Challenges of Breaking into Markets and Financing for New Technology

In this episode, Antora Energy CEO Andrew Ponec talks up his company’s game-changing approach to thermal energy storage.

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David Roberts

Back in March, I did a podcast on the possibility of using wind and solar electricity to decarbonize industrial heat, which represents fully a quarter of all human final energy consumption. The trick is to transform the variable energy from wind and solar into a steady, predictable stream of heat by using some form of heat battery.

The idea is that heat batteries will charge when renewables are cheap or negatively priced, around midday when all the solar is online, and then use the stored heat to displace natural gas boilers and other fossil fuel heat sources in industrial facilities.

Among other things, this vision represents a huge opportunity for renewable energy developers — industrial heat is effectively a brand new trillion-dollar market for them to play in. And they can often enter that market without waiting in long interconnection queues to connect to the grid.

Anyway, that episode, which I highly encourage you to listen to at some point, was with the CEO of a thermal battery company call Rondo. In it, I mentioned another thermal storage company whose technology caught my eye: Antora Energy.

Like Rondo, Antora is part of the broad “box of rocks” category, but its tech can do some things that, for the time being, no other thermal battery can do.

I don’t want to say much more here — discovery is half the fun — but I will say I’m as geeked about this technology as I have been about anything in ages. I’ve been thinking about it ever since I first heard about it three or four years ago. Now the company has launched its first commercial-scale system! So I’ve brought Antora co-founder and CEO Andrew Ponec on the pod to talk through how it works, what it can do, and how it could transform industrial heat markets.

So with no further ado, Andrew Ponec. Welcome to Volts, thank you so much for coming.

Andrew Ponec

Thank you for having me, David.

David Roberts

This is so fun for me. I've honestly been thinking about this tech for years and really hoping that you guys would make it far enough to justify me doing a pod with you. So I've been rooting for you. So we're going to get to kind of the role heat batteries and heat storage can play in the energy system a little bit later. But I just want to start with the technology itself. So the basic idea here is you're heating up a rock, right. And what you do with the heat, we'll get to that in a second, but let's just start with the rock itself. Tell me about the material you're using for your rocks and their qualities and why you chose that material.

Andrew Ponec

We looked at a lot of different options for the material that we wanted to store energy in, and there are a lot of different types of rocks, types of solid materials that we might choose. And after a pretty thorough search, we decided to focus on carbon, solid carbon. And that was for a number of reasons. We were looking at different attributes that we thought were important, one of which was cost, one of which was earth abundance. We were also looking for things that had existing supply chains and that were extremely stable and safe for long-term operation.

And when we went through all of that process, carbon came out on top as the best option, although I should say that it didn't come out on top the first time around, actually because of a mistake I made in our spreadsheet. Carbon has a really unique property, which is that it gets better at storing energy as it gets hotter. So the specific heat capacity, its ability to store energy, increases by about a factor of three between room temperature and 800 or so degrees Celsius. So you can imagine what the process would be like to choose a material.

We built a big spreadsheet. We put all of the materials candidates in it. We put what their ability to store thermal energy was, did some calculations on what the cost would be, and then stack ranked them. And in the first pass, carbon was near the bottom, because the mistake I had made was going online and just googling the specific heat of carbon and of course, got the room temperature value. And it was only a few months later, after we were exploring all sorts of other materials, that we kind of went back and looked and said, "Man, carbon has everything we want, except that its storage capacity is really low."

And it was kind of our disappointment in carbon that made us take a second look and then realize this really remarkable property of carbon, that it gets better at storing heat as it gets hotter. And then it was by far the best choice. And that's where we've gone from there.

David Roberts

So I think when most people hear carbon, especially in our space, they think about carbon dioxide, they think about carbon in the atmosphere. So what is solid carbon? What does it look like? What's it used for? Like, what is solid carbon out there doing now?

Andrew Ponec

Great questions. Solid carbon is one of the biggest industrial products that most people have never thought about. We use solid carbon in massive quantities, tens of millions of metric tons a year of this stuff, but it's almost always used as an intermediary in some other process. So the biggest uses of carbon are in the aluminum smelting industry and in the steel industry. So in aluminum smelting, it's actually part of the electrolysis process. And in steel making, electric arc furnaces use it because it's the only material that can survive the hellish environment within an electric arc furnace.

But because none of those go into the final products, we don't think about it very much, even though by mass it's only a little bit behind aluminum as one of the biggest industrial commodities.

David Roberts

Oh, interesting. So part of what falls out of that is, as you say, there is a huge existing supply chain. And so when you say that there's a lot of solid carbon already in use, if it became the de facto material for thermal batteries, would that represent a substantial portion of total solid carbon use? Or is its use so big and so ubiquitous that this is just sort of a marginal thing?

Andrew Ponec

It ends up being a drop in the bucket. We could make terawatt hours of thermal batteries using just a fraction of the carbon that's already processed as part of the supply chains for aluminum and steel.

David Roberts

Got it. So this is a material that is already abundant, already manufactured, already there, ready for you to go. There's no material shortages and what know, people hear materials these days and they think, "oh, what about mining and the social cost of mining" and all that. So what's the sort of like the ESG status of solid carbon?

Andrew Ponec

There are a bunch of different types of carbon, and each of them have different attributes with regard to how much energy goes into them. Are there any other concerns about the supply chain where they're made, are they even mined or are they synthetic? So, just to mention a few. First, carbon comes in many different forms. Diamond is one very expensive form of carbon that we don't use in our system. There's other forms of carbon that are relatively disordered, like the carbon blocks that are used in aluminum. And there are other forms of carbon that are more ordered and more pure, like graphite that's used in electric arc furnace, steel making.

And actually, if you continue going up the chain, there's more and more pure, special forms of carbon. Usually, graphite, when you get to the very high end that's used in things like lithium-ion batteries and even nuclear reactors, uses a very, very special, very high purity form of graphite.

David Roberts

Right. And for that form, there are some supply chain issues. Like, I know that graphite for lithium-ion batteries is one of the supply chain constraints that gets discussed.

