Five UK energy companies are being combined by their private equity owners to create a £500m decarbonisation business “D2Zero”.
SCF Partners will join up its portfolio firms Score Group, Hydrasun, Fuel Cell Systems, Powerstar and Global E&C, three of which are based in North-east Scotland, which will all now sit underneath the new venture as their parent company.
It comes after more than a year of planning, including shareholder consolidation and restructuring, with a combined workforce of 4,000 people and revenues of half a billion pounds.
D2Zero will focus on four key areas of emissions reduction, clean hydrogen, power efficiency and management including microgrids, and carbon capture and storage, leveraging the strengths of each player to deliver solutions and to break into new markets.
While the North Sea remains core, the move has an international focus, including an eye on European hubs of Germany and Denmark and the USA.
SCF Partners said it creates a “platform at scale” with each firm having unique capabilities to decarbonise traditional energies and support emerging sources.
Combo of Hydrasun, Global E&C, Fuel Cell Systems, Powerstar, Score Group
Bob Drummond, who has been CEO of Hydrasun since 2003, will lead D2Zero, which itself will have an executive leadership team comprised of the CEOs of each member company.
Sitting above that will be D2Zero’s own board, chaired by Colin Welsh, partner at SCF, which is a Texas-headquartered private equity firm with around $2bn of assets under management.
A number of other senior executive appointments are due to follow in coming months.
“The scale is quite large, certainly from a North-east Scotland point of view,” Mr Drummond told Energy Voice.
“It puts us right up there with the biggest companies around in terms of total employment.”
Each firm’s ownership structure is being combined, with SCF as the primary investor.
However, “from an operational point of view they will run as separate companies, but effectively as a matrix with strong operational and strategic overlap”.
What are they targeting?
Mr Drummond emphasised that the move is about strategic expansion, including, for example, moves to the more general industrial and services sectors for group companies Hydrasun and Score Group.
It will also allow for greater service of projects at the right scale.
D2Zero will not compete with major Engineering, Procurement and Contracting firms on major industrial-scale projects, but there will be opportunity for them on the “sweet spot of smaller projects” where they see immediate opportunities.
“There’s operational overlap as well as strategic overlap. We’ll see how quickly we can gain momentum with this effectively matrix organisation with a new company overseeing it all.”
Mr Drummond pointed to, for example, grid integration as part of green hydrogen and city-scale decarbonisation efforts – bringing in the strengths of Power Star, Hydrasun and Fuel Cell Systems.
More details are expected to be released when D2Zero makes its first formal company launch later in Q1.
More on the cards
N2Zero is already eyeing more acquisitions, and Mr Drummond said more news can be expected soon from the firm on the training and workforce front, which will be among its priority focuses.
D2Zero’s chairman, Colin Welsh, a partner at SCF, said: “Bringing these businesses together is a key first step in creating a decarbonisation platform of scale that offers game changing solutions across a range of technologies.”
Mr Drummond said: “D2Zero stands at the forefront of the energy transition. We provide multiple decarbonisation and clean energy solutions, whilst also providing a range of mission critical products, services and solutions in support of our customers’ operations within key industry sectors. By working closely with our customers on delivering decarbonisation today, we are accelerating progress towards achieving their net zero objectives for tomorrow.”
Companies involved in D2Zero
Score Group – Peterhead-based specialist in engineering and tech solutions for flow control and gas turbines. a global market leader in the provision of advanced engineering and technology solutions for flow control and gas turbine applications across industries. SCF entered in 2020.
Hydrasun – Aberdeen-headquartered provider integrated fluid transfer, power and control solutions and services. Track record delivering early-stage hydrogen projects for transportation and city scale decarbonisation. SCF invested in 2021.
Fuel Cell Systems – provider of hydrogen systems, including the design, build, and supply of proprietary refueling systems for hydrogen mobility applitions and integrated modular electrolyser systems for hydrogen production, storage and dispensing. SCF entered in 2022 via Hydrasun.
Powerstar – smart energy solutions provider, specialising in the design and manufacture of power management technologies, providing voltage optimisation, battery storage, and microgrid solutions to industry. SCF invested in 2021.
Global E&C – Aberdeen-headquartered specialist provider of design, engineering, modification, maintenance and commissioning services to both the conventional and emerging energy industries. SCF invested in 2023.
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