Transcription

• Speaker #0

  Welcome to the SOSV Climate Tech Summit podcast series. I am the AI voice of Ben Joff, a partner at SOSV and co-curator of the Climate Tech Summit. In this episode, Andrew Ponek, co-founder and CEO of Antora Energy, discusses with Casey Crownhart, climate reporter at MIT Technology Review, the challenges and innovations in industrial heating. Antora Energy is electrifying heavy industry with thermal energy storage and raised over $200 million in funding. Ponek explains that industrial heat accounts for a significant portion of global emissions, primarily from fossil fuels. Antora Energy initially explored various energy storage solutions before developing thermal batteries, leveraging cheap and abundant renewable energy sources. These batteries efficiently store and provide heat, aiming to replace fossil fuel dependency in industries. The conversation also covers the economic and safety aspects of thermal batteries, their integration into industrial applications, and the potential expansion into high-temperature processes like cement and steel production.

• Speaker #1

  Today I am excited to be speaking with Andrew Ponick, co-founder and CEO of Antora Energy. Thank you so much again for being here, and I want to get into all the details of your tech, thermal batteries, your founding story, but first I wonder if you could sort of kick us off by giving us a sense of sort of scope and stakes. So why is industry, and specifically heat in industry, a challenge for decarbonization and something that, you know, you guys wanted to address?

• Speaker #2

  Perfect. Well, anyway, great to be here. Great to be speaking with you. I'm glad you brought that up first, because that's actually where ANTORA started first. We really came at the problem of how do we make the biggest impact on climate change? And industry was one of the biggest targets. And the reason for that is it's the globally the single biggest emitter. So about 30 percent of global emissions come from industry. So a huge sector of emissions and about two thirds of the emissions in industry come from heat rather than come from electricity. So industry is huge in general and heat within industry is very, very large. You know, we came at it from how do we make the biggest impact? We found industry being a really interesting place to go. We did not start with thermal batteries as a technology. We looked at a bunch of different ways that we could store energy because we had a very strong hypothesis about renewables continuing to get cheaper. And so we had a great source of energy. We just needed a way to tie that in with industry. So that's sort of the high level stakes for and why we're doing what we're doing.

• Speaker #1

  Yeah, I feel like I just want to underline that point because it's just so mind blowing to me that 20% of it. emissions or 20% of energy use. I forget which one. Heat in industry. Like that's just, that's it. It's just kind of wild. Yeah. So tell me a little bit more about, and you kind of alluded to this, you know, maybe changing market with electricity, with renewables. But why has heat been kind of tough to decarbonize? I mean, it's really fossil fuel intensive today, but just tell me a little bit more about that.

• Speaker #2

  Yeah, there's really a couple reasons why this is, it has been such a hard problem to tackle. And I'll tell you one reason why it's actually. That's not a reason, but that a lot of people think is a reason. So the thing that a lot of people think is a reason, but it's actually not a reason, is that there's some challenge to take renewable electricity or any form of electricity and turn it into industrial heat. It's quite easy to use electricity to heat up some sort of heater, like a toaster coil, essentially, and generate very high temperatures. In fact, all of the highest temperature industrial processes like steelmaking and electric arc furnaces and the production process of graphite, those are all high temperature processes. that are driven electrically because you can't get to those high temperatures easily by burning things. So the reason why we haven't been electrifying industry is not because it's hard to turn electricity into high temperature heat or any temperature heat. The problem is entirely economics. So electricity today, if you want a standard, you know, baseload electricity contract from your utility, that's typically going to be many times higher than the cost that you would pay for the raw energy content of coal or natural gas typically. you know, five times higher. So there's no technical problem, but nobody's going to switch over to paying five times as much for their energy for a gigawatt scale industrial facility. So the challenge is, how do you electrify industry in a cost-effective way? And this is where the advent of solar and wind has totally changed the economics for industry. And forgive me, a lot of people in the climate industry have heard a million times about how solar gets But I have to emphasize, because I think it's still... people don't always know exactly how cheap it has gotten, especially in places with good resources. And, you know, we've heard a lot about wind and solar electricity going onto the grid and undercutting the cost of coal or natural gas electricity. And so that's actually a breakpoint that has been, that was hit many years ago, where the electricity from wind and solar was cheaper than the electricity from coal and natural gas fired power plants. But we've done something in a lot of places around the world now that's even more fundamental, which is the electricity from solar and wind at certain times, and we can talk about what those times are, but the electricity from solar and wind are cheaper than the raw energy content of the lumps of coal going into a coal-fired power plant. So again, not comparing to the electricity coming out of the plant, but the coal going in. That is just mind-bogglingly cheap. That means solar and wind, again, under these certain conditions we'll talk about. are the cheapest source of primary energy that we've ever had as a society. So this incredible opportunity, something that was not true five or 10 years ago, and something that we wanted to harness. And the big but, though, with all of that, as I said, was some of the time. So when is it that solar and wind are so insanely cheap that they're beating fossil fuels on raw costs? And the answer is it's happening in certain places around the world, certain geographies like the US Midwest, where there's a lot of wind, and then it's happening only at times when there's low electricity demand. So if you're in Iowa, and it's windy and it's night, you have some of the cheapest energy of any sort in the world, cheaper than Henry hub natural gas in the US which is considered one of the cheapest source of energy today. But you can only make use of that 20 or 30% of the time when the wind is really howling and there's not a lot of demand. Industry runs 24-7. Almost all large industrial processes can't start and stop with renewables availability. So that is the fundamental tension of you have this new source of primary energy that's cheaper than what they're using, and it's clean. So it's everything that you want, except that it's available 20% of the time or 30% of the time instead of 100% of the time. That's what Antora has founded.