Andrew Ponec

That's right. And it was really important for us that we be able to use not these extremely pure and more scarce resources, but that we be able to use the kind of lower-level carbons that are used in these massive quantities in the metal industries like aluminum and steel. The good news is, because all it has to do in our system is just get hot, it doesn't need to do something special chemically or physically. We're very flexible on the type and grade of carbon that we use.

David Roberts

I see. And if I was just looking at a block of solid carbon that's going to go in your battery, is there anything special about it or am I just looking at a big square rock?

Andrew Ponec

It looks like a big, square, dark block. Yes.

David Roberts

All right, so you say that carbon can hold a lot of heat. And I'm assuming you also chose it because it can hold heat and release heat over and over again without degradation. Like how many times can it cycle? How long can it last?

Andrew Ponec

Graphite is a remarkable or carbon in general is a remarkable material with regard to its thermal stability. So just a few different aspects that you can look at it that way. One is that it's thermally stable up to incredibly high temperatures when it's processed to make the graphite, for example for electric arc furnace steel making, they heat the graphite electrically to over 3000 degrees Celsius in what are called graphitization furnaces.

David Roberts

Good lord.

Andrew Ponec

So it's used at extremely high temperatures, industrially. It's also used in industry, for example, in arc furnaces where you have huge temperature gradients where the tip of the electrode essentially has arcing lightning coming out of the tip and is well over 2000 degrees Celsius in air at the bottom of the steel pot, whereas the top of it is actually water cooled to room temperature. So huge thermal gradients, very high temperature capability. And another factor that makes it really good for this is its strength. Unlike almost every other material, graphite gets stronger as you heat it up, up to about 2400 degrees Celsius.

So we often joke that if something is strong enough in our system at room temperature, then that's all we have to do because every part is just going to get stronger as the system starts charging. And that's unlike metal ceramics, almost every other material just gets weaker and weaker, even well below its melting point.

David Roberts

Interesting. So you're heating up carbon blocks. They're in an insulated container, and these are what, like the size of a shipping container? Is that roughly the scale we're looking at here?

Andrew Ponec

That's right. It was important for us that the module be road shippable so we could make it in a factory and then ship it to the customer site.

David Roberts

How is the heating done? Is it just an electrical coil? Is it like an electrical resistance heat? How does the heat get into the rock?

Andrew Ponec

The electricity goes through a resistive heating element very much like a toaster coil, a resistive coil, and heats it up to the glowing hot temperatures that the system operates at.

David Roberts

Yeah, when I talked to John from Rondo, he was saying that one of the things they were worried about is inconsistent heating. And they've come up with all these different ways of trying to evenly distribute the heat as it's heating up the rocks. Is that an issue with carbon as well? Like, are the coils like, sitting next to the rock? Are they going through the rock? Or this might be getting too much in the weeds, but I'm fascinated by this stuff.

Andrew Ponec

It's a great question and please do get into the weeds. I love it. So one of the things that we looked at also when choosing a storage material was thermal conductivity. So its ability to move heat within itself. And graphite has a thermal conductivity that's at these temperatures at least ten times higher than most other types of rocks. And that means you don't have to worry so much about that inconsistent heating. So all of the companies that are working with rocks or bricks or other materials that are non-carbon based have to be really careful about do you differentially heat different parts of the system or even different parts of a single brick or rock. But in graphite it kind of smooths it all out very quickly because of that high thermal conductivity.

David Roberts

Oh, interesting, interesting. Okay, so you're taking this renewable energy, you're putting it through a resistance coil, heats up, heats the solid carbon, and then you heat this solid carbon up really, really hot. So explain the temperatures you get to. And then one of the most fascinating parts about this for me is how you get the energy back out of this rock. And this has to do with heat transfer at high temperatures. Some things that I, a humanities major, did not know about heat transfer, I learned from reading about this tech. So explain how hot the rock gets and then what it looks like to get energy out of a rock that's that hot.

Andrew Ponec

So we heat electrically to over 2000 degrees Celsius. So these big carbon blocks are glowing white hot at 2000 C when the system is fully charged. And those temperatures are very hot from a conventional perspective. They're also much cooler than many of the applications where graphite is used industrially. But at those very hot temperatures, there aren't many options for materials you could use to get the heat out. The conventional way of getting heat out of a thermal energy storage system is to use some sort of fluid. It could be a molten salt, a molten metal, it could be air, helium, something that you're then pumping or blowing through the system through lots of little channels to get good heat transfer and then pulling back out of the system again.

David Roberts

Right.

Andrew Ponec

And if you go up to these very high temperatures, you find that your options are limited. The gases end up having a very low heat capacity. Viscosity increases with air, for instance, with temperature. So it's very hard to pull the heat out at those high temperatures. Similarly, there just aren't that many options that aren't really exotic for liquids that you could use. And even the liquids that you have have some sort of problem typically with freezing at above room temperature. So you could immediately clog up your pipes or pumps or valves if the system ever were to cool off.

So these are some of the challenges that we were facing when we wanted to get all of these wonderful qualities of graphite in our system, including the ability to go to very, very high temperatures, but we weren't sure how we would get the heat out. And so the "aha" moment for us was to realize that we didn't need a fluid at all to get the heat out. That the movement of a fluid through the system to move heat, which is called convective heat transfer, is only one of the three mechanisms of heat transfer. There are two others.

One is conductive, so just moving directly through the solid, and the other is radiative. So that's just light, that's glow. Even though graphite is a very conductive material, it's still too hard to conduct the long distances you would need within the system. But light can travel long distances very easily. And so we realized that by changing the geometry of the system, opening gaps within the system that can allow light to move, would actually do everything we needed as far as getting the heat out of the system, even at temperatures where we had few other options.

David Roberts

Yeah, so the short version of that answer is light.

Andrew Ponec

Yes.

David Roberts

The heat comes out of the rock as light. It is so hot that it is glowing like the sun, and the heat is coming off it as light.

Andrew Ponec

Yes.

David Roberts

So what you do with that light, you do two different things. And this is where I think your battery is different than anything else on the market right now. One is you can shine that light on a pipe full of some fluid. So you heat the fluid up and then you take that fluid off and use it for some industrial purpose. Or you make steam and pipe the steam off for some industrial purpose. That's sort of the conventional thermal battery way of doing things. You heat the rock and then the rock heats up a working fluid and you use the fluid for industry.

