In this episode, I interview Fourth Power CTO Asegun Henry and CEO Arvin Ganesan, who bring high-profile experience in energy research, policy, and regulation to their new and promising thermal storage startup.
Text transcript:
David Roberts:
Here on Volts, I do not typically cover companies that are early in the startup game. Sifting through the endless startups and trying to predict which ones will be real and which ones mirages is a recipe for madness, a game I have neither the aptitude nor the desire to play.
But I have made something of an exception for the company featured on the pod today. A couple of reasons that Fourth Power — which just recently came out of stealth with its very first, $19 million round of seed investment from Bill Gates’ Breakthrough Energy Ventures and others — caught my eye:
First, it uses renewable electricity to heat up a box of rocks to store energy, and listeners, if someone is going to use renewable electricity to heat up a box of rocks to store energy, I am going to cover it. It should be clear by now that I am borderline obsessed with this whole category.
Second, Fourth Power has some extremely impressive names behind it. Asegun Henry, founder and CTO, is a long-time researcher in thermal storage and transfer, at Georgia Tech and then at MIT. He's been a researcher for decades, involved in several cutting-edge discoveries; if this is the company he's going to leave academia to run, I'm going to pay attention.
Arvin Ganesan, CEO, is best known for his five-plus years with Apple, where he led global energy and environmental policy, but he's also familiar with the industry from the regulatory side, having led EPA's regulatory efforts under President Obama. If he's going to leave a global powerhouse like Apple to run a startup, I'm going to pay attention.
So with that said, Asegun Henry and Arvin Ganesan, welcome to Volts. Thank you guys so much for coming.
Arvin Ganesan
Thanks, David.
Asegun Henry
Yeah, thanks for having us.
David Roberts
So Ase — that's what I'm told we'd call you — we're going to start with you, get into the nuts and bolts a little bit, get the technical stuff a little bit, and then Arvin and I'll come to you a little bit later with some questions about market stuff. So what we're talking about here, what Fourth Power has got is a system, a big system, a big energy storage system, utility-scale storage system, you say the full implementation is this is going to be about a half a football field big. And I want to kind of walk through the steps here.
What's involved in this? Lots of them, I think will be familiar to Volts listeners since this is the third box of rocks company I've covered. But the first step is just, you take the renewable energy, you run it through basically resistive heat, what looks like a big radiator, and you use that heat to heat up a thermal transfer fluid in some pipes. So far, so familiar. But your thermal transfer fluid that you use to move the heat around in the system is liquid tin. T-I-N which — like, what?! I don't know anything about — why, how? So, tell us a little bit about how you came to liquid tin as a heat transfer fluid and how you manage liquid tin, which is only liquid at extremely high temperatures.
Asegun Henry
I'm really happy that we're starting with this. So how we settled on tin is, I would largely say, at a high level what we're doing is informed by many lessons learned from a couple of different other renewable energy or storage related technologies that have kind of come into play. The first and probably the most important central one is concentrated solar power. So, for those who may or may not be familiar, that's the technology — it's essentially considered a proven technology, there's 100 plants in the world. There are different embodiments: Some use oil and then transfer to molten salt.
Some just use the molten salt straight out. But one of the central issues for concentrated solar power — which it has paved the way so tremendously for what it is we're doing by proving out all kinds of important issues that I'll come back to in a second — but the plaguing issues is corrosion.
David Roberts
Yeah, this is what I hear from everybody who's been involved in that game, is that molten salt sounds good on paper, but it's just an absolute nightmare to actually work with.
Asegun Henry
Exactly, exactly. Yeah, I mean, molten salt, inexpensive medium to buy, and it really just has to do with chemical interactions. And so what we did, as a starting point for everything that we did, we ultimately said, "what if we start from scratch and rethink the problem from scratch?" and we know corrosion is an issue, and it only gets worse the hotter you go, it's like exponentially worse. We ultimately want to go to really high temperatures. So why don't we just start with materials that we know will work, that experience no corrosion whatsoever. So if we just make that our foundation, like, we're just going to pick materials that are chemically compatible.
There is no corrosion at any timescale. If we start with that, then now we've flipped the problem, and now what we've got to deal with is, how do you make a system out of those materials? But at least one thing we've crossed off is corrosion. There's no corrosion. Right. So that's actually how we started ten plus years ago. We started by saying, "let's flip the problem on its head." Usually the way these things would go is mechanical engineers would go into their room and come up with a system diagram and say, "okay, we want to do this, that, and the third," then throw the problem over a wall to material scientists and say, "can you give me materials that will do these things that I want?"
And when you approach the problem that way, it has produced a number of things that are really challenging on the material science side. And so my background, my PhD, is in mechanical engineering, but a lot of my PhD work, a lot of the postdoctoral work I did, was very heavily rooted on materials. So I have some materials insight and intuition, and my thinking was, we just need to start with the right materials. We need to make it a very boring material science problem, such that there's no chemical interactions. And so tin is special because tin has no chemical interaction with carbon at any temperature, they don't form any compounds, and this is our foundation.
So to your initial question of, like, why do we use tin? That's one of the most important reasons.
David Roberts
And we should note that the pipes carrying the tin are made of carbon.
Asegun Henry
Absolutely, yeah.
David Roberts
Right. So, there's no interaction happening between the fluid and the pipes.
Asegun Henry
Exactly. And essentially, almost our entire system is made out of carbon. So that's the second lesson, which is you start mixing in too many different materials and each material may have a different — what we call coefficient of thermal expansion — a different rate at which it grows. And what you want to do is, ideally, you want to match those things so that everything grows at the same rate. Nothing breaks itself apart. So we try to simplify things in that regard and just have basically one material, it's predominantly one solid, and then the liquid tin and the solid.
