Industrial heat and power is the next target for climate tech innovation

One of the biggest obstacles to reducing greenhouse gas emissions is the fact that heavy industry relies on fossil fuels to supply the industrial heat required to make nearly everything.

Whether it's cement or chemicals, paper or plastics, leather or steel, there's heat involved somewhere in the process -- and typically that heat requires fossil fuels, because it's been too tricky to get renewable energy to economically provide industrial heat.

Heliogen is a public company that's trying to use concentrating solar to generate the heat needed for heavy industry.

More recently, investors backing high-tech, high-risk startups have poured hundreds of millions of dollars in the past month alone, to find ways to solve high heat problem.

Rondo Energy is one of those startups. It's received funding from Energy Impact Partners, an investment fund representing the interests of some of the country's biggest utilities and independent power providers, along with Breakthrough Energy Ventures, the multi-billion dollar investment firm founded by Bill Gates and other billionaires to fund technologies for the energy transition.

Gates' Breakthrough Energy is also a big backer of Antora, another company that's tackling the heat problem with a technology that's very (very) similar to what Rondo is doing.

“The manufacturing sector—including notoriously hard-to-decarbonize industries like cement, steel, and petrochemicals—accounts for a staggering 30% of global greenhouse gas emissions. Today, there aren’t scalable solutions to clean up the major drivers of these emissions—heat and power from combusting coal and gas,” said Andrew Ponec, the chief executive of Antora, in a statement

Like Antora, Rondo Energy is also using renewable energy to heat batteries to temperatures well over 1,000 degrees Celsius.

“Decarbonizing industry is the next frontier and is a huge challenge,” said Shayle Kann, partner at Energy Impact Partners, and an investor in Rondo. “Rondo’s breakthrough innovation opens a surprisingly simple path: converting electricity directly to heat and storing it. This technology, coupled with the plunging price of wind and solar, means the industrial sector can profitably decarbonize many processes, at large scale, now. This is great news, because the world can’t wait.”

Breakthrough Energy appears to be a fan of both technologies.

“We believe the Rondo Heat Battery will prove critical to closing stubborn emissions gaps,” said Carmichael Roberts, Breakthrough Energy Ventures. “The cost of renewable energy has been steadily falling, but it hasn’t been an option for industries that require high temperature process heat since there was no way to efficiently convert renewable electricity to high temperature thermal energy. Rondo enables companies in industries such as cement, fuels, food and water desalination to reduce their emissions while also leveraging the falling costs of renewables.”

And Roberts had similar things to say about Antora.

“Clean energy storage for industrial heat and power will be a key enabler of tomorrow’s zero carbon world. Antora Energy will have a major impact on lowering carbon emissions stemming from the manufacturing industry," Roberts said.

Beyond the investments that Breakthrough Energy Ventures is making into the industrial heat market, Bill Gates has invested some of his own considerable personal wealth into a hydrogen technology aiming to tackle the same problem.

The company that caught Gates' attention is Modern Electron, and the company's founder, Tony Pan, thinks it has the ticket to reduce emissions from small and medium sized businesses (not just big industrial companies).

The key is in Modern Electron's thermionic converter, which converts heat into electricity and in a technology that converts point of source natural gas into graphite and hydrogen.

“If you’re burning fuel just for heat, from a physics standpoint it’s very wasteful,” Pan told TechCrunch in an interview. “If you were burning natural gas or coal or biofuels in a power plant, you’d be generating electricity first, because electricity has about four times the value of heat. The reason we don’t do that is you can’t scale down power plant tech to the level of a commercial or residential building. This loss has been known about for a century — if you can generate heat and electricity, it’s like a holy grail.”

TechCrunch rightly called out the applications in home heating, a market that's definitely of interest to Pan and the team at Modern Electron. But Pan's thinking just as deeply about industrial applications.

"Ultimately heat is 50% of final energy demand. 40% of that heat is used in buildings, residential and commercial and 60% is in some kind of process heating," Pan said. "Everything from cooking... food and agriculture, steel, concrete and most manufacturing processes use heat. That heat gets into form factors that makes heat difficult."

For Pan, the Modern Electron solution is about getting a zero emission replacement for old heating systems.

Modern Electron still uses fossil fuels as the feedstock, but the clean burning hydrogen its converters produce are easier to convert into electricity or burn for zero emission heat on site.

In some ways, Modern Electron looks a bit like the old vision of Bloom Energy, which wanted to bring hydrogen to every home.

Modern Electron’s fundamental insight and strategic positioning is that in this energy system transmission and distribution is going to be one of the biggest chokepoints.

Let’s say you have free renewables. At the best case the cost of delivered electricity drops by half because transmission and distribution are 44% of the cost and that’s the part that we build the slowest," says Pan. "We’re looking for things that don’t need new transmission and distribution infrastructure. In the USA we ship more energy through our gas grid than our electricity grid. There are going to be lots of folks using gas infrastructure for a very long time and how can we decaronbize that? How can we remove that carbon atom from that?"

Those are the questions that Modern Electron, Antora, Rondo, and a host of other startups are hoping to tackle. Meeting the climate goals the world has set may depend on all of them being right about the answer.