Then you have this other option which is shining the light onto special photovoltaic panels to make electricity. So you can get either heat or electricity out of your battery. So first, explain what this looks like inside the box. I'm a little mystified, so you've got this insulated box and inside the box, you've got this giant piece of solid carbon that is whatever, 2000 degrees Celsius. So hot that it is glowing like the sun. What is between that glowing rock and the sides of the box where all the tubes and the PV panels are? How do you modulate the amount of light, say, for instance, falling on the tube full of fluid?

Because presumably you don't well explain how things are working inside that thing.

Andrew Ponec

It's critical to be able to vary the amount of light because a hot object like that is always going to be glowing, it's always going to be shining that light. But you need to decide whether and how you let that light out.

David Roberts

Right.

Andrew Ponec

And so in most of the areas between the very hot carbon and the wall of the unit, there's a layer of insulation. And that insulation is actually just a porous form of carbon that has very low thermal conductivity. So that's sort of the conventional part. The unique part is in specific areas where we want to vary the amount of energy coming out of the system: We have an insulated door that can open and close and that door, when it's closed, is blocking the light from coming out of the system. And when it opens, it's allowing the light to come out of the system.

And that is how we shut the system on and off. It's also how we change the amount of energy coming out. A really critical part of any thermal battery is how you get a consistent discharge as the battery cools off, as you're getting that energy out of the system.

David Roberts

Because you don't want a declining level of energy coming out.

Andrew Ponec

No, exactly. I mean, it would be imagine that similarly in a lithium-ion battery, if as the battery was discharging, its voltage got down, you could almost not get any energy out of it anymore. In lithium-ion batteries, you do get a little bit of a drop off, but generally, you can get most of the power still out until it's at 0% state of charge. And so a thermal battery, to be useful, has to be able to have a consistent discharge. And so the way we achieve that is by progressively opening those insulated doors wider and wider to allow more and more of that light to escape, to compensate for the fact that that light is slowly dimming as the system cools.

David Roberts

Right, so it's like a shutter, like a window shutter almost, that you open depending on how much light you want to let out.

Andrew Ponec

Exactly.

David Roberts

And when you open the shutter, the light comes out and it shines on a tube of heating fluid, a tube of working fluid or a photovoltaic panel. So I think the shining on the fluid and heating up the fluid is pretty straightforward. And I think at this point Volts listeners know that you get a hot working fluid or a hot steam and there's any number of things you can do in industry with that heat, with that hot fluid. But let's talk a little bit more about transitioning the light back to electricity. So you are in an environment that is unlike the environment that normal solar panels are in, to say the least.

You've got a solar panel that is sitting next to a 2000 degree block of rock that is shining super hot light out of it. So presumably you need a special kind of photovoltaic panel, something that can, for instance, resist super intense heat. And this is a big part of what your company has done. I think you just recently opened up your first manufacturing facility to create these things. They're called thermophotovoltaic panels TPV. So tell us a little bit about TPV. What is it? How do you build it? What qualities does it need? What's it look like?

Andrew Ponec

Going one step back, we should talk about why you would ever want to create electricity out of a unit like this. Because we have a great system already that can take in variable renewable energy from solar and wind, use it to heat carbon to high temperatures, and then deliver 24/7 energy to an industrial process that requires heat. And that's a great product. There are many companies out there that have seen the same economics that we have to say: This is an important problem, this could decarbonize a lot of industry in a way that's cost-effective.

David Roberts

Right. This is, I guess, all other thermal batteries just output heat and there's a huge market for that. But you also want to be able to create electricity. I want to put off, just for a minute, the use case for the electricity. Why it's important that you can also do that. But I just want to stick with the tech for a minute. So how does a solar panel stand up to 2000 degree light?

Andrew Ponec

The first thing is that we don't let the solar panel get to the same temperature as the carbon blocks. We actively cool it. And an analogy that you could think of is the sun is very hot. But a solar panel here on Earth looking at the sun doesn't have to withstand the same conditions that the sun is at.

David Roberts

But your sun is very close to your panels.

Andrew Ponec

Our sun is very close, yes, our sun is much closer than the other sun. It's also a fair amount cooler, but it is still much brighter. The combination of those two effects, it being much closer and it being somewhat cooler, still leads to something that is hundreds of times as bright as regular sunlight, which is really helpful in terms of keeping the system very compact and low cost, because you just don't have to make much of these photovoltaic special photovoltaic cells and modules. But they do have to be cooled. And this was surprisingly easy, actually, part of the problem. The power densities, how much energy per area, is not all that high compared to a lot of other cooling applications like power electronics or computer chips or things like that.

So, we have a very conventional water-cooled metal plate that we put all of the photovoltaic cells on. And that plate keeps the cells plenty cool so that they're operating at nearly room temperature even while they're facing this very intense light source.

David Roberts

And because the light is so much more concentrated than typical sunlight, presumably you also want photovoltaic cells that can maximize — I guess it's just not a normal circumstance for a cell to be in. So, what do you need the cells themselves to do?

Andrew Ponec

Yeah, the main difference because of the amount of light on those cells is that we're getting much more current off of the cells, there's just a lot more electricity being generated per area. And the way we get the current off of the cells is just the same way that solar does with metal — they're called fingers — just metal lines on the cell that collect the current off of the front of the cell and then carry it out to the external circuit. And so because we have so much more light and so much more current than conventional solar, it means we need a lot more of those current collecting lines and we need them to be thicker in many cases than they are in solar.

So this is certainly a difference, but one that adds only a small amount to the cost of the cell, but allows it to be very efficient at collecting a huge amount of power per area.

David Roberts

So it sounds like then that these are specialized. You're manufacturing your own TPV, but it doesn't sound like it's super high tech. It's just sort of like a modified solar panel, basically.

Andrew Ponec

There's one other thing besides the power density that really matters, especially to efficiency, which is what to do about all the photons that you can't convert into electricity. So similar to a conventional solar cell, not every photon from the sun and not every photon from the glowing hot carbon has the right energy level to create an electron in the semiconductor that then can be pulled off to the external circuit. Most of the photons actually in both solar and in our application have too low energy and so aren't useful. In solar, all of those photons are a waste.