Carbon makes up almost all the mass in our system.
David Roberts
Most of what you're using is carbon. The blocks you're heating up are carbon. The pipes and the pumps that circulate the fluid are made of carbon. So, really, almost everything is carbon and then tin. Is that basically it? And I know carbon, in terms of material supply, is a trivial problem. There's plenty of carbon out there. Is tin at all expensive or rare or difficult? Does that pose any problems at all?
Asegun Henry
The short answer is no. Getting tin does not pose a problem. The second reason we chose tin, actually, is because of this issue. So there's another metal — I do want to address one thing you mentioned about the temperature at which you have to get to for tin to be liquid. That value is very low for tin. So, tin melts at a very low temperature of 232 degrees Celsius. This is a temperature you can get to in a toaster oven. And so we routinely do that when we do things. We can actually put stuff in a toaster oven and melt it out.
You can also think of, for those that may be familiar with soldering, the little solder beads that are on, like, computer processing boards and whatnot, that's predominantly tin. So, tin is generally considered a very low melting point metal. And there is another choice, which ideally, if you didn't have to care about cost, would be even nicer, which would be gallium, because gallium melts right near room temperature. But 232 degrees C is nothing compared to the temperatures that we're going to. So we are very far above the melting point, or call it the freezing point. So there is an abysmal risk of freezing in our system because we're so far above the melting point.
The third reason, I would say, has to do with safety. So our system was designed from scratch with safety in mind. If you think about liquid metals — there's quite a bit of literature, people have been looking at liquid metals as heat transfer fluids for a reason that I'll come back to in a second for decades — and it's extremely attractive from a heat transfer standpoint, because liquid metals are the ultimate heat transfer fluid in the universe. There's literally nothing better, and I'll tell you why in a second. But if you look at the contexts where a lot of work has gone on to look at liquid metals, it's been in the context of nuclear.
There are a number of nuclear embodiments for nuclear reactors that are actually cooled by liquid metal. And the reason they're interested in liquid metal is because the extremely high heat transfer rate gives you now this really nice safety net against the meltdown, because you got something that can transfer heat way faster than boiling water. And so in the case of nuclear, most of the focus was on what are called alkali metals. Alkali metals are like sodium, lithium, the elements that are all the way on the left-hand side of the periodic tables. These elements are extremely reactive.
This also tends to embolden them with low melting points. So they were attractive from that standpoint, again, similar to tin. But the challenge and the issue with them is that they have very, very strong reactions with oxygen and water. And so they pose some significant safety hazards in that regard. People have built systems, you can work with them safely, it can be done. But tin is nice, because it does not have that property. You can actually heat up tin in air. It will gradually form an oxide crust, but it does not react violently. You can actually — you know, it can interact with water.
It can touch water, it doesn't explode. Things like sodium, on the other hand, do. And so we wanted to stay away from all the elements that pose significant safety hazards. And so safety was the other key consideration in why we chose tin.
David Roberts
So, tin has got a low melting point. It's nonreactive, and so it's safe, and it's an incredibly efficient heat transfer medium.
Asegun Henry
You got it.
David Roberts
That's the sweet spot there.
Asegun Henry
Exactly.
David Roberts
So then you use this radiator to heat up the liquid tin in the pipes. Put the heat in the tin, basically, and then the pipes carry the tin to the next module, which is these big blocks of graphite, basically, big blocks of carbon. And then the pipes circulate the tin around, through the blocks, over the blocks. How does the heat get out of the tin and into the blocks?
Asegun Henry
Yeah. So think of it as like Legos. So you can stack the blocks. We don't want to have to do additional machining or modification of the blocks straight from the way they're manufactured. We want to keep the cost low. So you can just stack the blocks up and think of it like a lattice. And in between the blocks, you leave gaps. So where the way the blocks are positioned, there's a few-inch gap in between each one. And in between the blocks is where we slide the piping. So the piping carrying the liquid tin sits in between.
And the predominant means of transferring the energy between the, let's say, outer surface of the graphite piping network that's carrying the liquid metal and getting it into the blocks is actually radiation. It's thermal radiation. It's light. And this is actually why we named the company Fourth Power, because we exploit this. We exploit the fact that the amount of light emitted by those pipes scales with temperature to the fourth power.
David Roberts
So, wait, the pipes themselves, if I could peek inside this thing, are glowing?
Asegun Henry
Absolutely. And just to kind of emphasize this point, because I don't think, unless you've kind of taken a physics class, sometimes this may evade you. When I say fourth power, what that means is suppose you have a given temperature, let's say, where it's orange hot or starting to turn white hot. We'll call that temperature one, and you look at how much light is coming out of the piping. If you now double the temperature, you don't get twice as much light, you get 16 times more light. You get two to the fourth power times more light. So this function of how much light is coming out of something as it gets hotter is such a steep function that we want to push that function as high as we can.
And the reason it matters so much for us is because the hotter you go and the higher you drive this heat flow as the power density goes up, meaning the more light you're emitting per unit surface area of pipe, you're now reducing the total size of the system because for a certain power rating, you now need less equipment.
David Roberts
Right.
Asegun Henry
This helps tremendously on not only materials costs, but construction cost. Less pipes to put together.
David Roberts
Right. So in a sense, more heat is substituting for more material.
