Q&A - ENERGYNEST: Exploring thermal battery storage in Europe

As lithium battery energy storage systems gain popularity, increasing attention is being paid to methods of storing heat alongside electrons. Thermal storage is crucial for enhancing energy efficiency and sustainability, as it allows for the capture and reuse of excess heat that would otherwise be wasted, particularly in industrial processes.

Since its founding in 2011, ENERGYNEST has developed its innovative ThermalBattery technology to convert waste heat into renewable energy. Thermal battery solutions can help decarbonise energy-intensive sectors by electrifying industrial heat and recovering and converting waste heat into usable energy on demand. 

inspiratia sat down with ENERGYNEST's CEO Christian Thiel to discuss the potential of thermal battery storage, its scalability, its distinct advantages, and the critical role of government support in driving its widespread adoption.  

Could you explain ENERGYNEST's role in renewables, particularly in thermal battery storage?

ENERGYNEST plays a crucial role in the renewables sector, especially in thermal battery storage. In the industrial sector, where natural gas is utilised to generate process heat, ENERGYNEST's ThermalBattery technology revolutionises the landscape. Traditionally, industries like pulp and paper, chemicals, pharmaceuticals, and food and beverage heavily relied on heat generated from burning fossil fuels. This has led to the industrial sector accounting for approximately 25% of global emissions.

ENERGYNEST addresses this challenge by integrating renewable energy into industrial manufacturing processes. The ThermalBattery system allows industrial customers to utilise electricity from renewable sources. This electricity is converted into heat using heaters and stored in ENERGYNEST's modules.

In addition, ENERGYNEST's thermal battery captures excess heat from industrial processes and stores it for later use.

Who does your customer base include?

While we are still in the process of scaling, our customer base is diverse and spans a wide variety of industries. We cater to both small family-owned businesses and large corporations with significant heat requirements. Our clients include industrial manufacturers such as paper manufacturers, companies specialising in deep-frozen foods, breweries, and automotive manufacturers needing steam for painting cars. We are also collaborating with an oil and gas company transitioning its refinery processes to bio-refinery, requiring green process heat.

ENERGYNEST's thermal battery is currently operational at YARA, a fertiliser manufacturer in Norway, and Avery Dennison, a paper and packaging manufacturer in Belgium, among others. 

What challenges do you foresee in the widespread adoption of thermal battery storage?

One major issue we encounter, especially in Germany, is grid connectivity. When customers want to transition to renewable electricity but lack their own renewable sources, they rely on green electricity from the grid. However, storing this electricity for later use poses significant problems, particularly in countries like the Netherlands, the UK, and Germany. That is because either the grid infrastructure is insufficient, or upgrading to accommodate higher bandwidths is complex. This grid connection hurdle is currently the primary obstacle to rolling out thermal battery storage solutions across Europe. To address this challenge, we are actively exploring innovative solutions and partnerships to enhance grid connectivity and ensure seamless integration of renewable energy sources into our thermal battery storage systems.

Given the minimal permitting requirements for thermal battery storage projects, why has not the technology scaled yet?

Several factors contribute to this, including historical government support for cheap gas in industrial settings across Europe, which has led to a reliance on fossil fuels. Taxation disparities between gas and electricity, along with exorbitant grid fees for electricity, further hinder the uptake of thermal battery storage solutions. However, recent geopolitical events, such as the war in Ukraine, have sparked momentum towards greener energy alternatives. The resulting disruptions in gas supply have underscored the importance of transitioning to more sustainable energy sources. In addition, rising CO2 prices and the growing emphasis on resilience and energy independence have created a conducive environment for the adoption of thermal battery storage.

What policy measures do you believe are necessary to facilitate the widespread adoption of thermal battery storage, particularly in addressing challenges such as grid connection and permitting approval for renewables?

We require increased government support to overcome the challenge of grid connection. Specific policy measures are needed for thermal battery storage across Europe, particularly in terms of grid access, grid fees, and the speed of permitting approval for renewables.

To promote the adoption of thermal battery technology, two key initiatives should be considered. Firstly, projects aimed at industrial decarbonisation, should be prioritised in terms of regulatory approvals. These projects, which are readily deployable, should be given precedence over others. Secondly, there should be incentives to accelerate innovation adoption, such as a speed bonus. While long-term incentives like feed-in tariffs may not be necessary, short-term incentives can encourage rapid adoption.

Policymakers should allocate resources based on current business case viability. It's crucial to recognise the immediate potential of thermal battery storage in enhancing industrial decarbonisation. Policymakers need to shift their focus from distant visions to actionable strategies that address present challenges effectively.

What do the deployment costs for thermal battery storage projects in the UK and Europe look like?

We have recently adopted a comprehensive approach where we not only provide the thermal storage itself, but also offer a turnkey solution to our customers. This encompasses all ancillary equipment, installation, and related components. It is worth noting that the storage component of a turnkey solution constitutes only 30 to 40% of the total cost. Hence, it is essential to consider the entire solution package to make accurate comparisons.

In our industry, key metrics for project evaluation often revolve around metrics such as the Internal Rate of Return (IRR) or payback period. Typically, we observe payback periods for our projects ranging from as quick as two years to seven years. However, when grid electricity prices are exceptionally high, the payback period tends to be longer, underscoring the need for incentives to drive industrial decarbonisation efforts, particularly in the heating sector.

This highlights the need for reforms in grid fees, electricity pricing structures, and the relative costs between electricity and gas, which are vital for making large-scale thermal energy storage economically feasible.

How does thermal battery storage differ from other forms of energy storage, like lithium-ion batteries or pumped hydro storage?

Thermal energy storage is part of the long-duration energy storage ecosystem, typically involving charging for at least three to four hours, followed by storing for an extended period (4-8 hours) and then discharging over a similar timeframe. This long-duration storage provides significant relief to power grids by absorbing excess offshore wind power and enhancing grid flexibility, which has not been fully recognised in grid fee structures.

Unlike lithium-ion and pumped hydro, which focus on improving electricity infrastructure, thermal battery storage primarily targets the industrial sector's heat demands. This distinction arises from the industrial sector's significant need for heat over electricity. While lithium-ion and pumped hydro specialise in storing electrons, thermal battery storage excels in managing heat for industrial applications, bridging the gap between green electricity from the grid and industrial heat needs.

How adaptable is thermal battery storage in terms of scalability, and what range of storage capacities can it effectively support?

Thermal battery storage solutions are quite adaptable. Typically, our projects range from a minimum storage capacity of 8MWh to as high as 500MWh. These projects are substantial but not overly massive, with modules roughly the size of 20-foot shipping containers. Each module can store up to 2MWh, meaning a minimum-sized project would require four to six modules, while the largest would need 250 modules.

Overall, the prospects for thermal battery storage are promising, especially for industrial decarbonisation.