Ameresco, Inc. · NYSE:AMRC
Ameresco — Investor Day (November 2022)
46 slides from Ameresco's investor day presentation, Nov 15, 2022
Slide 1: Investor Tour: Renewable Natural Gas (RNG) Plant
Investor Tour: Renewable Natural Gas (RNG) Plant 91 st Avenue Wastewater Biogas-to-RNG Plant Phoenix, AZ November 15, 2022 ameresco.com © 2022 Ameresco, Inc. All rights reserved.
Slide 2: Safe Harbor
Safe Harbor Forward Looking Statements Any statements in this presentation about future expectations, plans and prospects for Ameresco, Inc., including statements a bout market conditions, pipeline and backlog, as well as estimated future revenues, net income, adjusted EBITDA, Non-GAAP EPS, gross ma
Slide 3: Welcome and Market Opportunity
Welcome and Market Opportunity Leila Dillon Senior Vice President, Corporate Marketing & Communications
Slide 4: Agenda
Agenda 11:30am Welcome and Market Opportunity – Leila Dillon 11:35am Ameresco and Renewable Natural Gas (RNG) – Mike Bakas • RNG 101 • Ameresco’s Depth of Experience • Intro to RFS and LCFS Programs • Market Potential for Green Fuels 12:20pm Impact of the IRA – Doran Hole 12:30pm Market Validation –
Slide 5: The Climate Clock is Ticking, and It’s Time for Action
The Climate Clock is Ticking, and It’s Time for Action Ameresco’s advanced technology portfolio integrates a wide range of decarbonization solutions – from supply to demand, electric to thermal, intermittent to firm renewables • Addressing the need for decarbonization is top priority • Clean energy
Slide 6: Renewable Natural Gas (RNG) is Part of the Net Zero Puzzle
Renewable Natural Gas (RNG) is Part of the Net Zero Puzzle Ameresco’s RNG offering provides an attractive solution Decarbonizing industrial for existing & prospective customers across industries facilities depends upon displacing fossil fuel use with a mix of • Industry has seen good progress and mo
Slide 7: Ameresco and Renewable Natural Gas (RNG)
Ameresco and Renewable Natural Gas (RNG) Mike Bakas Executive Vice President, Distributed Energy Systems
Slide 8: Diversified Energy Asset Portfolio
Diversified Energy Asset Portfolio H2 2002 2009 RNG 2020 EaaS 2022: Identified 2010 2019 Hydrogen Pilot Program 2001 2002 2000 2005 2010 2015 2020 2022 Adj. EBITDA ($M) $57.4 FY 2021 $152.7 Ameresco Consolidated Adj. EBITDA Ameresco’s Energy Assets O&M Other 2% FY 2021 8% 65% Recurring • Offers cust
Slide 9: Renewable Natural Gas (RNG) 101
Renewable Natural Gas (RNG) 101
Slide 10: Biogas
Biogas • Biogas is a byproduct of the waste created from everyday human activity… whether from garbage, wastewater, or through farming activities • Bacteria begins to decompose the waste and generate methane under an anaerobic condition (generally absent oxygen) Beneficial Use of Biogas: Electric Th
Slide 11: Biogas Treatment Based on Project Type
Biogas Treatment Based on Project Type Primary Treatment removes moisture and certain contaminants. Secondary Treatment involves the use of an after cooler or other additional moisture removal, followed by siloxane/sulfur removal and compression (all as necessary). After the impurities are removed,
Slide 12: Advanced Treatment at 91st Avenue to Produce RNG
Advanced Treatment at 91st Avenue to Produce RNG Raw Biogas CH4 60% CO2 38.3% Product Gas N2 1.5% CH4 96% Compression Dehydration H2S 500 ppm CO2 1% Natural H2O Saturated PSA – Adsorbers N2 3% Gas H2S 4 ppm HHV 607 Btu/ft3 Pipeline Siloxane, VOCs H2O 7 lb/mmscf HHV 970 Btu/ft3 Reheat CH4 7% Waste Ga
Slide 13: Ameresco’s Depth of Experience
Ameresco’s Depth of Experience
Slide 14: Ameresco’s U.S. Biogas Portfolio
Ameresco’s U.S. Biogas Portfolio (as of 11/1/22) ~36 Operating Projects • 30 LFG-to-Electricity • 2 Medium BTU • 4 Renewable Natural Gas (RNG) ~20 RNG Projects in Construction or Permitting Map Key Electricity WWTP Projects Medium BTU Landfill Projects RNG Operating Contracted O&M 14
Slide 15: Deep Bench of Technical Experts
Deep Bench of Technical Experts Business Development Lead Engineering & Construction Lead Operations Lead • 22 years of Biogas Experience • 28 years of Biogas Experience • 16 years of Biogas Experience • 56 Biogas Projects (24 RNG Projects) • 47 Biogas Projects (27 RNG Projects) • 36 Biogas Projects
Slide 16: Path to RNG Asset Execution
Path to RNG Asset Execution Project Project Leasing & Permitting Interconnect Engineering Procurement Construction Commissioning Feasibility Development Right of Ways 6-18 months 3-6 months 12-24 months 6-12 months 6-9 months ~24 months 12-18 months ~90 days • Evaluate Biogas • Project Schedule • St