Asegun Henry
Yeah, exactly. You can say that the heat transfer rate is substituting for material. And so that's part of the reason we push to such high temperatures, really trying to push it to its extremes to truly take advantage of that. And it's ultimately about saving on cost.
David Roberts
Okay, so the pipes go through the blocks. They light, they emit light. This whole idea that beyond a certain temperature, energy comes back out as light; I've sat with this for months and it still blows my mind a little bit. So they're glowing. They heat up the blocks. And there's not, I don't think, a lot to say about the blocks. They're literally just rectangular blocks of graphite until the rocks themselves are glowing. And that's how you're storing the heat. And so then, if you want to get electricity out of this system, describe the next step, because I'm not totally sure I got this.
Asegun Henry
As you noted, the next step is after you've got all of this heat now stored in these blocks, now you can turn your heater off, and this big bank of blocks is insulated from the environment so that heat is trapped inside. And when you now want to get electricity back, you're going to use this big bank of blocks as like a giant heater. And so it keeps the liquid metal hot because there's so much energy trapped in the blocks. So what you do is you flow the liquid metal. The liquid metal is going to come out at the peak temperature, which for us is 2400 degrees Celsius.
It then flows over to another subsystem, which is now optimized for converting the heat back to electricity. And so you have liquid metal now flowing through graphite panels or walls that have channels cut in them. As the liquid metal flows through, you can think of it as creating like a furnace or a series of furnaces, many furnaces in parallel. And think of it as like a liquid metal powered furnace. So it's extremely intense light inside the furnace. And we have thermophotovoltaic cells that are mounted onto a heatsink. It's like an aluminum extrusion with water and gas flowing down it.
And that heatsink — think of it like a stick, we call it a power stick — that power stick is lined with solar cells.
David Roberts
Yes. I want to get into the TPV in a second, but I just want to make sure I have this just conceptually. So the radiator heats up the fluid, the fluid heats up the — theoretically, you could just heat up the fluid and then send it straight to the TPV panels, right?
Asegun Henry
Correct.
David Roberts
If you weren't doing storage. But the whole point is storage. So you heat the fluid, it heats the blocks, and then when you need to get it back out, the blocks reheat the fluid, and the fluid goes to the power module, where it is hot and glowing, casting off immense light. There's all these little, sort of look like little tiny furnaces in a row here, where light is coming out of each one from the metal. And then you've got these sticks with TPV panels. And just for listeners who may not know, TPV is thermophotovoltaic, basically, you're harvesting this light that the glowing fluid is emitting with these TPV panels.
So let's talk just for a minute about TPV. What is thermophotovoltaic versus the sort of PV that people are familiar with?
Asegun Henry
The physics of how TPV works, how thermal photovoltaics works is essentially the same as a regular solar cell. The key difference is that you're optimizing for a very different situation. So when you are designing a solar cell that is going to sit outside and look at the sun, that light's traveling 93 million miles all the way to get to Earth, and you get your one chance to convert it. If you miss it, if you don't catch it, it's gone. Let's say you put a mirror on the back of your solar panel. Some light comes in, hits your panel, some of it may transmit through the panel, you reflect, some, it may go through your panel a second time on the way out.
And once it's gone, it's going to space. That's it. You only get that one chance. So your efficiency in that situation is dictated by what fraction of the light you're able to actually capture and convert, because you only get these two chances. Conversely, in our situation, and this is why some people in the media have started calling it sun in a box, because we're at like half the temperature of the sun.
David Roberts
That's wild.
Asegun Henry
And so it's like we've encased our own miniature sun inside of a box on earth. And now we get to choose when we want the PV panels to be exposed to the light. But the key difference here is if we don't convert light that comes in, we can send it right back. And this sun, because we paid to bank this sun hot, we want to keep it hot. So everything we reflect and send back has a chance to be reused.
David Roberts
So the light comes out of the block, goes through the TPV, bounces off a mirror and goes back into the block.
Asegun Henry
Exactly.
David Roberts
Is there no loss there, or is it just low?
Asegun Henry
Oh, it's low. There is some loss. And this is an important aspect of how to optimize these systems is to optimize around what fraction you're going to lose. So, there's no free lunch; there's no perfect mirror. So that mirror is going to absorb some small fraction of the light. And this is how you optimize how much of it do I really need to convert on every pass? And so the beauty is that we can make really good mirrors and so we can actually just concentrate on getting the photons converted that have the high energy and have the frequencies that we can convert very effectively.
And that allows us to now up the efficiency of the whole system. By doing that, by just focusing on the light, we can convert the best.
David Roberts
You're skimming off the cream of the light.
Asegun Henry
Exactly.
David Roberts
So, you've been actually involved in TPV research. I read the paper that you co-authored in Nature. It sounds like you have now got TPV panels up to 40% efficiency, which is wild. I think normal PV, I think, is currently topping out around like 26-ish percent. So 40% is substantially more efficient than normal PV. And so I'm curious, are there physical limits there? How high can TPV efficiency get? How much of a fraction of that energy can you pull out?
Asegun Henry
That's an interesting question. Yeah, the theoretical limit is very high, but the practical limit is significantly lower. So our target is actually to get to 50%. So we have some additional modifications to the cells that we are looking to make to further improve them to get to 50%. And we're very excited to be moving down that development path.
David Roberts
Interesting. Okay, so the blocks emit this light into the TPV panels. The TPV converts it to electricity. You pump out electricity, and then the heat transfer fluid goes back to the start. And this is kind of the loop.
Asegun Henry
Exactly.