They essentially go right through the semiconductor because photons that don't have enough energy to create an electron typically go right through. It's transparent to them and then they're lost. In our application, we can do something that's a little bit more unusual, which is we allow those photons the same way as in solar, to hit our cells, go right through, but then we have a really effective infrared mirror on the back of the cells that turns those unusable photons right back around and sends them out the front of the cell right back to the hot carbon where they're reabsorbed.

David Roberts

No s**t — oops, uh, kidding.

Andrew Ponec

I hope you keep that in.

David Roberts

The photon goes back in the carbon?

Andrew Ponec

Yes.

David Roberts

So does that mean none are wasted? What's the efficiency here?

Andrew Ponec

That reflection process isn't 100% efficient, but it is far greater than 90% efficient. So most of those photons that we can't use, we do return to sender, we send back to the carbon that they came from. And that allows us to hit much higher efficiencies than conventional solar cells. As someone who comes from the solar industry in the past, this just feels like cheating. It's like mind-boggling that you could just say that photon wasn't one that I wanted and I'll just give it back and get credit for that. If you send photons back to the sun, nobody tells you that you did the sun a service, but if you send it back to the carbon, that energy is retained within the system and it really does have a chance to come back as a good photon.

David Roberts

So what's a comparison of the efficiency of a standard solar cell versus one of these?

Andrew Ponec

So, in conventional solar, you see cells that are in the 20% range, a little bit higher actually, these days, which is fantastic. And there's actually a theoretical maximum called the Shockley-Queisser limit. That means any single junction solar cell can't get above about 33% efficiency. And that's just because if you look at the math, all of those photons that you can't use limits your efficiency to that 33%. We have already demonstrated a 40% efficient photovoltaic cell in our application that's also just a single junction. And junction just refers to the fact that you can have different types of semiconductor materials that absorb different wavelengths of light.

And for us and for solar, you can boost your performance a little bit by adding junctions. But the key takeaway from that is because of the unique aspect of our application and that we can return these photons back, and we do with high efficiency, we already are able to make cells that are more efficient than the efficiency limits that prevent solar cells from getting to high efficiency.

David Roberts

And that's because you're recycling the photons. That's because you're, whatever you would call it, returning the photons.

Andrew Ponec

Exactly. We're sending those photons back and preventing that energy from being lost.

David Roberts

Cool. Okay, so you get this battery, this glowing piece of carbon. You got the shutter that allows differential amounts of light out, and the light is either falling on a tube with fluid if you want heat, or on a TPV cell if you want electricity. Can a single Antora battery do both of these things? And do you have to switch back and forth or can it do both of these things simultaneously?

Andrew Ponec

Yes, our thermal battery can do both and is doing both. Our pilot unit is discharging simultaneously electricity and thermal, and they are independently controllable.

David Roberts

Interesting.

Andrew Ponec

So the easy way to think about that is you can have a separate shutter in front of your photovoltaics and another one in front of something that's extracting heat. And you can vary independently at the amount, the opening of each of those to change the ratio of heat to electricity you're getting off the system.

David Roberts

Right. So the renewable energy goes in and you can either get heat or electricity out, varying independently, simultaneously, depending on your needs. So that's the battery, and as far as I know, you guys are the only thermal battery that is capable of also producing electricity. Is that true? Are you aware of anybody else doing this?

Andrew Ponec

We're not aware of anyone, but we certainly hope there will be more in the future. Because looking at the decarbonization problem in industry, you have to decarbonize the heat and the electricity.

David Roberts

Yeah. So, let's talk then about use cases. Listeners are familiar with why industry needs heat and they are familiar with the fact that today almost all that heat comes from fossil fuels burned on site. And they are familiar from my pod with Rondo, with the fact that the reason it's changing is that wind and solar have just gotten so cheap. Now they're the cheapest energy available. So, if you can use them for heat, you want to. I mean, this is true across all energy applications. Basically, if you can use wind and solar, you want to because they're the cheapest thing out there.

So, this is going to enable industrial heat to use wind and solar. That use case is familiar enough. What do you get by also outputting electricity? Because if I'm an industrial facility that wants to decarbonize my electricity, I just buy renewables through RECs, right? Or whatever. Like decarbonizing electricity is to some extent a solved problem. Like they know how to do that. So, what does it benefit you to have a single battery that can do both these things?

Andrew Ponec

There's two levels of answers to that question. The first is at the highest level, industrial users are using heat and electricity. And so they need both. They need to decarbonize both. You mentioned that there are options out there like RECs for decarbonizing electricity. What we've seen is that there is a push industrially for people to use electricity that is clean and that is being used at the same time that it is being generated.

David Roberts

Right. Hourly matching. Yes, we've done a pod on that as well.

Andrew Ponec

Exactly. And so, I think some of the solutions that are out there right now that don't have hourly matching we think are likely to be insufficient both from a global climate perspective and for an industrial perspective to say that you've truly solved that electricity problem.

David Roberts

Right.

Andrew Ponec

The much deeper answer really involves the economics of a thermal battery that has the ability to output both. And this gets a little bit subtle and so I'm not sure I would do this on any podcast, but let me walk through why it is so important to have both. The way to think about this is to look at how we would decarbonize electricity first. And you're probably familiar, as are many of your listeners, with the large number of academic and industry studies that have shown that one of the best paths to decarbonizing electricity is to use wind and solar and long duration energy storage.

In order to make that work so that you're covering every hour of the year, you typically overbuild your wind and solar and you overbuild your storage in that you're building way more duration than you would ever use on a daily basis. And that combination can get you to 100% renewables. In some cases that is an attractive option. But let's dive in and look at what's going on with those capital assets. Both of them are now being underutilized. 95% of the time, you didn't need all of that wind and solar you're over generating. And 95% of the time you have a bunch of excess storage capacity that isn't useful.

So, let's say if you look at that long duration storage system, let's imagine that you chose a long duration storage system that was a thermal battery and a thermal battery that had the ability to output heat and power. Now, during that 95% of the time that you had excess renewable generation and excess storage capacity, you can be using all of that excess capacity to provide zero carbon heat. So for no additional money, for no additional capital equipment, you've taken a system that you designed to provide 100% electricity and you've also decarbonized, call it 95% of your heating needs as well. And that's the fundamental economics that drives why it's so important to have something that can do both.

