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For investors in new decarbonization technologies, one question stands out above all others. When will they become competitive with existing fossil fuel alternatives?
Solar and wind energy have crossed the line; electric vehicles are close. The next candidate for this coveted position is a thermal-based battery used in factories and factories.
Made from rocks, bricks and other materials and heated by electric coils, the electric heating device aims to solve one of the biggest and least discussed issues in the energy transition. Providing high temperatures (100 to 1,500 degrees) to make food, beverages, paper, chemicals and many other materials account for about a quarter of current global fossil fuel consumption. This is also 20% of carbon emissions.
Potential solutions, such as burning hydrogen or capturing carbon, are almost by definition more expensive than existing gas boilers. The same goes for direct electricity: wholesale prices in the UK are around £60/MWh, almost three times the cost of gas.
That's changing now. Advances in heat pumps have overcome the cost barrier by providing two to three times the energy required to operate, making them candidates for temperatures as high as 200°C. Beyond that, electrothermal batteries are leading the way in this field.
Their selling point is that they can use the cheapest six hours of electricity on any given day to heat bricks, etc. These can absorb the midday surplus of solar power in southern Europe, or the midnight surplus of wind power in Northern Europe. The cells then release heat over the next 18 hours.
Today, this would reduce electricity costs by 30% to 40% at wholesale electricity prices. As more renewable energy comes on board, midday prices could drop to zero or even negative.
Best of all, bricks and rocks are cheap – probably costing €15-20/MWh compared to electrochemical cells which cost €150/MWh – and very little energy is lost in the process . They are already competitive in Spain. Portuguese utility EDP last week partnered with San Francisco thermal brick manufacturer Rondo to market the product to customers across Europe.
There are still some hurdles to clear. According to a report from Systemiq, today's thermal batteries can only reach 400 degrees, although some manufacturers say they can heat up to 650 degrees with steam. A lower limit would result in approximately half of the potential market disappearing.
At the same time, electricity price mechanisms in much of Europe do not capture the full benefits of cheap peaking renewable energy generation and reduced grid congestion. But that's changing. As a result, the hot rock business already has a bright future.
Camila.palladino@ft.com
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