• Speaker #1

  So you have in fact heard of this thing that people comment on my Twitter social media all the time that the sun doesn't always shine and the wind doesn't always blow. Amazing.

• Speaker #2

  Yes.

• Speaker #1

  So you mentioned that, you know, you kind of came out this as sort of from the problem standpoint of knowing that, you know, this kind of industrial energy, industrial heat was something you guys wanted to tackle and kind of eventually came to the solution of thermal batteries. Tell me more about what in the world a thermal battery is and kind of why this won out as something that you guys decided to build a company around.

• Speaker #2

  Yeah, absolutely. And, you know, I think this is a really important part of our story because, you know, I don't have it. My background came from the utility scale solar industry before this. I don't have I'm not a I'm not a thermal battery guy who's just been doing. this my whole life. It really came from looking at all of the different options and choosing that this was the one that had the most potential. So we looked at flow batteries, lithium ion batteries, hydrogen, compressed air, any sort of way you can imagine to store energy to solve this mismatch between intermittent renewables that are now cheap and industrial uses that need 24-7 energy. And thermal really was the most promising of all of them. And it came from a few different areas. One was that the raw materials are super cheap. abundant. There's basically no supply chain constraints. That was not true necessarily of all of the other solutions, and it was really important to us. A second thing was the energy density is quite high. You're actually storing more energy in our thermal battery than you would in an equivalent amount of lithium-ion batteries. Just like per volume or per mass, you're storing more energy, whereas most of the other approaches to storing energy for industry were way worse than lithium-ion batteries. So it's a very, very compact... which also helps for, you know, it be lower cost. So cheap raw materials that have no supply chain constraints, you know, very compact system, which reduces the cost of sort of the balance of plant, everything that's around the thermal battery. And then the final thing was... the fact that heat is two-thirds of the energy used industrially. So you can imagine it sort of makes sense intuitively to store the energy as heat they're using for industry if that's the form of energy that they are using most compared to anything else. And so those three things together made this one really stand out from the rest as the most promising option.

• Speaker #1

  So I think people, I mean, it's hard enough to kind of wrap your head around, but a battery is and how it works. But I think people kind of get, you know, storing electricity, chemical reactions, electricity comes out. But kind of give us the high level of like the systems that you're building, how they work as far as what's coming in, what is happening, and then what's coming out.

• Speaker #2

  Yep, absolutely. So, you know, a thermal battery is just, you know, you can say broadly is something that is storing energy in the form of heat inside of it. But exactly how do you tie that into an industrial facility. So for us, our thermal battery is charged with electricity. So similar to, you know, a lithium ion battery or another battery. So you take solar and wind, you know, when it's available when it's you know windy at night or when it's the middle of the day in California, and there's too much of it. You use it to heat up. our thermal battery. And our thermal battery, you can think of it as just a steel box with insulation, and then inside of that, carbon blocks. And we can talk about why we use carbon blocks, but we found that to be the best thermal storage medium, whatever's storing that heat. So, electricity comes in, you heat it up when it's available. Now, it stores a huge amount of energy in this thermal mass. So basically, it takes a long time for it to cool back down. And when we want energy out of the system, We basically open some doors in the insulation on the edge of this unit, and the carbon inside is so hot that it's glowing. And that glow then can shine out of these doors onto whatever you want to get hot. And that could be heating a fluid like steam. It could be heating a material if you wanted to do something in cement. Or, and we can get to this a little bit later, you can actually shine that light, that concentrated light onto photovoltaic cells and convert that stored heat back to electricity for the portion of your energy use that's in that area. But the primary focus for our first product is really about taking electricity into the thermal battery and then 24-7 heat out of the thermal battery.

• Speaker #1

  Great. Thank you for that. Yeah, I do. Sorry, I love this kind of the technical stuff. So we'll dig into a little bit of it. But I also know that people probably want to hear a lot more about, you know, kind of your founding journey and the company. But indulge me for one more minute. Yes, please tell me about the carbon because I know that this is kind of a hot topic amongst the thermal energy kind of world is like, what are you using to store this heat? Like you said, it should probably be something that's abundant and cheap, but you know, there's a lot of different kind of those materials. So talk to me about carbon.

• Speaker #2

  Perfect. So, and I'm happy to talk about carbon. You're going to have to cut me off. So, you know, we went through a bunch of different materials for what we were going to store energy in. We looked at, you know, sand and rocks and bricks and salt and all sorts of things that you can imagine. And carbon was really attractive for a number of reasons. But the first, and this is, I think, is surprising to most people, it was surprising to me, carbon is the fourth most produced man-made material on Earth. So like humanity produces the most cement, and then it goes iron slash steel, aluminum, and then carbon blocks. So we make massive, massive quantities of carbon blocks. Now you think like, what are we using all this carbon block for? I haven't seen a carbon block, you know. And the reason that we make so much of it, but that you've never seen them, is they're used in the process of making metals like aluminum and steel. So electric arc furnaces use carbon blocks as electrodes to heat up the steel, to melt the steel. And the aluminum industry uses them in the electrolysis process to conduct heat and separate the aluminum from the oxygen to create the metallic aluminum that we use for all this stuff in our daily lives. So because they're used as intermediate products in that, we make tens of millions of metric tons of this stuff. And that's why it's so abundant. It's so cheap for us to use as a storage material. A few of the other things, though, carbon is insanely temperature resistant. Actually, the reason they use it in electric arc furnaces is because there's nothing else that can survive these crazy hellish conditions. You can imagine electric arc furnace is basically a giant pot where you put scrap steel in it. And then you put these electrodes. that are made of carbon into it. And then you basically shoot lightning out the ends of those carbon tips to melt all of the steel. So you have this insanely corrosive, hot, nasty atmosphere where these carbon electrodes are being heated to over 2000 degrees Celsius. So there's no other material that could work besides carbon for that. So anyway, we really love carbon. It's very temperature stable, which means we can use it to store energy for high temperature processes. It's very energy dense and it's made in in giant volumes today. So we don't have to scale up that production process.