David Roberts

Right. So, to draw an analogy, listeners are familiar with the fact that we have these peaker plants, natural gas peaker plants that are rarely used for much the same reason, right? They just serve peaks. And peaks are by definition rare. It's as though you found something else to do with those natural gas peaker plants while they weren't producing peak electricity. Right. Some way of occupying them and producing value out of them while they were not providing that peak.

Andrew Ponec

Exactly. And in this case, all of that energy is coming from renewables. So this is a ton of clean energy that we would love to have found a use for. But that in kind of the current paradigm of long duration energy storage for 100% renewables and decarbonization is going to waste.

David Roberts

Right. So rather than waste it, we're overbuilding renewables, overbuilding batteries, and rather than waste all that excess capacity, we're using it to get heat.

Andrew Ponec

That's right.

David Roberts

And in those times when we are at peak load and your batteries are being used for that purpose, for electricity purposes, during those short periods of time, we need to meet those peaks that won't disrupt the production of heat in any way. Like, are these two uses ever, do they ever conflict?

Andrew Ponec

That's an important point because there's no free lunch. I said that excess generation and that excess storage capacity was only available 95% of the time. What happens in that remaining five?

David Roberts

Right.

Andrew Ponec

And in that case, we would stop generating heat. We no longer have the excess to decarbonize heat as well. And you essentially devote all of the energy resource, both the generation and the storage capacity, to generating electricity and then you backfill the heat need with some other means. This could be a fuel, whether fossil or hopefully zero carbon. Now, the question would be, did you actually win out of that? We said "Hey, you were overbuilding all this excess wind and solar and battery storage to cover the last 5% of electricity." And now we've just shifted that all over and we're saying, "Okay, now we've covered the electricity problem very cost effectively, but now we still have this last 5% of heat."

David Roberts

Right. Now you got to overbuild your heat stuff to handle that last 5% of heat.

Andrew Ponec

Exactly. So the question is, is it better to have the problem in how do you solve the last 5% of heat or how do you solve the last 5% of electricity? And the answer is, hands down, it's better to have it for heat. And that's for two reasons. The first is the capital equipment to make heat from a fuel is a burner. It's very cheap, it's totally fine to have a burner that sits there 95% of the year and only gets turned on in these very rare occasions where you don't have solar and wind for a long period of time.

That is very different than having a power plant, like you mentioned earlier, a peaker that sits there 95% of the time and is super expensive.

David Roberts

Right.

Andrew Ponec

So, it's orders of magnitude cheaper on a per power basis, per energy flow basis, to have a burner sitting there versus a power plant sitting there. And the other thing is efficiency. We can convert some sort of fuel into heat with 80% efficiency with a burner. Whereas a peaker plant, because you're trying to keep the capital cost down because it's rarely used, you end up with very low efficiency, cheap like aero derivative turbines to provide that peaking capacity. So, you have a huge win on efficiency and a huge win on the capital expenditure for something that sits around all the time if you have that problem in the heat arena versus in the electricity arena.

David Roberts

Right. So, you'd much rather be mopping up that last few percent of heat than you would be mopping up that last few percent of electricity.

Andrew Ponec

Exactly.

David Roberts

Can your rock get hot enough to produce heat for any industrial application or are there still some levels of heat that you can't reach?

Andrew Ponec

Almost all of industrial heat is below temperatures of about 1500 degrees Celsius, which is all achievable or all deliverable with Antora's thermal battery. The only processes that happen at significantly higher temperatures are things like the production of graphite. Because graphite is such a high-temperature capable material, to produce it, you have to go up to these very extreme temperatures. So almost all applications can be served here.

David Roberts

Including concrete and steel.

Andrew Ponec

Including concrete and steel.

David Roberts

Those are the big ones, right? I mean, those are the ones you want to be covering.

Andrew Ponec

Exactly. And this is a really important point about temperatures for thermal energy storage that often gets missed when you have a process that needs to have heat input to it at a certain temperature. Like, let's just say you're talking about a calcination process that's happening at 1000 degrees Celsius. So you need to deliver energy at 1000 degrees Celsius you don't get any credit for the energy you stored between 600-700 degrees Celsius because there's no way to get that heat, that lower temperature heat up into the higher temperature industrial process. Which means that whatever the temperature you process that is the floor for your thermal battery's temperature range and thermal batteries only store energy by moving the temperature of the thermal battery through a range.

Which means if you're talking about that 1000 C process, if you had a 1200 C capable thermal battery, you would be storing almost no energy in order to deliver it into a 1000 C process. Similarly, if you have a 1500 C process, you better be able to store energy at significantly above 1500 degrees Celsius. Otherwise, you're not going to have an effective storage system.

David Roberts

Right.

Andrew Ponec

And that's something that I think is not well understood. It's not just the capability of the storage material to reach the process temperatures, it's to reach temperatures so much higher than the process temperatures that you can take the energy from that storage material and deliver it into the process.

David Roberts

Is it standard to just heat the carbon up to its maximum temperature and just leave it there? And that way you can sort of, with your shutter, release varying levels of heat, but the carbon itself is just as hot as it will get at all times.

Andrew Ponec

So the carbon has to go up and down in temperature because that's what's storing the energy. So if you have heated the carbon up to 2000 C when it was really windy and there wasn't a lot of demand for electricity, let's call that 100% state of charge for the moment. Then if you're stopping charging, if you're delivering heat out of that, you're necessarily dropping the temperature because that is actually getting the heat out of the material. Which means you're going to always be having the temperature fluctuate with charge and discharge cycles. And you're going to have to be varying the opening of this shutter to make sure that the temperature and power levels that you're operating your process at remain consistent.

David Roberts

Right. But if you're supplying, say, 1200 C heat out, 1200 C has to be the floor of those fluctuations. Right?

Andrew Ponec

Exactly. That becomes the floor and actually, practically you end up with a floor that's call it 100 degrees C higher than your process temperature because you still need a driving force to push heat into the process. You can think of heat kind of like pressure in water. In order to get heat flow, you have to have a temperature drop. Just like in order to get water flow, there is some pressure drop across a pipe.