David Roberts
This liquid tin is traveling in this loop, picking up heat, dumping it off into the blocks, picking it back up from the blocks, taking it over to the TPV, and then going back to get reheated originally. So, what is the efficiency of the system overall? So, relative to the amount of electricity that's going in, how much electricity did you get out on the other end?
Asegun Henry
So our target is to get that to 50%.
David Roberts
50%.
Asegun Henry
It's essentially governed almost entirely by the TPV efficiency.
David Roberts
Yeah, I was going to ask, what's the limiting factor here? I assumed it was the TPV.
Asegun Henry
Correct? Yeah, the limiting factor is the TPV. There's very little loss turning electricity into heat on the way in. There is very little loss of the heat because it's well insulated, and there's little loss on the way out, converting back to — well, there's a huge loss in terms of converting light to electricity.
David Roberts
Right.
Asegun Henry
But then once you've got it as electricity, getting it back out and onto the grid, very small losses there. So those become minuscule. It's really dictated by the TPV.
David Roberts
Right. So the TPV, the farther you push the TPV, the farther you push up the total.
Asegun Henry
Absolutely.
David Roberts
And so, 50%, just to give people a kind of context, there's a lot of energy storage mechanisms and technologies floating around now. So, how does that compare to, say, a lithium-ion battery?
Asegun Henry
Our efficiency target is considerably lower than lithium-ion's performance. And I think this gets to a really important issue that has kind of emerged over the last, call it five to ten years, in terms of our understanding of the importance of efficiency as it compares to the importance of cost. So, over the last, let's say, five to seven years, there's been a number of interesting papers. There are three that come to my mind that are independent investigations that really looked at this issue of what are the attributes, if you think about storage technologies in general, that storage technologies will have to have?
What are the cost targets that we're going to have to hit if we're going to have a fully renewable grid? And what I found so fascinating is that these three independent investigations came to essentially the same conclusions. And the conclusion that they came to — two that I'll highlight, which I think are the key things that got us excited about this particular embodiment that we're pursuing — the first is that cost actually matters more than efficiency. And that was not obvious because this idea of, you could go from electricity to heat back to electricity, we've known this for decades.
We could do it, sure. We just thought it was a dumb idea, because it's like we expend so much effort going from heat to electricity the first time, why would you ever go back to heat again?
David Roberts
Yes, that is the question that faces all these systems.
Asegun Henry
Yeah. So much so that it was actually considered a joke in the field. Like, we used to call it a thermodynamic crime to go back to heat. It was like, "why would you ever do that?" And when these papers came out and this kind of realization started to emerge that we don't need to get like, 2x cheaper than lithium-ion, we need to be like more than 10x cheaper than lithium-ion. When it started to come out that we needed to get to ultra-low cost, and, like, lithium-ion has no chance of ever getting there, is when we started saying, "well, okay, well, what can we sacrifice?"
And then it turns out efficiency happens to be one of the things you can sacrifice. And so it's like, I'd rather take a factor of two hit on efficiency as long as it buys me an order of magnitude cheaper cost than to try to have a higher efficiency, and I'm ten times more expensive.
Arvin Ganesan
And I think, let me use a real-world example, right? If you're looking at a four-hour battery and you have a very high round-trip efficiency, you need to find 4 hours of low-cost renewable energy to make the round trip worthwhile. If you look at California, I don't know, maybe just ten years ago, there was no duck curve, right? There were no best 4 hours, 8 hours. Now, in 2023, 2024, there's an oversaturation of renewables, largely from the jump right from 08:00 in the morning till 06:00 at night, you're seeing about zero net.
David Roberts
Got a long, flat belly, the duck curve.
Arvin Ganesan
Exactly. So if California portends what other high penetration renewable grids look like, there's going to be plenty of opportunity to find those hours to make up for that lower round-trip efficiency. And you're getting it at ten times cheaper the cost. So that's kind of the overall value proposition to the grid and to regulators.
David Roberts
I was going to say another piece of this puzzle is just the newly available pool of dirt cheap renewable energy, especially midday. I mean, this is, if you've ever listened to Volts, this is a theme that comes up on almost every Volts pod is the extraordinary opportunities opened up by super cheap renewable energy. So, Ase, one more technical question, and then I've got a bunch for you, Arvin. So, intuitively, I see pumps circulating fluid between four different modules. That sounds to me, my uneducated ear, like a lot of moving parts, a lot of mechanical moving parts, which sounds to me like a lot of things that can go wrong, a lot of maintenance, a lot of sort of operational costs.
How did you think about trying to minimize that?
Asegun Henry
Yeah. So, in short, it's actually only one set of moving parts, which is in the pump. Everything else is still. And we have thought very carefully and very thoroughly about how we maximize the lifetime of the pumps. And ultimately, if you think about pumps, I mean, let's go back to concentrated solar power. You look at the failure modes in the pumps. They are related to chemical corrosion. So we did ourselves a million favors by getting rid of corrosion from the beginning. So what we are left with are, like, mechanical issues, which are things that we are very well equipped to deal with very well — we have decades of knowledge about.
We know a lot about fatigue, we know a lot about creep, we know a lot about all these things, and we know how to design for it. One of the things I remember when I was in undergrad that I found so shocking as a mechanical engineering student, when we had a class where they were introducing the fatigue curves, and they were showing us this idea that you could make, like, a rotor for a car, and if you make it sufficiently thick, it has infinite life. And it made me realize, if you really wanted to, you could actually make a car that never breaks.
David Roberts
Right. It would just be slightly over-engineered.