• Speaker #1

  Yeah, that's really interesting. I always find it so fascinating where startups are able to kind of like use what's already out there, like whether there's a supply chain or something that already exists, like carbon blocks. I want to remind our audience that we would love to hear the questions that you have for Andrew. I have plenty more to keep us going, but please get those into the Q&A. I'll try to get to as many of them as I can. But I will pause us both on the nerding out on the technical specifics. And Andrew, I wonder if you could tell us more about kind of Scaling and deployment. Where are you at as far as like kind of bringing this into the world? What's kind of the current frontier for NTORA Energy?

• Speaker #2

  Yeah, it's been a really interesting last year and the next year is going to be, you know, totally crazy in a good way. So last year was really the year of testing a full scale unit in the field. So these are modular thermal batteries. A lot of thermal batteries are made kind of the way like a nuclear plant is constructed, like one piece at a time, you know, people welding, people like putting stuff inside. What we do is we make them in a factory. we we bring the steel box in we put carbon inside we put insulation inside and then we put it on the back of the truck ship it to the customer side so just to give a sense of what that process looks like so we made the first of these modular thermal batteries so it's a little bit bigger than a half shipping container you can think um we we built it we shipped it to an industrial site in california we set it down on a concrete pad we turned it on it's now been operating for uh almost a year um and that's been uh fantastic great data it's working exactly like we had hoped. So now we feel comfortable going to the next step. And that step is manufacturing. So this is really the year of manufacturing for Antora. We leased in the second half of last year manufacturing facility in San Jose, California. And right now we are building out the facility and ramping up production to build lots and lots of these thermal batteries for customers. So this is your manufacturing. Last year was like year of demonstration. This year manufacturing. Next year is really... early the year installation. So we'll be starting construction on our first couple of projects this year, but those projects won't go online until next year. And those are projects that use 100 plus of these thermodynamics. So really, really large scale installations. We haven't shared yet who those customers are, but think a big industrial site in the Midwest that uses a lot of coal or natural gas today for their heat. So. That's a little bit about what comes next for us.

• Speaker #1

  Awesome. Thank you. Can you drill in a little bit because I think when people say like industrial centers, industry, it's sort of this cloudy term. Can you give us maybe some examples of either where that demonstration system installed or kind of potential industries that you guys are kind of thinking about? Like what kind of things that could I like touch around my apartment that might help that might enter might help make?

• Speaker #2

  yeah great question i that's something i've loved about this journey is just learning so much about the industrial fabric because like had i ever toured most of these sorts of industrial places never i i would have loved to i was always you know a kid who loved to watch like how stuff's made and see like videos of factories and stuff like that like never really stepped foot into a factory until until doing uh well maybe a little bit my last company but then certainly this company um so uh just to give a sense there are lots of different types of processes, everything from steel and cement to chemicals, food and beverage, etc. But there's one really big divide that's important for us. So some of those are really high temperature processes, stuff like cement. There's between 1,000 and 1,500 C. And then most, or about half of all of the heat used industrially, actually more than half of the United States, is used in the form of low temperature heat, usually steam. So there are tons and tons of different places that use steam as part of their process. So that could be, you know, working in paper and pulp, that could be working in food and beverage, that could be agricultural process, that could be chemicals, you know, making, you know, all of the everything from plastics to pharmaceuticals, etc. So there's a huge amount of steam used. And we chose steam as the first market to go after, because steam is really easy to integrate with the customer, you can imagine that if you have a giant a cement kiln figuring out how to switch that over to you know a new source of heat is really challenging they're highly integrated processes at very high temperatures um they're uh anyway so it becomes challenge whereas steam it's like hey they have a steam pipe they have a natural gas boiler that's putting steam into that pipe you bring your own pipe and say hey i'll give you the steam instead super easy integration we wanted to make it as seamless as possible for these early customers so we're focused on steam and in those types of applications we talked about we're you know, we're mostly in the Midwest. So that's an area that has a lot of wind. We're certainly working with customers outside of that as well. But it's something that, you know, there's been a lot of talk recently, which is wonderful about, you know, California on certain days hitting 100% renewables. And that's true. But if you look at over the course of a year, the states that have the highest percentage of renewables in the United States are places like Iowa. where they have so much wind. There's actually more renewables in Iowa than there are renewables in California because of how prevalent wind is out there. So that's why we basically go wherever there's the most renewables because wherever there are the most renewables, that's typically where you have the low value renewables, basically renewables that nobody knows what to do with at certain times. And that's what our system is really uniquely able to capture.

• Speaker #1

  Interesting. Cool. Yeah, I hadn't thought too much about, yeah, seasonally, how different that winds up being and obviously important for industries that want to operate year round. Yes. So you guys recently raised some funding, and I know that's something that is probably top of mind for some listeners. So tell me about the funding journey, this recent round, what's it been like kind of raising for this? And what's that looked like?