David Roberts

Right. And let me ask this really an academic question, since I assume these batteries are designed to be charging and discharging almost continuously, I think certainly on a diurnal basis. But say you were just storing a bunch of energy as heat and not letting anything out. Say you charged it packed in as much heat as you could, closed the shutter completely and let it sit there, how long would it hold that power? Is there natural leakage?

Andrew Ponec

There's really two totally different designs you could have for a thermal battery. One which is the one that we're developing and that I would say most thermal battery companies are developing, are thermal batteries that are discharging continuously. So ours is always discharging 24 hours a day into the industrial process, and then we're intermittently charging it up and cooling it down. So you're sometimes charging and discharging simultaneously. Sometimes you're not charging, but you're still discharging because you're discharging 24/7. There's a very different type of thermal battery that would be operated where you're charging up, you're then holding that energy, and then you're discharging later.

But it turns out almost no industrial processes want to use energy intermittently. If they could use energy intermittently, they probably wouldn't need storage in the first place because they would just run when it's windy or sunny.

David Roberts

Right. So presumably if you wanted to design to discharge intermittently or even to maybe hold energy over long periods of time, you would just put more insulation. Is it that simple?

Andrew Ponec

Exactly. It's as simple as that.

David Roberts

So let's talk price then. If I'm an industrial process, say, in Ohio or whatever, and I build a big solar field and a big wind farm and hook them directly up to Antora batteries and then I'm getting my heat from those batteries — and my electricity too maybe if I want clean electricity — I'm getting heat and electricity out of those batteries. The heat I'm paying for out of those batteries: How does it compare, cost-wise, to the heat I could get out of a conventional natural gas boiler?

Andrew Ponec

The absolute key for determining the economics for any facility is going to be the cost of the renewable electricity. That's the input.

David Roberts

Of course.

Andrew Ponec

Yeah, there's two parts of it. What's the cost of the renewable electricity and then what's the amortized capital expenditure of the plant, just how much does it cost to pay back the thermal battery? And in most cases, you find that the key factor is the renewable electricity cost. And the amount you pay for that electricity also, though, depends on the characteristics of the thermal battery. For example, a thermal battery that has a very long duration capability has the ability to pick and choose when it charges more than one that has a short duration.

Similarly, one that has a faster charge rate can charge at only the best times, and one with a slower charge rate is going to get an average charge price that's higher because they can't be so picky.

David Roberts

Right. Let me pause here and just spell this out a little bit for listeners in case you're not getting it. So, the price of electricity in electricity markets fluctuates constantly, and it tends to be when you have a lot of renewables in the system, the price of electricity tends to crater for this period in midday when all the sun is out, basically. And so, you have ramps down and then ramps back up price-wise out of that. And so, to the extent you can charge during that very particular period when electricity is basically free or even negative, you're going to benefit.

But if you charge more slowly, your charging cycle is going to extend into those ramps where it's getting more expensive on one side or the other. So basically, you want to be able to charge as fast as possible so that you can make maximum use of that relatively brief time when electricity is super, super cheap. Is that right?

Andrew Ponec

That is a great explanation.

David Roberts

And you can charge quickly.

Andrew Ponec

That's right. We charge quickly. We charge about three times as fast as we discharge.

David Roberts

And that's just the power of carbon there. Is that why you're able to charge so fast?

Andrew Ponec

The power of carbon? Yeah, we can charge fast in part because the carbon is so thermally conductive that as you're trying to push heat into it, the heat is immediately sort of diffusing deep into the block as opposed to just getting stopped up at the surface, which would prevent you from being able to keep charging quickly.

David Roberts

All right, say my industrial facilities then are in Iowa where I have a crap ton of wind and an increasing amount of solar and I have periods of negative electricity prices each day. And I have my industrial facility, I have my Antora batteries and my Antora batteries are charging with renewable energy during those periods of super cheap electricity. Then what's the economics of the heat relative to a natural gas boiler?

Andrew Ponec

We can beat natural gas long term in all of those areas that have high renewables penetration. And that is, I can't emphasize enough what a big deal that is.

David Roberts

Yeah, natural gas heat is very cheap. That's the whole dilemma of this space.

Andrew Ponec

That's right. And natural gas heat in the United States is some of the cheapest in the world. So when we're talking about being able to go into an industrial facility in Iowa or Texas, we could be sitting next to Henry Hub, the trading hub, and in the future still be able to undercut natural gas on price. Which is really remarkable and that's without any sort of subsidy or green premium or anyone having to care about the climate attributes of the battery.

David Roberts

And that's just by virtue of the fact that renewable energy gets very cheap in these markets, gets super, super freakishly cheap. When you say you can beat natural gas, is there a cut off on the price of electricity that makes that possible? Like do you need negatively priced electricity to do that or is it cheap will be enough, super cheap? Like is there a level there, a cut off?

Andrew Ponec

Well, the really simple math to go through with some approximations here is that $10 per megawatt hour, which is one cent per kilowatt hour, corresponds to about $3 per MMBTU. And I use that unit because that's how most natural gas is traded in these areas. As you might be familiar, Henry Hub has fluctuated somewhere between $3 and $5 per MMBTU for a long time. If you account for any sort of industrial energy price, which usually has some basis, some step up in price versus the actual trading hub, you end up with natural gas that's call it $6 per MMBTU.

If you then apply the efficiency of the boiler, the actual price of the heat coming out of the steam, for instance, coming out, is between $7 and $8 per MMBTU. So immediately you can see that you need an electricity price — even if your thermal battery was free and 100% efficient — you need electricity that is cheaper than call it $20 a megawatt hour to be competitive with that.

David Roberts

Right. And that's very cheap.

Andrew Ponec

And that's just the energy conversion. Like, none of that was technology specific. The good news is almost all thermal batteries are included, are very efficient in the 90s. So you don't take a big efficiency hit there. Then it's just a matter of, can you get the electricity cheap enough, and is your thermal battery cheap enough?

David Roberts

Right. In terms of cheap electricity, you're not worried at all that that super cheap electricity is a weird artifact of the way we structure markets today? You're not worried that's going to go away? I mean, presumably with more and more renewables on the system, there's just going to be more and more of these periods of excess production you think?

