping
Filtered Water Pumping
Raw Water Pumping
Other Capital Costs*
0,20 Membranes
Prefiltration
Dewatering Equipment
Instrumentation/Control
Electrical
Contractor Overhead & Profit
0,10 Skids
Contingencies
Building
Engineering & CM

0,00

SWRO Danfoss AquaZ

RO, FilmTec SW30HR-380, 9 GFD, 50% Recovery AquaZ, 45 GFD, 85% Recovery

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Case 2: Danfoss AquaZ – Danish Water Forum

Danfoss AquaZ Value Proposition

• Danfoss AquaZ develops a cost-effective membrane technology, which will

increase the efficiency of sea water desalination plants by 5-10 times!

Conventional Plant Same Size Plant 80% Smaller Plant

OR
Up to 70% Up to 400% Same Amount of
Less Energy More Water Water

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Case 2: Danfoss AquaZ – Danish Water Forum

Our Solution: The Cost-Effective Aquaporin Membrane

• The membrane purifies water through its

incorporated proteins called “Aquaporins”. Water Channel

Aquaporins isolate water molecules based

upon electrostatic physical recognition
Aquaporin
leading to production of truly pure water
Î H2O ! Polymer Polymer

• They operate at the thermodynamically

lowest energy level for purification.
The purification process can be gravity-
driven and may increase water throughput
by 5-10 times compared to traditional state
Nano
of the art desalination technologies. Membrane

• Unlike other Aquaporin-based membrane

projects Danfoss AquaZ is deeply focused on
developing reliable membranes, which can Danfoss AquaZ
Membrane with
be produced using industrialised scalable proprietary Nano
processes and can withstand harsh working Membrane
redundancy!
environments.
• … and we have our own GMO approved
manufacturing of aquaporins…
April 28, 2009 7
Case 2: Danfoss AquaZ – Danish Water Forum

The Current RO/NF Market

• Danfoss AquaZ Membranes substitute current Reverse Osmosis (RO) and

Nano Filters (NF).

2008 World Market for Membrane Elements US$ million,

Manufacturers level Market Size: 600-700 m US$; CAGR 8-16%

100
Ultra pure Seawater
water RO desalination
525
Transmembrane pressure, dP (bar)

Brackish Chemical
water desalination & pharma- Foods &
ceutical NF beverages
OPERATION COST

10 125 Wastewater
Fresh treatment
water UF
575 Pathogens
(bacteria &
viruses)
1 Danfoss AquaZ
potential Potable
MF
water 875

0,1
0,00001 0,0001 0,001 0,01 0,1 1 10
Impurity size (μm)

April 28, 2009 8

Case 2: Danfoss AquaZ – Danish Water Forum

Seawater RO Desalination

• RO/NF Elements are to a large extent standardized

providing a lucrative retrofit opportunity

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Case 2: Danfoss AquaZ – Danish Water Forum

Key facts

2005 Mail from MT Technologies, USA to Jorgen Mads Clausen, Danfoss

Subject: Unique business proposal
– Carlo Montemagno, Dean of Engineering, University of Cincinnati
– Steven Tozzi, Business Man, Serial Entrepreneur

Danfoss Ventures: global market and technology investigations (IPR)

2006 Danfoss AquaZ A/S established

– Danfoss 51,0%
– BankInvest 25,5% (BI New Energy Solutions)
– MT Technologies 23,5%

Subsidiary, HQ,
Danfoss AquaZ Inc., Nordborg,
Cincinnati, Ohio Denmark

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Case 2: Danfoss AquaZ – Danish Water Forum

Senior Management

• Jorgen Steen-Pedersen - President and CEO

– The project is headed by Jorgen Steen-Pedersen, who
leads a focused team of international researchers
working on the membrane development.
– Before being appointed head of Danfoss AquaZ in
2006, Jorgen successfully managed various R&D- and
venture departments at Danfoss.

• Carlo Montemagno - Professor and Co-founder

– Dean of Engineering, University of Cincinnati
– Fellow of the American Academy of Nanomedicine
– Recipient of the Feynman Prize for Experimental Work
in Nanotechnology
– Previously Chair of the Department of Bioengineering
and Roy & Carol Doumani Professor of Biomedical
Engineering, UCLA.
– At Cornell University he served as associate professor
at the Department of Biological and Environmental
Engineering and as director of graduate studies in
biomedical engineering

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Case 2: Danfoss AquaZ – Danish Water Forum

Current Investors

• Founder, Carlo Montemagno

– See previous slide for a biography on Carlo

• Danfoss Ventures A/S

– Danfoss Ventures is the corporate venture arm of the
Danfoss Group.
– Danfoss Ventures is a leading corporate venture investor,
investing in early stage companies within Water and
Energy.
– The Danfoss Group is a $ 5bn+ industrial components
manufacturer with acitivities in Heating, Refrigeration,
Motion Controls and Mobile Hydraulics.
– For more information, please visit: www.danfoss.com

• BankInvest
– BankInvest is a Danish venture capital firm focusing on
early stage investments within Cleantech
– For more information, please visit: www.biventure.com

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Case 2: Danfoss AquaZ – Danish Water Forum

Company Development State and Future Challenges

• By 2010 a ø25 mm Danfoss AquaZ Membrane will be available for “small

membrane applications” such as:

Tap water filters Lifeboat/rescue kits Aquarium filters etc.

Travel filter kits

• To gain distribution power and increase application knowledge Danfoss

AquaZ will partner with one or more major suppliers in the current RO/NF
market using their current communication channels, push/pull strategies
and brands.

• Financial investors are invited to pursue an interesting business

opportunity with Danfoss AquaZ

• For more information please visit: www.danfoss-aquaz.com

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Case 2: Danfoss AquaZ – Danish Water Forum

Our Vision

Functional Nano Applications &

Ingredients Membranes Market Niches
[Biological Cell
Wall Proteins]

- Aquaporin Primary Business Focus - RO/SWRO

membranes
Rescue kits

- Bacteriorhodopsin - Solar Energy and

- Cytochrome Carbon Dioxide
Oxidase Energy Conversion (CO²) Uptake

- Na+/K+ ATPasen - Controlled

- β-galactoside Medication Dosing
permease for Bioengineered
- Glucose permease Pharmaceuticals
- Etc. - Etc.

April 28, 2009 14