Q&A - ENERGYNEST: Zooming in on industrial heat decarbonisation

When most people think of Europe's energy transition, they picture wind turbines and electric vehicles. But there's a less visible, yet critical challenge inside factories — industrial heat. Producing this heat, needed for processes in industries like cement, paper, and chemicals, accounts for a major share of emissions. These hard to abate sectors account for about 20% of the European Union's total CO2 emissions.

This is where the Norwegian thermal energy storage company ENERGYNEST comes in. Their ThermalBattery technology stores surplus renewable electricity as heat at high temperatures and releases it on demand. Switching the energy source for these sectors in a bit to decarbonise production can prove to be expensive and technically tricky. Most factories cannot just flip the switch overnight, especially since electricity prices can be higher and heat demand varies throughout the day.

Thermal storage offers a way to partially electrify heat use without disrupting operations or driving up costs. Over time, this approach can cut fossil fuel use and shrink emissions in some of Europe's most carbon-heavy sectors. 

This Q&A follows up on an interview we did with the company's previous CEO, Christian Thiel about a year ago. Since then, the need for flexible, efficient industrial solutions has only increased. Now, with a new CEO, Alex Robertson, we revisit ENERGYNEST's approach to tackling industrial heat. We explore how thermal storage and power-to-heat solutions actually work, the economics behind them, and the real challenges of electrifying heat-intensive manufacturing.

How would you explain what ENERGYNEST does and why power-to-heat matters in the energy landscape?

At ENERGYNEST, we are tackling a critical issue that is often overlooked: industrial heat.

A substantial proportion of global emissions comes from industrial processes which require temperatures between approximately 100 - 400°C. Our ThermalBattery™ technology is designed to operate at these high temperatures, representing a reliable, flexible and cost-efficient solution to efficiently and sustainably decarbonise heat-intensive processes.

We currently operate primarily in Europe, as well as in North America. Germany, which is our main market, has made huge strides in decarbonising electricity and transport… but industrial heat has largely gone under the radar.

We know it is a critical issue in the energy transition. It is estimated that global industrial heat demand is around 29 exajoules, compared to approximately 50 exajoules used by cars. Yet, industrial heat at present is not receiving anything close to the same amount of attention or investment from governments and industry.

So, we see a huge opportunity here for front-footed companies to get ahead of the curve by using thermal storage. Our technology helps essential manufacturing industries, such as those in the production of paper and pulp, food and beverage, and chemicals, steel, and cement, to implement enhanced efficiencies which will future-proof their operations, all while driving forward the transition to net zero.

What has changed for ENERGYNEST over the past year, and more recently since you joined as CEO in February?

ENERGYNEST began with a technological solution: a way of storing energy in concrete. From there, the company explored the various avenues available for applications for this technology, including storage of energy for solar power plants, and waste heat and steam recovery to enhance efficiency and total energy use.

But over the past year, we have undergone a significant shift to hone in on power-to-heat solutions, which is where we see the greatest impact and market fit. That transition was initiated by my predecessor, Dr. Christian Thiel, and I am now very much focused on driving this refined focus forwards.

So, ENERGYNEST's thermal battery is your flagship solution within the power-to-heat category. Are there any direct competitors?

There are definitely other technologies, but it is very much dependent on the temperature range. To understand the competition, it helps to look at the economics. Electricity is often pricier than gas because gas plants still set power prices. Converting gas to electricity and transmitting it adds costs, making direct gas use cheaper.

To make electrification viable, technologies need to bridge that cost gap. Heat pumps dominate at lower temperatures (up to 150°C), where they are efficient and can deliver three units of heat per unit of electricity. But their effectiveness then drops sharply beyond 100°C.

For the temperature range which we focus on – between 100 to 400°C – heat pumps aren't viable. We use resistive heaters, like industrial-scale kettles, to convert electricity directly to heat. Then we store that heat using concrete-based thermal batteries. This allows us to charge the system when electricity is cheap, sometimes even free or negatively priced and discharge it when heat is needed.

So instead of relying on average electricity prices, we focus on using the lowest-cost six hours per day. That makes the economics much more competitive with gas.