Asegun Henry
Well, also, you'd never get to sell a second car. So cars, for example, are designed to fail at a certain point. And so we are designing these pumps to never fail.
David Roberts
So what is then? If I install one of these things, it's running, what is the lifetime? What would you promise someone that bought one of these from you? It will run mostly trouble-free for how long?
Asegun Henry
We are all targeting everything beyond 20 years life.
David Roberts
20 years.
Arvin Ganesan
To put that number in context, I think that if you're looking at existing electrochemical batteries, it is much, much shorter than that.
David Roberts
Yeah. So, Arvin, this is a question for you, but I think maybe, Ase, you'll have something to say about this, too. This was the very first question I had when I discovered about the existence of your company and first heard about it. And the more I've read about it, the more this question has come up over and over again, it did not get answered in any of my research. So I'm super interested in the answer to this. So, Arvin, at Volts, we have heard from a hot rocks company called Rondo that uses renewable energy to heat up rocks and then sells heat.
They sell industrial heat. And then we have heard from a hot rocks company called Andora that uses renewable energy to heat up rocks, and they sell electricity and heat out of their unit. You are just selling electricity. And as listeners to those previous pods know, if you just convert electricity to heat and then sell the heat, use the heat, you get really high efficiency. You get like 96-97% total efficiency. Like, you can get a lot of heat out. So why aren't you selling heat in addition to selling electricity? What was that decision?
Arvin Ganesan
Yeah, well, look, I think that first, the industrial heat problem is a big one, and I'm glad that there are companies doing that. I think on one podcast that you did, you gave a statistic of 25% or something like that, of emissions from that. So I want to just be very clear that that's a really important slice to get. What we are focused on is — load growth in the United States has largely been flat for the last, what, 20-30 years. That is about to change in a very, very big way. So whether you look at it from a greenhouse gas perspective, whether you look at it from a market perspective, how you service new load is going to be like the key problem that utilities, regulators, and people like us need to solve.
And without the idea of flexible — and we haven't talked about kind of how the storage duration of our product can change over time — without the ability of flexible and long duration storage we can run into a scenario where that new load growth is serviced by either additional fossil or other types of hyper-expensive generation that puts down that cost on ratepayers, which is another kind of edge case we want to work against. So largely it's focused on where's the biggest market and where's the biggest impact that we can make.
David Roberts
It just seems like it wouldn't be that much — what the hell do I know about engineering? I can't believe I almost said this — it seems intuitively like it wouldn't be that hard to add the ability to output heat.
Arvin Ganesan
So I wouldn't say it's an engineering challenge, right. I think we could probably figure out how to discharge the heat fairly easily, but it's about knowing your customer: where there are interconnections to the grid, or where there will be interconnections to the grid, these are probably not the places where there's going to be a high demand for high-quality industrial heat. So what are you focused on? And from our perspective, if you focus on where the customer need is, that's the best way to get large-scale deployment quickly.
Asegun Henry
From the engineering side, this kind of comes down to the pathway to cost minimization and standardization versus customized. One of the reasons the grid storage problem is an ideal first candidate for us to tackle — I don't want you to get the impression that we are not going to tackle the industrial heat problem as well — but we are specifically focused on dealing with electricity first so that we can standardize the product. And the value of this is if you look at, for example, the cost matrix for doing one of these projects early on when you're trying to get your first, let's say ten first projects into the ground, the engineering cost is in the double digits percentage of the whole effort.
David Roberts
It's very bespoke.
Asegun Henry
Exactly. But for electricity storage, eventually that cost will come down because the interface to the grid is standardized. You can plug up to the grid the voltages, the currents, the standards for how you interface with the grid are straightforward and standardized. If, for example, we need to put our system an extra 10 or 50ft off to the left or the right, it is not a big deal to run an electrical wire that additional distance. Moving heat, though, over those kinds of distances requires some reengineering. And for that reason, every installation that you do for industrial heat, almost by definition, has to be bespoke.
David Roberts
Interesting.
Asegun Henry
Has to be customized for that customer, has to be customized for that installation. And so the engineering cost will not go away quickly.
Arvin Ganesan
I want to make one more comment on this, largely from the demand side. So if you are a customer that's seeking renewable industrial heat, that's fantastic. And what might be driving you might not be cost, right? Right now, most of these industrial applications are serviced by natural gas, which you've invested in CapEx. It's super cheap. You're motivated by climate. That happens to be what motivates me too. But it's hard to have a large scale, scale-up strategy that's focused just on people who want to do the right thing on climate, unfortunately.
David Roberts
What?! That's not enough? How dare you, sir.
Arvin Ganesan
We're focused largely, it's hard to say, because what brings me and Ase to this is climate. But we're focused on technology, where the economics itself can rule the day. And it doesn't matter who we're talking to.
David Roberts
Okay, so Arvin, you've seen this from the regulatory side, you've seen this from the big megacorp side, and you've probably seen enough during those years to know that the landscape for startups is brutal. It's just a brutal game out there. And now you are fully in the startup game. So, I'm curious: right now, you're basically a good idea. An idea that's good enough that you've drawn some initial investment. People are investing in the idea. What's the next step to becoming a real thing?
Arvin Ganesan
I don't know what you're talking about. Startups always succeed. No, look, just to be clear, right, while this has been in the works for some time, right, it was funded out of ARPA-E in 2012 — the idea has germinated since. But you're right, you can't go out in the countryside and see these everywhere. So what are the next steps? So as you described earlier, we closed a round, led by a couple of great VCs, including DCVC and Breakthrough Energy Ventures. We're building a demonstration project about 25 miles north of Boston to demonstrate the viability of what Ase described earlier on.