• Speaker #2

  Yeah, we had a really positive experience raising this round. This was our series B round, just to give a little background. $150 million round led by Decarbonization Partners, which is a BlackRock and Tomasic joint venture. For those who are less in the financial space, BlackRock, for instance, is the world's largest money manager with something like $10 trillion under management. So these are like huge, huge, huge financial players. And what we saw during that process. We heard a lot of doom and gloom and you see a lot of articles about how bad the fundraising environment was. But our take on this is we still found that these big players, they are deploying capital. They are looking for great companies. But I think what's changed is they're really focused on companies that have real customers and that have a real chance to beat fossil fuels on cost in the relatively near term. And so that's something that I think we had an advantage in that fundraising process because we could show them customers and say, this is exactly who's buying it and why. And then we were able to show a very short term path to even if there were no subsidies, no IRA, no green premium, no nothing like that, hey, we can just beat the cost of natural gas. And it really comes from the fact that wind and solar, coming back to it, are so cheap at some of the time that we can beat fossil fuels directly on price. So We raised that round. We had great participation also from our some of our existing investors. So you know, breakthrough energy ventures, trust ventures, lower carbon capital, NextEra, which is, you know, the country's largest renewables developer. So they build tons of wind and solar plants. You can imagine why that's such a unique and valuable partnership for both sides there. So we had a good fundraising experience. We raised that right at the start of the year. And that was really to build out our manufacturing and get ready for those big systems to turn on next year.

• Speaker #1

  Year of installation. Coming up. All right, we've got some great audience questions I want to start digging into. So let's start out with one asking about using waste heat instead. I know that's kind of another segment maybe of the thermal energy storage market. So can you just talk about kind of your, you know, using electricity versus using waste heat, how that might be different if you ever thought about doing waste heat, if you can?

• Speaker #2

  Yeah, yeah, it's a great question. So there is a lot of waste heat industrially. Most of that waste heat, and the reason why it's often waste, is because it's at very low temperatures. We're talking about 100 degrees Celsius, sometimes less than that. It's very challenging to do much with that. You can imagine if you have a process that requires 300 degrees C heat, and then some other part of your process is making 100 C heat that you're then throwing away, finding a way to put that 100 C heat back into a 300 C process. is not thermodynamically favorable. The heat doesn't flow uphill like that. And so you'd need some sort of heat pump to upgrade that heat again. Similarly, if you put that heat into a thermal battery, a thermal battery doesn't upgrade the heat. So whatever temperature you put in, you're going to get something strictly less than that on the way out. And so we haven't focused on taking in waste heat. There are some great companies that are doing stuff like making heat pumps to sort of upgrade that waste heat to make it more useful. There are companies that are making heat pumps actually that aren't even using waste heat at all that are just taking atmospheric heat and then putting it into these processes. We're huge fans of all that stuff, but we saw really the bulk of the problem was how do you cover the vast majority of the energy use, which is at these higher temperatures, and then take advantage of the cheap wind and solar that we see as the only ways to scale up and drive that.

• Speaker #1

  Great. Thank you. We have another one about cost. So you mentioned at the top that just kind of on an energy basis, buying electricity from the grid or the utility will be much more expensive than just, you know, combusting some coal or natural gas. So this question is about kind of the price of electricity where you can get to parity or just kind of more generally, how do you close that gap between fossil fuels still being pretty cheap and kind of the solution trying to compete on price?

• Speaker #2

  Yes, this is the core, I would say, of our business and really any thermal battery that's looking to turn cheap renewables into industrial heat is you have to find a way to get that energy more directly from the wind and solar. And so let's just talk a few numbers. You might be paying five times as much for the electricity than you would for heat if you're just going to the grid and saying, hey, like. I'm going to run baseload or basically you need to deliver me energy whenever I want to use it. And then I can use it as much as I want. So utility, that's like a standard utility contract. If you go to them and you say, hey, I want to put it into a thermal battery, but I'm still going to use it kind of whenever I want, they're going to say, yeah, you sound like every other customer that wants to buy electricity, you can get the standard electricity rate. But it becomes a little different if you start saying, hey, you know, I know that electricity for you, the utility, sometimes is expensive and sometimes is. cheap. Sometimes your network is clogged and you have trouble moving the electricity around. Sometimes there's plenty of spare capacity on your grid. What if we worked out a deal where you can choose when you want to give me the electricity, or I can promise to only take electricity at times when the wholesale price, the price that the utility is paying is really, really low and there's no grid congestion. So then they start saying, oh, well, you're not like a standard electricity customer. I don't have to be thinking about, do I need to upgrade this line Because I don't know when this person's using electricity, you know, they can have a big red button that turns us off and says, hey, I'm having trouble right now with my grid. I don't want you to be a load on it. I'm just going to disconnect you. We're a battery. We're totally fine. We'll just keep delivering heat to our customers. So once you get into that mindset with the utilities, you can get different types of deals than you'd get as a standard industrial customer. The other way of doing that, though, is also to build new renewables on site or nearby or directly connect. to a wind plant. And so this is what we're working on with NextGera. You can imagine, you know, if you build a giant wind farm and you connect directly to an industrial facility, you're not even touching the grid in the first place. And you're able to get that very low cost electricity directly to the facility.

• Speaker #1

  Yeah, really interesting. I think especially that sort of doing renewables on site potentially gets around some of the grid problems, maybe, I think. So really interesting. We have another listener question about how this tech kind of compares to maybe chemical-based batteries, maybe talking about these low-cost, maybe grid or industrial storage solutions like from Form Energy, who I think had a speaker talking about them yesterday. So yeah, how does this stack up to these electricity storage batteries? And can you talk more, because you mentioned, and I want to dig more into that, that you can also be delivering electricity? part of customer needs.

• Speaker #2

  Perfect. Yeah. And I'll start out by saying there are so many great companies in that space. Form is one of them. My former manager from SunPower is there. I've got a lot of friends at Form, and they've been an inspiration to us in a lot of ways. That said, they're going after a very different type of market. And let's talk first about industrial heat, and then we can talk about what we do in electricity as well. But if you're looking at the industrial heat use case, Form isn't going after it at all because they know it doesn't make sense. battery was designed for something else but just to talk about what that that looks like they have a relatively cheap uh battery uh that they hopefully will be deploying soon um but it has a very low round trip efficiency so their round trip efficiency is 50 or less whereas a thermal battery like ampuras is over 90 round trip efficiency in this thermal use case so a a form battery or or one of the other long duration storage batteries like that plus an electric resistance heating element is a way lower efficiency and probably higher cost, honestly, solution than what Antora or a lot of Antora's competitors are doing for industry. So it's really designed for that.