In our temperature range, there are two main categories:

• Power-to-heat without storage: you switch to electricity when it is cheap, then back to gas. This only gets you 10 - 15% electrification
• Power-to-heat with storage: like us. This allows you to use cheap electricity flexibly and potentially fully decarbonise heat

Within storage-based solutions, our concrete thermal batteries are amongst the most scalable and cost-effective.

Does ENERGYNEST offer power-to-heat without storage, or is the focus fully on storage-based systems?

Our focus is on power-to-heat with storage. We discuss both options with clients, but storage typically proves more valuable over time, offering greater electrification and cost savings.

Is there a major cost difference between storage and non-storage systems?

While adding storage increases CapEx due to system complexity, it also unlocks much more value. With storage, you decouple electricity from heat demand, gaining operational flexibility, access to energy markets, and new revenue streams, similar to how an electrochemical battery functions.

Do you buy electricity from the grid or directly from renewable projects?

Usually, electricity comes from the spot market, which is often rich in renewables when prices are low. While we don't typically contract directly with producers, many clients have on-site solar or wind, and we use their excess energy, especially during low-demand periods such as weekends or holidays, to charge the battery. The technology is very flexible, allowing us to use the cheapest electricity available.

How do you manufacture the thermal battery, and how do you manage supply chain risks?

We partner with manufacturers to build the battery using standard steel structures and components. The core is filled with our proprietary concrete mix, produced at regular batching plants. All other parts are standard industrial equipment, mostly sourced in Germany. Since our supply chain is Europe-based and the system is heavy, local manufacturing makes the most economic sense and minimises global supply chain risks.

Will thermal batteries remain core to your business strategy, or are you exploring other technologies?

The short answer is: there is still a huge amount of untapped potential in thermal batteries. Our focus is on enhancing their flexibility, enabling fast, responsive shifts in energy use throughout the day. That kind of agility is rare in industrial systems and increasingly valuable in electricity markets. We're doubling down on our core tech rather than branching into new areas for now.

You say the thermal battery has a lot of untapped potential. Why hasn't it been fully realised yet?

I think it is cultural in part. In many factories, heat is treated as a utility, not a strategic asset, and often managed by facilities teams, rather than energy specialists. Gas is simple and familiar; electricity is complex, with volatile prices and multiple markets. So it can feel risky to make the switch.

But that is changing, with forward-thinking companies recognising the business case for taking energy seriously and integrating thermal storage into their operations. One even told me: "We used to be a paper company that used energy. Now we are an energy company that makes paper". Now that is quite an extreme perspective, but it highlights the broader shift that we are starting to see. Embracing power-to-heat at scale requires companies to prioritise energy strategy and build in-house expertise and we are seeing more of that now.

How have the costs of supplying process heat changed overtime?

Switching directly from 100% gas to 100% electricity for heating can double energy costs, which many companies cannot afford. However, by integrating our technology, we can reduce that cost increase, potentially cutting it by half.

While there is still a premium for electrification, we find that businesses are increasingly willing to pay it, usually either because they want a decarbonised product for branding, or because they see electrification as inevitable and want to gain experience early, even if it's more expensive now.

That said, we don't suggest switching to full electrification overnight. It is more practical to start small, at say around 30% electrification, where costs are often competitive with gas. We can then scale gradually. Meanwhile, gas prices are expected to rise as carbon trading systems expand across Europe, and our technology is improving to deliver more value over time.

Are you seeing clients actually shifting to 30% electrification in their factories?

We have worked mostly with clients aiming for 100% decarbonisation, but now we are focusing more on those with practical constraints. Many still want to decarbonise, but cannot afford a major cost hike. So, we are developing solutions tailored to these clients, enabling them to electrify in stages without a significant price increase.

What is your view on the UK market, especially with the new cap-and-floor mechanism for long-duration energy storage? 

The British market is promising, and one which I have a personal interest in, as I am originally from the UK. Our technology is not limited to six-hour storage, it is ideal for long-duration storage due to very low heat loss (only a couple of percent over 24 hours), so we are closely watching the UK developments and are very much open to exploring any suitable business opportunities there.