We spend a lot of time talking to utilities. We know our customer really well. We know that there are really only two things that motivate utilities. The first is they need their grid to be more reliable. And what we're seeing is grids that exist right now in the country are susceptible to weather, they are susceptible to fuel shortages, and they get quite a bit of oversight from their regulators on the reliability of their grid. The second has to do with cost. We know our customers and we know what sort of cost points we need to deliver on, and we're building that into the design and procurement of the demo.
What you're going to see from us in the next couple of years is not only the demonstration, but you'll start to see pilots with utilities getting built not at full scale, but showing the viability and the ability to charge and discharge at the rates that the utility operators need to see.
David Roberts
Right. So what is pilot scale? How big will your pilot be?
Arvin Ganesan
A pilot will be, we can obviously make it whatever we want, but I'd say somewhere around ten megawatt hours.
David Roberts
And then what would a full like once this thing is fully flowered and you're building full scale — I mean, presumably these are just as we say, like Lego blocks. Like you can stack up as many as you want. So in a sense it's infinitely scalable — but what do you envision being the sort of unit size of a full scale?
Arvin Ganesan
Yeah, a one-gigawatt-hour battery.
David Roberts
That's big.
Arvin Ganesan
To put that in scale, that's kind of easily understood. That's hundreds of thousands of homes continuously for several days.
David Roberts
Yeah, yeah. And do you think you will be beating lithium-ion batteries on grid-scale storage cost right out of the gate from the beginning?
Arvin Ganesan
Yes. As described, that's a fairly straightforward question to answer, because if you look at what the cost components are to our battery, it's very knowable and it's very straightforward. We have a simple supply chain that doesn't rely on a lot of the trade issues that a lot of that industry is facing. So, we have a fairly good handle on costs there.
David Roberts
So, you need graphite and you need tin, basically.
Arvin Ganesan
That's right.
Asegun Henry
Exactly.
David Roberts
That's more or less it.
Arvin Ganesan
So, we feel confident about the cost comparison to lithium-ion and the round-trip efficiency issue that Ase talked about before it's directly related to the amount of renewables that are on the grid. And so, let me just unpack that for a quick second, the more renewables, the more variable resource is on any given grid, the longer the duration of storage that needs to exist. So, if you believe we will be in a high renewable situation simply because of the unit economics of renewables, then you need a solution that can carry quite a bit of duration longer than lithium-ion can right now.
So, you can either just stack a bunch of lithium-ion batteries on top of each other, but that becomes super expensive.
David Roberts
Right? I mean, they are also infinitely scalable, theoretically. It's just —
Arvin Ganesan
Exactly, just the cost.
David Roberts
Very expensive.
Arvin Ganesan
Yup, and that's how our go-to-market strategy is going to be different. I think one point that we didn't really talk about is that power and storage are completely decoupled. And what that means is we can build a battery right now that provides x amount of power and can store that power for 6 hours, but you can tack on storage to it without changing the power supply. So, you can build a battery now that gives you 6 hours of storage. But 15 years from now, you might need 30, 40 hours of storage to deal with weather events, and you don't have to rebuild the battery; you just add more storage.
David Roberts
Right. So, this just to clear this up for listeners. So, if you want more lithium-ion storage, your 50th unit of lithium-ion battery costs exactly as much as your first unit of lithium —
Arvin Ganesan
Exactly.
David Roberts
ion battery. Whereas adding on storage to an already built facility like this is much cheaper than the initial construction costs.
Arvin Ganesan
Exactly.
David Roberts
You're just shoving more blocks in, basically.
Arvin Ganesan
Exactly right. You can essentially double the duration for a fifth of the cost.
David Roberts
And I'm sort of curious, like, you've studied this market and thought a lot about this market, do you think when you first are launching — and I guess this will be, you're targeting your demo to be done in '26, so presumably there'll be some pilots, '27, '28, maybe. So, like when you're actually getting into this market and call it '28, '29-ish, do you anticipate the first, the early demand to be mostly relatively short term? And can you compete in that short term, like seconds, minutes, diurnal sort of day-to-day, and less? Can you compete on that with lithium-ion in terms of speed and responsiveness?
Is your battery as good as lithium-ion for that short-duration market?
Arvin Ganesan
Yeah, right. So, the time it takes to discharge energy is the time it takes to kind of stick the rods in and out of the power block, so it responds within seconds. So, the attributes in terms of response times to grid operators are essentially the same as lithium-ion. I think that from an economics perspective, if we're talking about from a one or two-hour battery, that's not really where we're targeting. We think that in these early years, we can compete at the five-hour-plus time horizon. And the average duration right now of any battery is slightly over 5 hours.
David Roberts
Yeah, I mean, this is something I discussed on the pod before. When we talk about long duration energy storage, which is that it's sort of like a chicken and egg thing. There's not yet a ton of visible demand for storage over, call it, 6 hours, or 8 hours maybe. So, you have to be able to compete in that market even as you're preparing for longer duration demand to manifest.
Arvin Ganesan
Right. So, I think what some folks are doing is trying to change the market structures to compensate for long duration attributes of the battery, and that's great. I think that what we are looking to do is essentially get into the market where the grid needs it right now, and then grow as the needs of the grid change, as renewables increase. And it's going to be such a grid-by-grid thing. Like if you're in New England, now they're starting to project two different seasonal peaks, one in August and one in February, because of heat pumps.
Right, there becomes different market opportunities to deal with not only some of the short term stuff, but can we help New England get through a February heat pump winter.
