Industry: Electricity storage and renewable energy
Year of incorporation: 2011
Founders/Shareholders: Antoine Saab and Nadia Moussouni
Employees: Two technicians, plus four technicians on contract basis
Board of directors: The two founders
The idea of owning an energy storage system (ESS) is not quite as tempting as owning a new BMW or even the latest phablet by Samsung or HTC. That is, unless one lives in Lebanon and wants to get out from being under the double yoke of daily power cuts and dependency on costly, dirty and noisy generators. It was this proposition that inspired Antoine Saab, a Lebanese engineer with international experience, to develop an energy storage device that competes head on with the informal power sector and augments the famous weaknesses of the formal provider, Électricité du Liban (EDL). The device works similarly to an uninterruptible power source (UPS) known to desktop computer users, meaning it stores electricity during the periods when electricity is delivered by the power utility and delivers it back to the user during power cuts. But Energy24’s ESS is based on advanced technology and offers longer term and larger scale provision of electricity. Tailored to customer needs, the capacity of an Energy24 ESS can cover needs ranging from a household to a factory, Saab says. A basic household ESS for a home in Beirut’s Ashrafieh district would be dimensioned to deliver 27 amps for four hours. Having invested two years of research and development into the first device and after providing the first unit to Saab’s mom, the founders began offering their product commercially at the start of 2013. By time of the interview with Executive, the company had delivered about 80 units in a pilot phase of operations and was negotiating with several investors over equity participations based on a company valuation, which Saab and Moussouni would not disclose but say is north of $5 million.
Energy24’s business model incorporates rental and purchase options for users of their units, and clients have used both options equally, according to Saab. Selling points are reliability, certified safety and instant convenience of the device, as well as cost savings on a client’s overall electricity bill when using the device. Revenues shot up 1,500 percent from the first to the second year of the pilot phase and will grow annually in double digits for many years to come, Saab claims.
He owns the intellectual property of the ESS which is sourced from a manufacturer in Canada; Energy24 locally customizes the units and equips them with controllers developed by the firm. Bottlenecks exist, not on the manufacturing side, but on finding and training installers who need to be skilled in dealing with high voltage equipment. A second bottleneck is financial, because the delivery of units on rental basis is cashflow negative in the initial phase of a contract.
In the mid to long term, the business model is more targeted to services provision than to manufacturing and sales of units. Saab envisions equipping entire buildings with Energy24 and developing the company into a private efficiency component of the Lebanese power grid. In order for the business to be resilient against the remote chance of EDL fully satisfying Lebanese power demands, Energy24 is investing into research and development, and working on a next phase ESS that integrates a photovoltaic component for charging the device and even delivering eventual surplus power into the grid.
We like the dynamism of the venture and the potential benefits for stabilizing national electricity, as much as the commitment to R&D and the venture’s aspirations of creating a market in Lebanon that Saab thinks can be worth at least $30 million and up to $100 million annually for 20 years, with strong export potentials. Anecdotally, he notes, “When I walk down the road and tell people what I do, two out of three tell me they want it in their homes.”