• Speaker #0

  We have a technology that I mentioned for longer term that can also turn some of that stored heat back into electricity, which is basically a specialized solar cell that looks at the glow off the hot carbon and converts that into electricity. So super simple, super scalable way to take some of that stored heat and turn it into electricity. So theoretically, we could go and turn our battery into what looks like a form battery. It would have a similar efficiency, a similar cost. And we could try to use it for grid storage applications as opposed to industrial applications. We found, though, that that market is pretty slow moving. It's hard to deal with utilities. There are other people in that space like Form that are doing great work. So we don't feel like that's the most pressing problem for us to solve. But there is a really interesting thing you can do from the fact that it's a thermal battery already, which is you can provide heat and power out of the same battery. So most industrial customers use both. It's rare to find somebody who only uses heat or only uses electricity in their process. And so we can have one battery that's charged from wind and solar, and then some of the time outputs some electricity to the plant, and then also provides a baseload steam or other heat to the plant. The economics of having one battery that can do both of those are far better, as you might imagine, than having a battery that's only heat or only electricity. like a form or other batteries. So for the industrial application, where you have those things co-located, it's really, really powerful to do both. But we're not focused on direct competition with the forms of the world because they're really designed for a different application.

• Speaker #1

  Yeah. And then this, Asghar had also kind of just specifically asked about efficiency. So I want to pull on that thread a little bit more. You mentioned that going from electricity to heat, you can get about, I think you said 90% of that energy back out. And then when you're going electricity to heat to electricity, it's maybe in the range of 50%. Is that fair? Is that what you kind of are quoting?

• Speaker #0

  Yeah. So yeah, heat, electricity to heat 90 plus percent efficiency. If you had a, one of our, our future products, which is heat and power, but didn't do any of the heat. So, but you just like forgot about the heat for a second, then you would be below 50%. So we've demonstrated right now, 40% conversion efficiency from that stored heat to electricity. We expect that to go up in the future as we continue to develop that product. But it's a, it's a low efficiency. but you really, again, aren't using it as a standalone thing. You'd be using it in concert with the heat where your blended efficiency is much higher.

• Speaker #1

  Totally. No, and that's kind of in the ballpark of how we currently convert heat to electricity, right? Not like, yeah, that's just the harder direction to go in.

• Speaker #0

  It sure is.

• Speaker #1

  We have a question around, um... kind of charging and discharging. So, you know, how do you see your batteries being used and how can they be used? So how long can it be discharged before it needs to be charged up? Like, are there technical limitations or just, you know, how are you planning for people to use this?

• Speaker #0

  Yeah. So speaking of the, you know, just heat application, what the first product is, we're discharging all of the time, which is a little bit of a weird thing to think about, because I mean, some of the time we are charging and discharging simultaneously. So some of the time we're charging, some of the time we're not charging, but all of the time we're delivering heat, because again, the industrial facility is usually demanding a 24-7 supply of heat. So when we think about how long we can run before we have to charge again. Let's imagine that you happen to be fully charged. You've been delivering heat and you expect to continue delivering baseload heat. If you don't charge again at all, after about two days, that's when your battery can no longer, your thermal battery can no longer continue outputting its full rated power. And so sometime before two days have gone up, you need to start charging the battery again. We really designed that based on the dynamics of power pricing and renewables availability in the U.S. Midwest, where there's a lot of wind. There's an economic optimization you can imagine needing to do where increasing the duration of the battery costs more money, but also allows you to get access to the absolute cheapest power because you can be more choosy, more picky about when you're charging. but that was where we kind of found the optimum. The other thing that's really important though for that is how fast you charge. That's something we haven't talked about yet, but it's a huge advantage that some types of thermal batteries have over other types of long duration storage, like a form system, is that we can charge very, very rapidly. So charge three times as fast as we discharge in our current product. We have found no problems charging up to six times. And we think maybe even 10 times as fast as we discharge is totally possible for our system. So that allows us to really be selective about only charging when electricity prices are really low, which again happens to coincide with when emissions are very low because you're taking directly the wind from a wind farm or solar from a solar farm. So if you don't have that fast charging availability, you end up having to charge a lot more of the time, which just increases your cost substantially.

• Speaker #1

  I've never thought about fast charging thermal batteries. Fascinating. We have a question around lifetime. Tell me about, is there any sort of limitation on this? Are you going to need to replace carbon blocks? Like, is there any degradation? What's the expected lifetime of these systems?

• Speaker #0

  Yeah, so there's no degradation mechanism for the carbon blocks. It's a physical storage. There's no chemistry going on. So there's no capacity fade. These carbon blocks are pretty bulletproof. I would be surprised if, you know, after 50 years, these carbon blocks didn't look pretty much exactly the same as they do today and work exactly like they do today. When we think about system life, though, you know, it's really easy. And a lot of people do this. They just say, hey, because our storage. material has basically infinite life. Our system has infinite life. Of course, not quite right, because you can imagine, you know, there's all sorts of other, like, what about the electronics control boxes on the system? What about this sort of, you know, valve or, you know, pipe or electrical transformer or anything like that? So we expect the core storage unit to last many, many decades. But when we talk about a system life, we don't, we don't go so crazy as to say, oh, it's a hundred year, you know, system life. But again, you know, with no capacity paid, we expect 20, 30 years of like normal plant life, but that could very easily be extended by, you know, replacing some of the peripheral parts around the core thermal battery.