Slide 17: Operations & Maintenance
Operations & Maintenance (as of 11/1/22) Dedicated O&M Group currently Live monitoring sites from AssetPlanner® CMMS software operates and maintains 750+ Mwe Ameresco’s Remote to manage fleet maintenance Operations Center (ROC) • Regional management team • Ability to customize software ✓ Avg 16 year
Slide 18: Operations Engineering
Operations Engineering Dedicated Ops Engineering staff build, implement, and maintain data systems to ensure information is disseminated quickly, accurately & efficiently. This system is at the heart of Ameresco’s ability to run small renewable facilities with the same attention to detail as utility
Slide 19: Root Cause Analysis (RCA)
Root Cause Analysis (RCA) “The only real mistake is one from which we learn nothing.” – Henry Ford RCA Process RCA Recent Example • Identify and resolve the underlying “root” cause of problems Improving What We Control • Disseminate information to the fleet via a “maintenance Description Impact to C
Slide 20: Compliance
Compliance Dedicated, highly experienced, team of environmental and Department of Transportation (DOT) / Pipeline and Hazardous Materials Safety Administration (PHMSA) compliance specialists • Manage air permit applications for new projects and renewals for operating fleet • Support facility operato
Slide 21: Safety
Safety Best-in-class safety program that scored higher than 96% of all companies analyzed by third-party rating organization (National Safety Council, 2022) Pandemic Safety • AMRC Operators are crossed trained to be able to run each other’s facilities • Facilities were stocked with necessary equipme
Slide 22: Fully Integrated Team
Fully Integrated Team • Technical Feasibility • Environmental Permitting • Budget Development • LFG Data & Analysis • Site & Pipeline Inputs Engineering / • Plant Design Feedback • Environmental Project Project • Process Improvement Permitting Evaluation Development Management • Plant Control Narrat
Slide 23: Intro to the RFS and LCFS Programs
Intro to the Renewable Fuel Standard (RFS) and Low Carbon Fuel Standard (LCFS) Programs
Slide 24: RNG – Transportation Market
RNG – Transportation Market Renewable Fuel Standard (RFS) • Federal policy that requires a certain volume of renewable fuel to replace or reduce the quantity of petroleum-based transportation fuel, heating oil or jet fuel • Obligated parties under the RFS are refiners or importers of gasoline or die
Slide 25: RNG – Transportation Market (California)
RNG – Transportation Market (California) Low Carbon Fuel Standard is designed to encourage the use of cleaner low-carbon fuels (transportation sector) in California to reduce GHG emissions • Enforced by California Air Resources Board (CARB) via LCFS credits • LCFS credits represent one (1) metric to
Slide 26: RINs Identified by D-Code and Fuel Nesting Scheme
RINs Identified by D-Code and Fuel Nesting Scheme • Each fuel type is assigned a “D-code” that identifies the renewable fuel type • Four categories of renewable fuel have the following assigned D-codes: • Cellulosic biofuel is D-3 (cellulosic biofuel) • Ameresco’s operating projects produce Cellulos
Slide 27: RNG / RIN Delivery Process
RNG / RIN Delivery Process Pipeline statements with Data on the facility’s Sales contracts; utility-grade meter data of Invoices and/or pipeline gas consumption, biogas injection; statements of natural gas inventory and sales; M onthly invoices Pipeline statements with of biogas plant; sales and pur
Slide 28: Market Potential for Green Fuels
Market Potential for Green Fuels
Slide 29: Market Potential for Green Fuels
Market Potential for Green Fuels • Non-Transportation Sector is 440 times that of the Transportation Market (15,852 T BTU vs. 36 T BTU *) • International Energy Agency (IEA) – Net Zero by 2050 Roadmap • By 2030, RNG production increases seven-fold over 2020… by 2030, 27 times the 2020 levels • RNG v
Slide 30: eRINs
eRINs AMRC portfolio as of 11/1/22 • Under the RFS Program, eRINs are proof electricity 10 Operating Power Plants (45 MW) generated from a project using an approved Fuel 3 RNG Project in Development Pathway is used as transportation fuel (EV) 1 LFGTE Operation Contract • EPA will address “eRIN” gene
Slide 31: “It’s Not a Sprint… but a Marathon”
