How Germany Decarbonises Industrial Heat - ENERGYNEST

**Ed Porter** (0:00)
I'm your host, Ed Porter, and welcome back to Transmission.
Two-thirds of industrial energy demand is heat, not electricity. A significant share of that falls in the medium temperature range, the frying, drying and applying that runs through paper mills, breweries, food plants and chemical facilities. Most of it still runs on gas. In Germany, when natural gas dominates industrial process heat, that dependence is acute. There's an alternative. Thermal storage converts electricity into heat during low price windows, stores it and dispatches it when the factory needs it, cutting the gas bill substantially. My guest today, Alex Robertson, CEO of Energy Nest joins me to talk us through the technology and why the grid is the thing standing in the way. If you're looking at projects in Germany, Modo Energy's solar and battery forecasts are live, or you can ask Ko, our AI analysts, any questions that might arise from this conversation. Link below. Let's jump in.
Hello, Alex, and welcome to Transmission.

**Alex Robertson** (1:15)
Hi, Ed. It's great to be here.

**Ed Porter** (1:16)
Our pleasure to host you, and very excited to get into thermal storage today. What is one thing that everyone gets wrong about thermal storage?

**Alex Robertson** (1:24)
Yeah, thermal storage, thermal energy storage. I think probably the biggest thing that would help people understand it better is if they thought of it more or less like normal battery electric storage. It's got so much in common, but it's cheaper and better.

**Ed Porter** (1:38)
Okay, cheaper and better. That's a great start. And you mean it's got so much in common in that it's kind of... Like, what are the characteristics that make it so similar to battery energy storage?

**Alex Robertson** (1:48)
Well, okay, let's start with the big difference.
We turn energy, electricity, into heat, and then store it as heat, and then deliver it to our customer as heat. We never go back to electricity. So it's one way in that regard. So a traditional electric, electrochemical battery, obviously you go from electricity to your electrochemical reaction, lithium ion reaction, and then back to electricity. So we don't do that. And I think for a lot of people, the kind of one way nature of it makes people think, well, this is a very different beast. But actually, the way the electricity markets work, it functions 90% the same on the market as battery electric storage does. But you have a bunch of benefits.
We can dig into them if you like.

**Ed Porter** (2:33)
Okay. Well, the thing I really like, right, is that whenever you hear about any kind of technology, you should kind of think about the energy side of it. And if somebody tells you that there's 10 stages of it being converted from one thing into another thing into another thing, like every time you make that conversion, you're going to lose energy in that process. There's going to be an efficiency.
And so, you kind of automatically get quite sceptical. But as you're saying, so it's sort of from electricity into heat and then heat gets delivered as heat. Well, there's kind of fewer steps in that, which to me already feels like an advantage versus sort of other sort of texts coming out. But let's then just talk about how the thermal battery actually works. And I know today you've got a prop as well, which I love. So maybe you want to start off describing the system itself and then let's talk about the prop.

**Alex Robertson** (3:20)
Yeah, okay. The system takes electricity from the grid, converts that electricity into hot oil, pumps this hot oil into one of two different places. It either goes to a block of concrete and makes the block of concrete hot, that's the battery. Or it goes to a heat exchanger with the client and we deliver then the client either hot oil or steam or hot air or whatever. They particularly want their heat, they can have it how they like.
So you've got three elements to the system. You've got the electric heater, you've got the concrete block of storage, and you've got the heat exchange interface with the client. And the client for us will be an industrial heat consumer. Before we will come back to the technology, but I think we've got to probably start with understanding who the client is for us. And that would be industry. So a common misconception about industry or just a kind of not known fact is that at least two-thirds of industrial energy demand is actually heat. So if you go to a paper factory, they'll have some electricity demand for running some machines, running their computers and lights and so on. But the vast majority will be gas that they're burning to dry the paper.