• Speaker #1

  Yeah. Which is, I mean, pretty common in industry to be upgrading or kind of fixing up your systems as you go. tell me about safety. We had a question about if there's thermal runaway risk. You know, we've seen obviously some unfortunate fires with some lithium ion installations on the grid. Tell me about, you know, any potential safety issues that you guys have had to manage or just if people should be concerned about anything like that.

• Speaker #0

  Yeah, this is a very safe way to store energy. Again, like a lithium ion battery has chemical potential energy inside of it that can be released quickly. That's what makes them, in certain cases, dangerous. I don't want to fear monger about lithium ion batteries. I think these are all solvable problems. But, you know, definitely, you know, if I had a choice of which battery to stand next to, I'd prefer to be next to a thermal battery just because there aren't that many things that could go wrong with it. And when things, let's imagine, you know, I don't know, a plane or car crashes into one of these and, you know, rips it wide open. What you basically get is just a block that's glowing. So it would be kind of like, you know, feeling the heat of a campfire or something like that. So it's a very detectable failure mode. It's a very kind of benign failure mode. If you just move away, you know, there's no chemical releases, there's no explosion potential, et cetera. Maybe the most interesting thing though about graphite, and we have to come back to graphite because I love it so much, is that it's not flammable. They actually use graphite in a lot of fireproofing applications because it's so temperature stable. And this is probably, it seems a little counterintuitive because you'd imagine, you know, hey, like, you know, other, you know, things that have carbon in them are flammable, but graphite itself is the carbon so tightly bonded that it essentially cannot burn. And this is why, as I mentioned earlier, they use it in electric arc furnaces. They use it where it's at 2000 degrees Celsius in air and it's not burning. And so the property of the carbon, this inherent property of the carbon, also makes it a very safe material to use within the battery.

• Speaker #1

  Do you have to keep it under any special atmosphere? Like, do you have any, is it inert or do you keep it in air?

• Speaker #0

  That's right. We keep it under an inert atmosphere, nitrogen atmosphere to prevent any sort of corrosion. So just like if you heat up steel to, you know, over a thousand C, it will slowly oxidize. The same happens to graphite. And so that protects the lifetime of the system. But it's a very, very simple system. You can just imagine if you have a steel box and you just put a little bit of nitrogen into it. So it has a slight positive pressure. Then the air doesn't come in.

• Speaker #1

  Yeah. Cool. Interesting. I want to hear more about sort of working with and trying to integrate into industrial centers. You know, you kind of mentioned maybe trying to go after steam because that's something where you can kind of be more of a drop in to kind of maybe a boiler system. But I wonder if you could talk a little bit more about that. I think specifically, I wonder, because a lot of people always ask about the extremes, like, okay, when can you do cement? When can you do steel? Like, when can you do these like 1200 plus degree C applications? So tell me a little bit about kind of maybe deciding to go after steam. If you are, are you interested? Will we see Antora cement eventually? These like really high temperature, crazy kind of systems.

• Speaker #0

  I certainly hope so. It's really interesting. In the United States, most of it is this lower temperature heat, but when maybe even 75% of it is relatively low temperature heat. But if you go globally, because there's a lot more of stuff like cement and steel outside the US than there is inside relative to the size of their industries, you get an even larger portion. So it's definitely, it's not the majority. but it's a huge chunk of emissions that absolutely has to be addressed. And, you know, this is an area that Antora has a pretty big advantage over other types of thermal energy storage because we're able to store that heat at super high temperatures. So a lot of these high temperature processes, for example, driving the CO2 out of limestone to make cement, that happened, that's an endothermic chemical reaction. So it requires heat. to drive it. And it happens at temperatures of a thousand C or higher. And so in order to do that, that means you have to be providing a thousand C heat continuously into that. heat only flows downhill unless you have something like a heat pump to try to make it go up. And that's really challenging at these temperatures, which means that a thousand C then, let's say, would set the floor of what temperature your thermal battery can be. So if your thermal batteries at a thousand C, it's fully discharged. There's no way to use that energy to drive the cement process anymore. But that means that in order to have any usable amount of energy stored. you can't store at a thousand C or even at 12 or 1300 C because you just have not really much energy stored in your system to deliver into the thousand C process. You really need to be storing at 2000 C or higher. So you actually have a chunk of energy that you can put into that process. So that's one of the kind of common misconceptions we see about thermal energy storage is you just need to have the thermal energy storage survive at the temperature of the industrial process. No, it has to be able to survive way a higher temperature. than the industrial process. And so that's something that we think Antoran, there are a few other companies that are using graphite. There's a few other companies like Redox Blocks that are doing interesting thermochemical storage that can deliver those temperatures. But most of this sort of classic thermal energy storage with salts or bricks, those can't get to those really high temperatures. And so they can't effectively drive something like a cement process. So we absolutely want to do that. We will be doing it soon, but we didn't decide to do it as our first market for the reasons I mentioned. It's just a lot more complex and integration process with the customer. And that would slow us down as opposed to going with steam first, which we can just get to scale very, very rapidly.

• Speaker #1

  Yeah. Well, like you said, it sounds like there's plenty big enough market to start there and see where things go. I wonder, has it been a challenge at all to work with these sorts of customers? I just, I've reported a bit on kind of the steel and cement industries in particular, but I'd imagine it kind of carries for other industries as well that, you know, these are many of them very old businesses. Many of them have very established players. I've heard, you know, some startups say it can be a challenge to work with these kinds of customers. You really have to prove that you have something that is going to work. Have you run into any of those challenges? What's it been kind of trying to engage with industrial customers?