David Roberts
Right. When you say "long duration," what do we mean by that? How long? If I charged your blocks up and then just stood back, how long would it be before leakage, before they leaked till they're empty? You know, what I mean, how long is long duration?
Arvin Ganesan
So, that's a function of how we want to design it and how much insulation we want to put around the blocks. Right now, it's fair to say it can be anywhere between five and 500 hours. Which is an important number because that's where you start to get into some monthly quasi-seasonal numbers.
David Roberts
Yeah. So, if I heated it up and stood back, it would still have power, some power, in it 500 hours later.
Arvin Ganesan
Exactly.
Asegun Henry
This is, as Arvin noted, a function of how much insulation you put, but also the size. And this is also an issue that's already been proven out with concentrated solar power for a couple of decades ago. So, in the context of CSP, what they've shown, you get the heat leakage from the insulation from the hot stuff down to a percent or less per day. And if you're talking about less than a percent per day, you can easily leave it for months. So, we are in the same regime where leaving it for a month, it'll still be very hot.
We are so exceedingly hot that even in what we nominally call our discharged state, we're still hot enough to continue putting out power. So, we actually have, our full depth of discharge is also a flexible quantity, meaning we can discharge down to the nominally discharged state. And if there was some emergency on the grid and they still need power, everything is still glowing white hot at 1900 degrees Celsius, we can continue to put out power.
David Roberts
Oh, interesting.
Arvin Ganesan
Of course, one last point I'll make on this. We can essentially opportunistically take electricity from the grid. If the locational marginal price dips below a certain threshold, we can use that electricity to charge on 5-10 1-minute intervals. So, it's not like you need several hours at a time or a day at a time to charge the battery. This can kind of work in concert with an increasingly variable grid.
David Roberts
So, you're just getting bits and pieces. Yeah. I was wondering to what extent your business case relies on basically getting renewable energy that otherwise would have been curtailed, i.e., almost zero cost renewable energy.
Arvin Ganesan
So, obviously, negative prices or zero prices are ideal, but there are other ways to get that too. You could essentially generate on site. It could be paired with an onsite solar or wind that would otherwise not get built because of curtailment. You could sign PPAs to lock in the cost. It really all comes down to the unit economics and how regulators look at what sort of cost you're putting onto ratepayers and what the alternatives might look like. So, if we can come in with new renewables and new storage, provide the same attributes and come at lower cost than new fossil plus gas, we think we're going to get dispatched and built.
David Roberts
So, just to be clear, you think it would be possible, call it in 2028 or whatever, to build a wind and solar installation and one of your batteries, which would effectively act like a dispatchable power plant, for cheaper than a new natural gas power plant.
Arvin Ganesan
Plus the fuel — plus the fuel used for the natural gas plant.
David Roberts
Right, right, right. Yes. Their fuel is not a negative cost.
Arvin Ganesan
Their fuel is not a negative cost. Their fuel fluctuates and they have a high capex for a new natural gas plant. So that right there is the equation that we need to beat.
David Roberts
Another thing that comes up on Volts pods again and again is the bone-deep small c conservatism of utilities. They're super leery of new things. So I'm curious what you have found to be their disposition toward this. Is this familiar enough that they buy it or are you going to feel like you're going to have to prove this out a bunch before?
Arvin Ganesan
Yeah, I think that that small c conservatism comes from the fact that utilities are really governed by one thing, which is: are the lights on? Is electricity working? Are my rates cheap enough? And if you start there and you realize that, sure, there's technology risk that you need to prove out, and you do that by doing pilots with utilities and kind of getting them engaged very early on. If you can start to talk to them and their regulators in the language that governs them, how we can increase reliability, how we can lower overall costs and how the resource can be just as dispatchable and have utilities have just as much control over their system as they do with fossil, you're fine.
I think a lot of the small c conservatism with utilities comes with grid resources that they can't quite control, or they don't know how to control. But it's really important to start from the place that this has the exact same controllability as the gas plant that they're used to operating.
David Roberts
And it makes everything else controllable, right? I mean, that's the genius of storage, is that it makes the other plants more controllable. It makes the whole system more controllable. It really is just a control lever.
Arvin Ganesan
Exactly. And the cost of renewables are now — I think you may have covered this in a previous pod about how integrated resource plans are now starting to bake the cost of tax incentives into renewables — but utilities and regulators are seeing the cost curve of renewables.
David Roberts
And it is hard to miss.
Arvin Ganesan
Exactly, exactly. So if you start from that perspective, that it is cheaper to build a solar/wind plant than anything else for just sheer amount of energy, there's a lot of pressure put on the system to figure out how to utilize that the best. And that's where low-cost storage comes in.
David Roberts
Yeah. So you're talking about a system then that will, once you're up and running, beat lithium-ion in the current sort of four to six-hour market, and then also be adaptable to and cheap to operate in the longer storage once you're getting up to like 100 hours, because 100 hours is a bit of a significant threshold as well. So you got basically a battery here that is going to be able to compete in all the energy storage markets. Basically all the grid-scale energy storage markets.
Arvin Ganesan
Exactly. I think what we're designing this battery for is we don't want to deploy a battery based on convincing regulators for a need that doesn't exist yet. Right. We want to figure out how we can itch the itch right now and also itch the itch in 20 years.
David Roberts
Yeah, that's just the dance that all these storage companies are going through. That's just the trick. So you're pretty confident you're going to be winning on costs from the get-go. But I guess as sort of a final question, a wrap-up question, and this is ridiculously early in the game for you guys. So I'm asking a lot of questions that are in some sense theoretical. But once you are cranking out pilots, say, or even beyond pilots cranking out actual facilities, where do you see learning curves taking hold and cost reductions in your system, where do you see opportunities to push down the costs even further?
