Customer: Climeon

PatSnap is a powerful tool, and it gives us powerful arguments—especially when choosing between a number of projects. It also allows you to see where you have a complete freedom and a strong IP position.

-Joachim Karthäuser, Founder, CTO / Business Development

Climeon is a clean-tech vendor, providing a technology that uses the energy in waste heat from industries and low-temperature geothermal heat to generate electricity. The company received its first order in 2015 and has since established a customer base consisting of Viking Line, Virgin Voyages/Fincantieri, CP Energy and SSAB, among others. The product is protected by patents and offers market-leading performance within its areas of application.

We spoke to Joachim Karthäuser to understand the goal behind the business he set up with his neighbour

Could you tell us a little bit more about your role at Climeon?

“I am one of the founders, my Partner Thomas Öström & I started Climeon back in 2011. We have a management team of around eight people, and we’re all involved in most of the business functions, from finance and sales, to development and PR.

“One of my main roles at Climeon is being the CTO, so I’m always looking for developing markets and technologies that Climeon could be active in, in 1,2,3 years’ time. I’m also head of the IP department, but it was getting quite full-on so we hired a full-time patent attorney, and she looks after most of that now.”

What led you and your business partner Thomas to start your company, Climeon?

“Thomas Öström and I were, and still are neighbours, and we’d often meet up to brainstorm and discuss what we thought the holy grail of renewable energy was. During this time, we were both evaluating different business opportunities, and then we came up with the idea on which Climeon is founded. That was in the winter of 2011, and we wrote a patent around our core technology, and started the company. Now we’re 50 plus people and listed on the stock market, so it’s gone quite well.

“We both have very different career backgrounds. My background was in the chemical industry, and I’d worked for companies like Shell & others involved in wind energy & high voltage cables. Thomas has a background in aerospace and semiconductors.”

What are some of your key focuses for 2018 as a company?

“So, we have patented the general principle of our machinery, some of its components, and then we’ve gone into patenting our technology in combination with certain applications. Increasingly, we’re looking at how our system is working in the geothermal field which is very important for us.

“We’re also continuing to patent our technology in combination with marine applications. There are some special configurations which are more useful than others, particularly those that are novel and patentable, and that’s our strategy basically.

“We are focusing a lot on geothermal and industrial applications- for example within the steel industry there is a lot of waste heat which could be converted. Within the energy field, there is a very important difference between base load power like fossil power plant, and intermittent power, like solar and wind, and what people need is constant power. Base load power is much more desirable than intermittent, and it’s a real focus area for us to be able to supply base load, and geothermal & industrial waste can do this.

“We are not patenting globally, we patent where we feel we have a market, and we go there selectively, for example in places like Japan where a product will be useful. That is our overall strategic picture.”

What are the typical challenges you’ve come up against within your industry? Either as a business, or for you personally?

“As a business, initially when we first started out, we were looking very broadly at many different industries including paper, cement, basically any industry emitting waste heat in large amounts.

“So, we decided to focus on some specific industries, one of them being geothermal. One of the big challenges in that industry, and a challenge which we could take advantage of, was that we could convert low temperatures into electricity. We found that it was much easier to drill holes 2 kilometers into the ground, where you’ll find 90 degrees of water, instead of drilling 5 kilometers in order to produce 150 degrees, which is the traditional way. Finding that way of doing things was great, and people were happy that 90° was a good, and efficient condition to produce electricity.

“The challenge in the geothermal field, is when you drill a well you’re never quite sure what you’ll find and whether that heat source is sustainable for 20 years. There are costs within the industry, and if you drill 10 holes and you don’t find anything, that comes at a cost of time and money to the drilling company or the party financing the venture. So, you must find the right partners who want to drive and execute projects. Configuring the network and partner ecosystem to make the whole thing viable is challenge.

Within the heavy industries sector, there is a strong interest in getting more efficient, and reducing the carbon footprint. Any major industry in the world like steel, paper or cement all have energy efficiency on their agenda, but sometimes the engineering effort to make that heat available can be substantial, and might be outside the company’s focus.