• Speaker #0

  Yeah, I mean, there's certainly a mix. But one of the things that I think we've seen over and over again is it comes to economics. When people talk about how hard it is to break into these industrial players, they're usually coming with a solution that fundamentally has a higher cost structure. So, you know, for an example, like there's a lot of people that have been talking about using hydrogen for industrial heat. As a chemical, it's used in massive quantities today. It needs to be decarbonized. But hydrogen makes absolutely no sense for industrial heat because it's way too expensive. I mean, currently it's probably 50 times as expensive as natural gas. So just like mind-bogglingly expensive, kind of best case future scenarios, you might be looking at five times the cost of natural gas or maybe 10 times the cost of natural gas. So complete non-starter. So you can imagine if you're coming and saying, you need to decarbonize, you need to decarbonize, you need to go green, and I'm selling you something that costs five times as much as your current solution. people are going to be very resistant to that. If you come to them instead and say, hey, because of how cheap wind and solar have gotten, and because we have high temperature capabilities in our storage, we can provide something that is competitive with natural gas or coal. Suddenly, people are all ears. And so I really think it depends on, can you make a effective, reasonable case to beat fossil fuels on cost or not? And that really determines how much uptake you're going to get from these customers.

• Speaker #1

  Yeah, that's interesting. tell me about policy here. Is that something that, you know, you guys need, what's has the IRA impacted at all, what you guys have been doing. That's the inflation reduction act, lots and lots of money for climate technology in a nutshell. But yeah, just talk to me about the role of policy. If you guys have, have kind of steered your ship accordingly.

• Speaker #0

  Yeah, so we we've really always been focused on how do we how are we competitive versus fossil fuels with no policy support at all. We think that's really important because you're spending our personal time in our lives on something that is dependent on policy. And then if that policy goes away and, you know, it ends up not meaning anything like that would be crushing to us. So that's been sort of our North Star as a company. That said, we certainly. I think that what has happened with the Inflation Reduction Act has been incredible. I mean, it's supported wind and solar. It supports our industrial customers. It sometimes gives them an incentive to decarbonize quicker. And there are certain provisions that apply to manufactured thermal batteries like the one that we make. And so it has absolutely accelerated our process. We've expanded manufacturing capacity faster today just in our current facility in the Bay Area. and we're actually looking at a much larger facility and bringing in the timelines for that because of the support from the Inflation Reduction Act. So absolutely, it's been an accelerant, but we, you know, from the start have been very focused on making a business that doesn't rely on it for survival or for the ability to get to the scale that we want to get eventually.

• Speaker #1

  Yeah, it's so interesting to me. I remember when the, that the, it's the production tax credit for energy storage, right, that you guys are qualifying for as thermal energy storage producers. So interesting. Just something that I don't know, I never would have imagined a couple years ago when that first, because the Inflation Reduction Act was passed a couple of years ago. And I feel like thermal energy storage, obviously, you guys and others have been around for longer than that. But it really feels like this has become a hot, hot topic, sorry. In the last couple of years, could you just talk about kind of that? Are thermal batteries trendy? If so, like what, what is behind that?

• Speaker #0

  Ah, man, I never thought I would say it, but I think that may be true. I think thermobattery is having a moment. It's, you know, I think it really comes down to people seeing those core economics. You know, we and many others have been working on developing these for the last five or six years and some companies even well before that. You know, and it's really been kind of a slow progression, though, of. having people see, you know, and do the techno-economic analysis of, hey, where are wind and solar going to be in the future? How cheap is the energy going to be at off-peak times? Oh, it's okay. It's going to be really cheap, but it's only going to be available at certain times. What are the characteristics of a storage system that you need to take advantage of that? You kind of go down that list. And I think a lot of people independently came to thermal batteries as being the solution there. but it just hasn't really gained prominence till now because not enough people had seen that. An example, though, of something that really pushed it forward in a lot of people's minds is Tesla. So Tesla, in their master plan three, which is their kind of guiding company document, they give a whole scenario, including five pillars of how we'll reach full decarbonization across our entire society. And The fourth pillar, they focus on industrial decarbonization primarily with thermal batteries. And if you actually go into the backup documents in their white paper, you see that they project that there will be more thermal batteries added to the grid than lithium ion batteries in the future. which I think is just a mind-boggling thing to have Tesla, famously a lithium-ion battery manufacturer, among other things, saying, hey, lithium-ion is going to be the second most commonly installed type of battery on the grid. So these are the sorts of things that I think have captured the imagination of policymakers, of investors, so that, yeah, it's having a moment, as you said.

• Speaker #1

  Yeah. Electrify everything, even heat.

• Speaker #0

  That's right.

• Speaker #1

  So I know that you just raised your series B, but I wonder, kind of looking into the future, trying to build hard tech and trying to build hard tech that needs to scale so much to, you know, make a dent in this huge, huge, huge industry. Can you talk to me about maybe the financing landscape for the future? You know, is it VC? Is it project finance? I'm just curious, like how you think about. kind of taking these next steps going forward.