Andrew Ponec

That's right. There are going to be many periods, and there already are when the renewables do line up with demand and that energy is really valuable. And so you're going to end up wanting to install more solar and wind to cover those periods. But then you're just, along with that, going to get a bunch of energy that comes at periods where the grid is already saturated, and that's going to be very low value power. And that's the power that we want to soak up. And I really want to emphasize the difference there between the charging price is not necessarily the same as the levelized cost of energy of the solar and wind, because you're looking at some of the energy from the solar and wind going to the grid to some productive use that commands a relatively high price and then some of it coming at these wrong times when there's over generation and that is at a very low price. So the price some of the time is going to be lower than the levelized cost of energy.

David Roberts

And what about the electricity? So I'm that same industrial production facility in Iowa, you can get me heat cheaper than natural gas boilers, which is a big deal. What if I choose to get my electricity out of those Antora batteries rather than off the grid. What's the kind of the typical price differential there?

Andrew Ponec

So when we look at supplying heat and electricity to an industrial site, we end up with an overall cost that is cheaper than buying natural gas for the heat and buying grid electricity for the electricity. Now, there's a little bit of a question of do you call that the electricity being cheaper and the heat being equivalent or do you say that the other way around? So you can kind of put it into one bucket or the other, but the outcome is a combined energy bill that is lower than a conventional energy bill would be.

David Roberts

And that is true anywhere where there are enough renewables on the system to produce these periods of kind of overproduction which, god willing, will be everywhere soon enough.

Andrew Ponec

Exactly. And that's the bet that we're making as a company, and that I certainly hope comes true for our sake, but also for climate's sake. Because right now there are a few places in the world, like some of the windy areas in the Midwest where this makes sense today. We see the signs already and a bunch of other geographies of as more and more renewables come online, the economics of a thermal battery like this making more and more sense. But we are absolutely counting on that, extending beyond the geographies where it makes sense today, to nearly every geography over the course of the coming decade.

David Roberts

Right. And it seems like it just unlocks so much for renewable energy developers. Because if I'm building a solar field in Texas now during midday, my solar is competing with all the other solar and I basically am losing money on it. So I'm only kind of making money on my solar on these weird shoulder periods. But if I can take all that electricity during that peak period and sell it to a heat battery, that means I'm selling all my electricity rather than just ride the shoulder periods.

Andrew Ponec

Yes.

David Roberts

It's just huge for renewable energy developers. This seems like such a huge thing. It's just like here's another sink —

Andrew Ponec

Yes.

David Roberts

into which you can dump all your renewable energy regardless of timing.

Andrew Ponec

Yes, exactly. This is such an important point. We are working with and have partnered with some of the biggest renewable energy companies in the world. And what they are seeing right now is that the primary impediment to continuing to deploy renewables in the areas that have great renewable resources is the fact that a huge chunk of their power is now worthless.

David Roberts

Yeah. It's getting curtailed.

Andrew Ponec

Exactly. So if we can put a price floor on that power, even one that's very low, it enables far more renewable development than would otherwise be able to happen in those regions.

David Roberts

Right. And this is a point I made also in that previous pod, which is there's enough demand for industrial heat to soak up all the excess renewables that you want to generate. Like this is not a small sink we're talking about, right? Like if you can get all of industrial heat onto thermal batteries rather than natural gas boilers then you're never going to curtail renewable energy again. Right? Like you're never going to waste another electron of renewable energy. You're going to have all the demand you need out to the horizon.

Andrew Ponec

Exactly.

David Roberts

It would basically end curtailment.

Andrew Ponec

That's right. And that requires you to have thermal batteries that can charge quickly, as we talked about, it requires having thermal batteries in the same geographies and have some overlap between the generation and those energy intensive industries. But I think that is where we are going to continue to see energy intensive industries move as they always have to where energy is the cheapest. And in the past that was where is the fossil fuel the cheapest, where are those molecules coming out of the ground. And in the future that's going to be where are you going to have a lot of excess wind and solar production that can drive these energy intensive processes.

So the great news for the United States by the way is we have some of those best resources in places like the midwestern United States. So, I think you're going to see a pretty dramatic reindustrialization of a lot of these regions because they're going to have the cheapest energy on the planet.

David Roberts

Yes, the new oil, the new energy geography. Who has the intense wind and sunlight and where? Yeah, I was talking with John in that previous pod about: Long term you can imagine the physical migration of industry to these areas where there's lots of sun and wind, which would be a total sort of just a mind-blowing reconceiving of industrial geography. That's just like a huge social and economic shift. I think that's on the way. We're running out of time but I wanted to ask this. You just have the battery, you say you're charging the battery from renewable energy but there's nothing that requires the energy going in to be renewable.

Like theoretically you could just charge your battery off-grid power. What percent of your batteries do you think are going to be saying we're charging on renewable energy based on either RECs or hourly RECs. We're just charging off-grid electricity but we're doing some sort of financing scheme where we're just paying for renewables which is what most businesses that are running on, quote unquote, 100% renewables are doing today versus developers actually building wind and solar off-grid and just attaching them directly to these batteries. At which point you could say clearly and incontrovertibly we're using renewable energy.

What do you think is going to be the balance of those two?

Andrew Ponec

I would say there's one in between that's important to talk about which is where you're building renewables, you have local renewables that are splitting their production where some of the production, the low value production is going to the thermal battery and the high value production is being sent to the grid.

David Roberts

Right. So grid connected, but that would be a grid connected renewables.

Andrew Ponec

That's right, grid connected but still directly connected and hourly matched to the thermal load or to the industrial load.

David Roberts

Got it. So the renewable energy developer, again, this is like financially such a big deal for renewable energy developers. It basically is like here's a second market that's going to sop up the power that I was not going to be able to sell previously. So you have two customers there. But do you think — I'm trying to figure out whether to be excited about this idea of off-grid renewables. Do you anticipate people building? Because one of the roadblocks now for renewables, one of the big impediments is the slow interconnection process is the difficulty of getting connected to the grid.