Things are changing within the industry, energy is not a core business focus, so paper or any major industry would say “We’d love to do a project with you, but we have some other priorities. We expect any form of energy contractor to do the job for us as a full project and we are happy to sign a 10 or 20-year electricity purchase agreement, but you would have to do it for us as we do not have the personnel to help you,” and that can be a challenge to do that engineering exercise and not disturb key operations within an industry.

“It is not impossible but you really have to do the whole job and we are a machine supplier, we are not a cement industry specialist, we do not have the expertise necessarily to make it happen. So, the challenge for us as a company who can do one thing, mainly producing small power plants, to also take care of the peripherals and the recruitment to make it all work.

“Personally, I am looking at future markets for Climeon, and often we find that the regulatory framework is a greater challenge than technical viability.

“To give you two examples: some governments have decided to favour electricity production from geothermal energy by feed-in tariffs or favorable investment support schemes. This obviously speeds up business development, and geothermal energy is clearly green and sustainable. On the industrial side, “waste heat” is already produced, typically in the same countries which favour geothermal energy. We argue that this heat is already there, available from e.g. steel and cement plants, and we should use it – because, overall, we can reduce CO2 emissions immediately. Electricity from waste heat should be supported at the same level as geothermal electricity. Governments may argue that support to “dirty industries” is politically impossible. We often end up in healthy debates around realistic expectations and common sense. Technology today is faster than law.”

How does PatSnap fit into your day to day role, and has it added any value to your work?

“We use PatSnap for the whole pallet of IP work, from freedom-to-operate, competitor analysis and landscaping. We are always trying to second guess where our closest competitors are, and what they’re up to in a specific area. We also use IP analysis to find out what they’re developing, and that is a key component in trying to judge where the market is heading.

“We have an invention process which goes from the first idea, screening if it is novel, finding out if there are any competitors in the field, or if there are any dependencies on technologies. PatSnap is at the basis of all of our new projects, and helps us understand the IP landscape and where our niche is. PatSnap is one of the foundation blocks of that process.

“The next thing to understand is whether there can, or ever will be a business case. By understanding the patent landscape early on, that allows us to understand if we have a sustainable position in that market. There are a number of check boxes which need to be ticked before you endeavor into a major development exercise.

“I can’t share any specific business metrics on the impact that PatSnap has had, however what I can say is that we have said no to projects that we felt the IP field was too crowded and that it would not be worth going into that field. Using PatSnap is a powerful tool, and it gives us powerful arguments especially when choosing between a number of projects. It also allows you to see where you have a complete freedom to operate and a strong IP position.

“In the past I was working for a Danish company as their research manager. We were developing inventions using the free tools like the EPO, and USPTO, and I got to know those databases because I used them so often, but PatSnap is a lot more customer friendly.”

Are there personal drivers behind what you’re doing? Why is this so important to you?

“I started off as a chemist working for Shell, but before that I did my university work in combustion chemistry and that was related to the ozone hole problems so atmospheric chemistry.

“I was working for the German government for a short period of time, for the climate & greenhouse gas parliament commission in 1989. During my 10 years internationally at Shell I had a keen interest in the clean energy and energy efficiency field. With Thomas, I found my call in the renewable energy field. We both realised that this was the most important thing we could work on because there is an urgent need given climate change, and we realised we needed to do something about it. Thomas said we needed to start a company to do that.

“Thomas had been out in China, and had seen the contamination and pollution in the cities, and argued this cannot go on. So he said that we have to go on and do something, and it will either be solar technology or geothermal, but we have to produce energy, and that’s been our mission from the start. And yes, we are a commercial company, we are here to make money and create shareholder value, but the deeper mission is to solve the climate issue. So, we both had energy on our minds, but this is the first time we tackled base load for the planet, the potential market for us is global, and with our geothermal technology we can power the planet in a sustainable manner.”

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