• Speaker #0

  It's a super interesting time for me. I'm learning a ton just through this journey. You know, we're right at kind of the transition out of what traditional venture capital will be. Once you get to these, you know, 100 million plus type rounds, you're starting to dip into growth equity. You know, people that are focused on it less of, hey, I'm going to take, you know, 10 big swings and hope one of them is a home run to people who are saying, hey, now these companies are pretty established. They have customers, they have manufacturing. I'm going to, you know, yeah, some of them may do better than others, but I'm really looking for all of them or most of them to be successful. And that's been super interesting for us to see just the mindset of the people at that later stage. Excuse me. And the other side of it is, as you mentioned, product cap. So the growth equity is like how we continue to fund research and development, you know, grow a larger business. We're over 100 people now. So you can imagine, you know, there's just a lot of internal corporate. financing needs that we have going forward. But then we're going to be moving billions of dollars into these projects. And we're not going to raise all of that. You're not going to see a $5 billion Antora Series D that is all of these projects that we keep on our balance sheet. We're going to be getting other types of capital for that. And we've seen a huge hunger for new types of infrastructure investments that are in the energy transition. So just to take BlackRock again, for instance, they have an infrastructure investing arm. everybody who got into solar and wind, especially those that got in and got that experience early, made a huge amount of money deploying capital into big solar photovoltaic plants. And it became a very boring turn the crank exercise to just deploy tons and tons and tons of money into these assets that just kick off recurring cash flows for those investors. And everybody's looking for what is going to be the next after solar, wind, and now to some extent, lithium ion batteries. What are the next big categories that we can put billions of dollars to work in? And so we've seen, yeah, a real draw from them for, hey, you know, could this technology be that, you know, what are the types of, you know, reliability guarantees, insurance, performance guarantees, et cetera, that we would need to make it so comfortable and safe for us that we can do the same sorts of financings that we do today for a solar project. So that's really a big focus of ours. I mean, obviously. we've got to get the manufacturing right. We've got to get these first deployments in the ground, but we're also spending a lot of time laying the framework for how are we going to show someone in a few years time that there's really no difference in investing in an Antora thermal battery versus a lithium ion battery or a solar installation.

• Speaker #1

  So wild just how far we've come with solar and wind that it's like you said, it's boring. It's just, you know, it was an expected pathway. So we looked forward. Let's I want to start to kind of wrap us up a little bit. I wonder if you could look look back on maybe founding and Torah or maybe just before. What advice would you give to that version of yourself jumping into founding this company?

• Speaker #0

  I love that question. You know, I think two things that we got really right. One was, I think, being problem focused, like we talked about, not pushing a technology, not having a hammer and looking for nails, but really trying to understand what are the basic techno economics. 18 months at the beginning of the company, very small, basically just doing, you know, physics modeling and economic modeling to understand, you know, can we build something that will really make a big impact here? Because we see a lot of companies that just kind of think they have something they maybe they've heard, maybe it's maybe it's popular, you know, maybe it's trendy. And so they just say, hey, we're gonna make a company in that area. And we're just gonna go, but like really taking the time up front to say, what are the metrics we would have to hit for this to be a success? So I think that was something we did really well. And I would certainly give myself that advice or anyone else. The other, though, is really focused on the culture. And, you know, we were very deliberate, you know, writing down, thinking a lot. I mean, I just remember many, many, many hour conversations with myself and my co-founders, Justin and David, thinking through, you know, what does a company need to look like? What is a culture that we would be proud to be a part of? You know, and how is that how does that need to change? when we're in year three versus five versus 10. And putting that work in upfront, I think has really paid dividends. You know, if you talk to the folks at Antwerp today, I think it's an extremely mission driven culture. You don't get people who are spending all their time asking about, hey, when are we going to IPO? We're just, you know, here for a big financial payout. You hear people saying, hey, tell me again, what are the numbers for carbon reductions from that first project? Like, how can I be sure that I'm putting my time on this earth into... the most carbon reductions I can possibly help achieve. So I think you see that. And then the other thing is really focused on a low ego culture. it's actually one of our company's core values to build with humility and openness. And we've just seen the benefits from that over and over again. You don't see the sorts of internal politics you see at some other organizations. You don't see the kind of grandstanding either internally or externally with our suppliers, et cetera. And that's something I hope we keep forever at the company and that we've seen be hugely important to us.

• Speaker #1

  So it's Earth Week. Yesterday was Earth Day, which is why we're here getting to have this wonderful chat. For the occasion, I wonder if you could just tell me about working in climate and climate tech, why you do it, why maybe other people should do it. Celebrate Earth with me, Andrew.

• Speaker #0

  I love that. I love that. I. Yeah, I would really recommend it to anyone who cares about the climate because it gives you optimism. I just, you know, when I talk to, you know, my parents who live up in Oregon and, you know, they are very concerned about the climate. Their friends are very concerned about the climate, you know, and they are always surprised that like given that I'm in deep in this, that I'm so optimistic that we can solve this problem. But when you spend all day surrounded by incredibly smart people. who care deeply about solving this problem, I think you can't help but be optimistic. It's a huge problem. We have to take it super, super seriously. But I think we're starting to get to the point that the resources that are being put against it in terms of all of the wonderful people, the capital starting to flow in, I'm super optimistic about the future. And I think we can get there. So I think there's no better way to get that optimism than being in the trenches with everybody else pushing this fight forward. I also think that some of the nicest people in the world are those that are working in climate. You know, so much of the core of this community, I think, was brought together by people who fundamentally cared about the mission. And it still hasn't become a kind of mercenary culture, you know, where people are just looking at it for their own personal gain. And I think that that culture has just maintained. You know, when I speak with other founders of companies, you know, we're incredibly open. We share, we support, you know, both an individual level and the company level. even companies that would be considered competitors. We work with all of the other thermal energy storage companies all the time on policy, on how to make the right rules, on how to help educate the market on what all of us can do together to solve this problem. And that's something that I think is more unique within the climate space than a lot of other industries.

• Speaker #1

  Yeah. I can't think of a better note to end on. So I will go ahead and wrap us up. Thank you, Andrew, so much for being here and taking the time to speak with me. I really enjoyed it.

• Speaker #0

  Thank you so much. I appreciate all your questions and all the audience questions.

• Speaker #1

  Yes. Thank you so much to our audience for tuning in. Thank you to SOSB for putting on this series. Ben was putting this in the chat, but you should absolutely go and check out all of the other sessions that are going on this week and next, I think. Register for those. And there's also an event in the fall that you should definitely make sure to check out. Have a great rest of your day, everybody.

• Speaker #0

  Thank you so much.