Arvin Ganesan
Yeah, I love that question. A lot of it comes from supply chains. Right. I think what we've learned over the last 10 or 15 years is relying on supply chains that come outside of the United States, subject you to a fair bit of political risk, political, technical, and trade risk. To really bring down the cost curves, you need to kind of start thinking about vertical integration. How do you control, own, manufacture the supply chains that drive the scale that we're talking about.
David Roberts
Are graphite blocks — I assume graphite blocks are easy to manufacture and are manufactured here.
Arvin Ganesan
They are. We went to a graphite production facility in West Virginia. You can manufacture graphite from coal. You can manufacture graphite from petroleum coke. You know, controlling that supply chain is really important. There is also graphite coming in from China. So, right, I think owning the manufacturing is going to be really important. Standardizing the interconnection process and how regulators and states start to bake storage into their procurements is going to be really important.
David Roberts
Yeah, a lot of that is out of your hands. It's another issue with every company in the electricity game is just like so much is determined by policy, and it's difficult to predict that stuff.
Arvin Ganesan
Absolutely.
Asegun Henry
You asked about opportunities for cost reduction. I think, as Arvin pointed out, there's controlling the supply chain. There are also new opportunities to lower costs because, for example, the graphite that we're looking to use initially is not actually tailored for our purpose. We're taking graphite that's used for other purposes, and it's great because it's cost-effective for us now, but there are actually additional opportunities to lower the cost because the requirements we have are actually lower and less stringent.
David Roberts
Oh, really? So you can actually work with less engineered graphite —
Asegun Henry
Absolutely.
David Roberts
than what's available now.
Asegun Henry
So that's one. And the second thing I was just going to tag on is, also, there's this very significant opportunity for performance improvement, particularly with the TPV. The comparison I wanted to make for reference, right. Is there is essentially a monopoly in the power industry for converting heat into electricity, and the winner is the turbine. The turbine does that for us almost ubiquitously. Turbo machinery, as a class of technologies has received hundreds of millions of dollars of investment for R&D and development from the government. Most recently, supercritical CO2, for example, has garnered $100 million of investment.
Thermal photovoltaics, by comparison, is single-digit millions of dollars. And if there is significant investment, there are really immense opportunities to drop the cost of TPV and to improve the performance. It's just never seen major investment like has been made in other technologies. And so I think the other thing that I'm hoping will happen as we move along this development curve, proving this out, demonstrating it at larger scales, will then get people excited in the government specifically to invest more money to push this along and lower the cost even further.
David Roberts
Let me ask, what is the efficiency of a turbine in converting heat to electricity?
Asegun Henry
So, the record is just over 60%, and that's actually two turbines in tandem. And generally speaking, gas plants are in the low 40s.
David Roberts
So, TPV is in the ballpark of a turbine already with very little effort.
Asegun Henry
This is precisely the significance of the paper that we published in Nature on this, and that's why we wrote that paper in that vein. The theme or the story in that paper is about the reason this is so significant to hit 40% is because this is the first time a solid-state heat engine has ever been better than a turbine — a typical steam turbine, average steam turbine efficiency in the United States is 33%.
David Roberts
Interesting. So, you could imagine TPV branching out, doing lots of other things, being used in lots of other applications.
Asegun Henry
We have amazingly grand plans to take over the world.
David Roberts
Well, that's my final question, which is you got to show your thing works first. You have to establish yourself as a business first, selling the thing, making a profit with the thing, but looking out five to ten years, what are these grand plans? What's next? After thermal storage for electricity, what would be the next thing you would pivot to, what's adjacent?
Arvin Ganesan
Ase has thoughts on this. Go for it.
Asegun Henry
Yeah, I would say the obvious one is industrial heat. And I think that the impact on electricity storage can't be understated in the sense that, in my view, it is arguably the most single most important technological problem for us to solve, to mitigate climate change. Because if you can green the grid, then that enables the electrification of transportation. Yes, it enables the electrification of industry. And if you add those three together, that's like more than 60% of the entire problem. So this, as far as I'm concerned, the reason this is getting my entire focus, why I have placed such a huge bet and am so dedicated to trying to see this through, is because this is the big impact.
And there are other channels, other things that we can do specifically with this graphite and liquid metal infrastructure, that we can solve all kinds of problems that you couldn't solve before.
Arvin Ganesan
Just to kind of add on to that, when you think about where the rest of the world is, right. The consumption of an American is just so different than the average human experience, especially when it comes to electricity. When I think about the price points and the scale and how we get to market, we have the dual ability to not only bring electrification and electricity to a lot of parts of the country, the world, where electricity is really cheap and unreliable, but we can do that in a way that skips a bunch of fairly dirty steps.
So, I think of the impact to the world and the impact to humanity in the world of cheap, clean electricity.
David Roberts
Yes. Well, you are in the right place to be preaching that gospel. Well, this is fascinating, you guys, and I'm so geeked out by what you're doing. I really look forward to seeing how this shapes up, and maybe we can check back in, in a couple of years and see where you guys are.
Arvin Ganesan
Thank you. We're really glad to be on. Appreciate your time.
Asegun Henry
Likewise. Yeah, we would love that. Thanks.
David Roberts
Thank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf. So that I can continue doing this work. Thank you so much and I'll see you next time.
Another hot rocks company gets in the storage game