“It’s Not a Sprint… but a Marathon” • Sustainability/Decarbonization of the Pipes….Removing Carbon Risk from the Balance Sheet Market Trends • Security of Supply through Domestic Resources • Dispatchable, Base-Load Green Energy to Support Resiliency Objectives • California PUC Approves Biomethane Pr
Slide 32: Ameresco’s Competitive Advantage
Ameresco’s Competitive Advantage Historical, Proven Vertically Integrated, Positioned for Future Markets Track Record Deep Bench of Talent (Non-Transportation Sector) • Ameresco has been developing • In-house development, • Diverse offering supported by biogas projects from the beginning permitting,
Slide 33: Expected Impact of the Inflation Reduction Act (IRA)
Expected Impact of the Inflation Reduction Act (IRA) Doran Hole Executive Vice President & CFO
Slide 34: IRA Enhancements to ITC and PTC
IRA Enhancements to ITC and PTC • New technologies eligible for ITC if placed in service after December 31, 2022 Technology When is it eligible for the new ITC? Solar energy, geothermal, fiber-optic solar, fuel cell, Projects placed in service after microturbine, small wind, offshore wind, combined
Slide 35: Biogas ITC Text
Biogas ITC Text Section 13102 (f)(3)(7) Qualified biogas property.— (A) In general.--The term `qualified biogas property’ means property comprising a system which-- Includes equipment that Converts or (i) converts biomass (as defined in section 45K(c)(3), as in effect Captures biogas from GHG-produc
Slide 36: IRA – Potential Opportunity
IRA – Potential Opportunity Landfill as conversion system • Landfill doesn’t require installation of an anaerobic digester to convert biomass to a gas. Methane conversion happens naturally. Longstanding tax policy allows for landfills producing biogas to generate electricity to elect for the Section
Slide 37: Additional Treasury Dept. Points of Clarification Needed
Additional Treasury Dept. Points of Clarification Needed 1. Qualification of LFG as “biomass” 2. Gas must be used for sale or productive use, and not combustion 3. Confirm eligible equipment / costs 4. Addition of RNG projects to existing operations 5. Separate ownership of biomass source (landfill,
Slide 38: Other Renewable Fuels Incentives
Other Renewable Fuels Incentives Biodiesel and renewable diesel (40A, 6426, and 6427) Clean Fuel Production Credit (45Z) • Existing income and excise tax credits for biodiesel and • New production tax credit for the production of low-emissions biodiesel mixtures (including renewable diesel) are exte
Slide 39: Market Validation
Market Validation Josh Baribeau Vice President, Finance & Corporate Treasury
Slide 40: RNG Revenue Profile and Financing
RNG Revenue Profile and Financing • We typically choose to contract 50% of our RNG volume at a fixed price for ~5 years • We believe this strikes a balance between reasonable leverage and fast amortization Fixed-price contract rolls We assume a generally Debt expected to be paid off, allowing us to
Slide 41: “Free and Clear” Plant Provides Significant Optionality
“Free and Clear” Plant Provides Significant Optionality • Once the debt is paid off, we earn Debt is fully amortized significant optionality: • We can refinance, pulling significant Cash cost cash out to re-invest in growth delta allows us • We have the ability to recontract to capture lower- priced
Slide 42: Pipeline and Platform Valuation
Pipeline and Platform Valuation • The market has recently validated RNG assets and platforms • We believe there is significant value to our pipeline AND platform, but we also want to retain the optionality embedded within the assets Expected Platform value Existing asset value Neither chart reflects
Slide 43: Why Ameresco?
Why Ameresco? Ameresco is a leading energy services company with a compre he nsive portfolio of energy efficiency and renewable energy solutions. Comprehensive Portfolio $11+ Billion in energy Energy Efficiency Objective approach and in-house technical solution projects, expertise delivers the most
Slide 44: Q&A
Q&A
Slide 45: Ameresco Management Team
George Sakellaris Doran Hole Michael Bakas Nicole Bulgarino Leila Dillon CEO & President CFO & EVP EVP, Distributed Energy Systems EVP & GM, Federal SVP, Marketing & Communications Bob Georgeoff Britta MacIntosh Lou Maltezos Mark Chiplock David Corrsin EVP SVP, Western & London Operations EVP SVP &
Slide 46: Thank You!
Thank You! ameresco.com © 2022 Ameresco, Inc. All rights reserved.