And this is as you're well aware, a subject of much angst these days. And one of the main things slowing down renewable energy buildout, what these heat batteries enable is you could just build all the renewable energy you want and hook it directly to these batteries and then you don't have to worry about the grid, you don't have to worry about interconnection, you don't have to wait for interconnection. Do you anticipate that being a big piece of this, a big market for this just off-grid renewables connected directly to thermal batteries?

Andrew Ponec

Yes, we think there's going to be a fair amount of that in the future. We have some projects in our pipeline that are exactly that; off-grid renewables being turned into industrial energy without those electrons ever touching the grid. But we do think that the highest value you can do is to allow those electrons at the times when they're really needed on the grid to flow to the grid rather than to thermal battery. Because that's the whole beauty of having thermal batteries. You don't always need those electrons going to that process. You could give them to the grid if the grid is really needing that.

David Roberts

That's right, the grid is handy. It's nice to have. I'm just saying — this would not be like a blank sheet of paper thing you would do. This would just be a response to grid congestion basically. It would just be a response to interconnection dysfunction.

Andrew Ponec

Yeah, and to be clear, in this case, the grid is really handy. It's more that we could help the grid at those times if we were connected rather than we're relying on the grid to fill in. It's really the addition there. But if you have a use for the electricity that's behind the meter and not related to interconnection, you can imagine how this provides a really useful hedge too against interconnection delays because you might be able to fund projects that have some sort of interconnection risk or timeline risk where there's still a use for that energy at an industrial site.

David Roberts

Yeah, you could say I'm going to build this and use it to power heat batteries until I'm allowed to interconnect.

Andrew Ponec

Yes.

David Roberts

Interesting. That alone would just throw open the doors. I mean, what do they say, there's like a terawatt of renewable energy projects waiting in the interconnection queue. If you could just soak all that up with heat batteries while we're waiting for interconnection. That is a lot of renewable energy to unlock.

Andrew Ponec

Absolutely.

David Roberts

Give us a little sort of like reading on where Antora is now. You've built a commercial scale battery that is operating commercially. What stage are you at and what's next?

Andrew Ponec

Yeah, so we've built one of our modular thermal batteries. So it's a modular unit, but we only have one of them so far. We've deployed that, it is operating at a pilot facility and we are now ready to go to larger scale commercial customers. So we just recently leased a facility to start the manufacturing of those thermal batteries and we're going to be delivering those to much larger customers that need multiples of them rather than just a single one in the future.

David Roberts

Every time I talk to a new company with a new type of product, part of what you need to break into markets is good technology, but part of what you need is financing. And big money is notoriously conservatively, right. It wants to finance boring, proven things here. And this is a battery that can output heat and electricity is a new thing in the world. How long do you think it's going to take to get big financiers comfortable with this so that you can get your cost of capital down?

Andrew Ponec

It's a great question. It's one we're always thinking about how to accelerate the path to low cost of capital with big financial players. We're already working with a number of big firms that do finance these sorts of projects. It's key to mention that while we have talked a lot about the thermal battery that does both heat and electricity, which is great, and a very important part of industrial decarbonization comes with some big economic advantages in the future. Our first product is a thermal battery that outputs heat only, just like most other thermal batteries do. And in that case, the technology that we're looking at here is a very simple, boring technology.

What we're doing looks pretty much the same as an industrial graphitization furnace that is running at a far lower temperature, but just that also has these insulated doors that can open and close to release some of that energy on demand.

David Roberts

Yeah, like storing heat in rocks. Goes back centuries, you could say.

Andrew Ponec

Yes, and we love that. It's actually funny. We get this all the time. Potential investors in our company or project financiers that they almost seem embarrassed to call our technology simple. And they're like, "Well, I'm sure there's been a lot of work put into it, but is that really all there is to it? Is it that simple?" And we're always like, "Yes. It's a matter of pride for us to create a simple technology. We don't want to be engineers."

David Roberts

That's my favorite thing about this whole space. Like, I could sit down a fifth grader and explain how this works. There's no advanced physics here. You heat the rock up and then you get the heat back out of the rock.

Andrew Ponec

Exactly. So we have a phase two that involves some new technology that solves a second part of the decarbonization puzzle for industry. But the first product is a pretty boring box with some hot carbon blocks in it.

David Roberts

Because it's so simple, it's not obvious where you'd get innovation. Right? I mean, I can imagine costs coming down with scale and with manufacturing scale, obviously, and capital getting cheaper, obviously. I can imagine ways that the costs could go down. But in terms of technological innovation, where do you see room to improve? Or do you or do you think this is, like, good to go?

Andrew Ponec

The first product doesn't have that much complexity in it. There are a lot of ways that we're going to continue improving the manufacturing process, bringing the cost down over time, but there's nothing big and fancy and shiny and new that's going to be introduced into that process. It's a lot of the just unglamorous engineering of working through supply chains to squeeze costs and improving manufacturing in the factory. I think it is important that it is made in a factory. I think that's been one of the lessons of climate technologies thus far, that we're not doing each of these as a bespoke construction project, that we're making them in a standardized way in a centralized place and then shipping them to customers.

David Roberts

You got to hop on that learning curve.

Andrew Ponec

Exactly. So that's the first product. In the second product, which includes the thermophotovoltaics to make electricity as well, that's where there's a lot of really interesting technologies that we're pursuing right now to bring that cost down. And the reason why that product is being released a little later is to give time for all of those kind of fancier engineering things to make sure that we can produce them at very low costs and high efficiency. And to have shown the reliability.

David Roberts

Is that mostly around the TPV itself? Is that mostly around the thermophotovoltaics themselves, that you're going to be doing those tweaks?

Andrew Ponec

That's right. It's photovoltaics, which are well understood, but it is a photovoltaic that has some unique properties. The high power density that we mentioned, the ability to reflect the unusable light. So this is new. Anytime you're scaling up a new technology, it's going to take some time. But the first product doesn't really have any new technology in it, which allows us to move much faster.

David Roberts

All right, well, Andrew, thanks so much for coming on. This is a real delight for me. I love this whole space. I love the shutters with light coming out. And I love all of this. So thanks for coming on and talking it through with us. And good luck to you.

Andrew Ponec

Wonderful. Absolutely. A pleasure. Thank you so much and looking forward to chatting again sometime soon.

David Roberts

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