A new crop of innovative companies is racing to commercialize and scale up thermal batteries, a novel technology for storing and delivering heat to manufacturing processes. Thermal batteries enable manufacturers in diverse industries — such as metal parts and equipment, plastics, food processing, chemicals, and renewable fuels — to access cost-competitive electrical heating, cutting pollution while improving the bottom line.
What is a thermal battery?
A thermal battery turns electricity into heat, stores that heat until it is needed by an industrial facility, and delivers the heat on demand. At the heart of the battery is a thermal storage medium, such as carbon blocks, that can reach high temperatures without melting or breaking down. The battery takes in electricity and converts it to heat via electrical resistance. The carbon blocks are surrounded by an insulated case that minimizes heat losses. The heat loss rate can be as low as 1 percent per day, though to maintain a battery’s high temperature, it should be charged at least once every few days. When the industrial facility requires heat for its manufacturing processes, it taps heat from the battery (which may be running continuously, in the case of a facility operating 24/7).
Storing energy as heat is cheaper than storing energy in lithium-ion or other chemical batteries. Thermal batteries do not require expensive minerals, such as lithium or cobalt, so their capital cost can be less than a fifth that of lithium-ion batteries. And thermal batteries can deliver heat at up to 1,500 to 1,700°C, hot enough for most industrial processes, including in heavy industries like cement manufacturing. This allows them to replace combustion in a wide range of industrial heating equipment, such as boilers, furnaces, chemical reactors, and distillation columns. Since 85 percent of the fossil fuels burned by manufacturing firms goes to producing heat for industrial processes (more than 8 quadrillion BTU in 2022), the market opportunity for thermal batteries is immense.
Thermal batteries offer six key benefits to manufacturing firms:
1. Thermal batteries lower manufacturers’ energy costs by using excess electrons
When it is sunny or windy, solar and wind power plants produce extremely cheap electricity, driving down the wholesale market price of electricity in those hours of the day. At other times, when demand is high or when renewable energy is less productive, electricity can be expensive. In parts of the country where a lot of renewables are on the grid and it is difficult to export electricity during times of overproduction due to congestion in transmission lines, electricity prices can be near zero or even negative. Much of this electricity ends up wasted, which increases the costs to consumers. Thermal batteries can soak up these excess, low-market-value electrons, turning them into steady, reliable heat for industry. By charging only when electricity is cheap and enabling the manufacturer to avoid buying electricity when it is expensive, thermal batteries can deliver heat at prices below that of natural gas.
Industrial firms concerned about lengthy periods of low renewable generation and high electricity prices (e.g., two weeks of calm, cloudy days) could retain their natural gas heating equipment and fall back on it during these rare episodes, limiting their financial risk.
2. Thermal batteries help balance the grid and reduce infrastructure needs, so utilities can pass savings to manufacturers and other grid-connected customers
When electricity demand is high, utilities must operate inefficient “peaker” power plants or import electricity from neighboring regions to meet demand — both of which are expensive. Also, electric utilities must build grid infrastructure, such as transmission lines and substations, to meet peak demand and avoid blackouts. A technology that increases utilization of current infrastructure but avoids adding electricity demand to the grid in the peak hours saves money for grid operators and customers.
Thermal batteries help industries electrify without increasing peak demand. In fact, by adding demand in hours when electricity is abundant, thermal batteries actually help utilities sell more electricity while making better use of the spare capacity of existing infrastructure.
Electricity suppliers can pass some of these savings on to their existing customers and industrial firms with thermal batteries. For instance, a utility may offer electricity at near-zero cost if it — rather than the customer — is able to decide when to dispatch the electricity, so it can send only the cheapest energy to thermal batteries. Consider a utility that agrees to supply a certain amount of electricity per hour to a thermal battery installation for at least 16 hours out of every 48-hour period as long as it can choose the particular hours in which it will supply that electricity. Today, such arrangements are often negotiated with utilities on a project-by-project basis, which can mean long timelines for thermal battery projects. However, in the longer run, the Federal Energy Regulatory Commission and state Public Utilities Commissions can push utilities to routinely offer discounted rate plans to flexible industrial loads, helping to unlock these cost savings and other grid benefits at scale.
3. Thermal batteries help firms avoid natural gas price volatility and supply disruptions
Natural gas prices can be highly volatile — significantly more volatile than electricity rates. For example, in the second half of 2019, natural gas prices for U.S. industrial buyers averaged $3.86 per million BTU (MMBtu) in 2022 dollars. Prices dropped in 2020 due to the COVID-19 pandemic, then skyrocketed in 2021-2022, reaching $9.23/MMBtu in September 2022, more than double the 2019 price. But even this was only about half of what natural gas cost in July 2008: $17.10/MMBtu in 2022 dollars. Extreme price volatility makes it difficult for industries to plan long-term investments. Electricity prices are significantly less volatile — and because thermal batteries charge when electricity is abundant and cheap, they enable firms to avoid electricity price spikes, reducing energy cost volatility even relative to other electrified technologies.
Natural gas supplies are also vulnerable to disruption. For example, in 2021, winter storm Uri forced the shutdown of natural gas infrastructure across Texas, causing gas production to fall by nearly half and leaving millions of people and businesses without heat or electricity. The “primary cause” of the blackouts was the inability of natural gas-burning power plants to obtain natural gas, not problems with the electricity grid.
Should electricity supplies be interrupted, thermal batteries mitigate risks to manufacturers. The vast majority of blackouts last no more than a few hours. Since they provide energy storage, thermal batteries can help industrial firms ride out these blackouts without pausing operations. To support non-thermal electrical loads, such as conveyor belts and robots, a facility may use chemical batteries or novel thermophotovoltaic panels that convert some of the stored heat back to electricity at need (heat-to-power). For instance, thermal battery maker Antora Energy recently received a $14.5 million grant from the U.S. Department of Energy (DOE) to scale up its heat-to-power technology.
4. Thermal batteries enable access to financing
Thermal batteries allow manufacturers to access valuable tax credits and low-cost financing. For instance, the Advanced Manufacturing Production Credit (45X) will pay $45 per kilowatt-hour of capacity for non-cell battery modules, a credit for which the IRS has determined that thermal batteries qualify. This can reduce thermal battery capital costs, improving project economics for customers. Thermal batteries also enable a manufacturer to receive the Qualifying Advanced Energy Project Credit (48C), which pays up to 30 percent of the costs of an industrial retrofit project that reduces emissions by at least 20 percent. Some types of firms may qualify for additional credits, such as renewable fuel producers, who can use thermal batteries to cut their emissions and thereby qualify for the Clean Fuel Production Credit (45Z). And thermal batteries also enable manufacturers to claim state-level incentives, such as those offered under the RISE PA program, which will award nearly $400 million to industrial facilities in Pennsylvania that adopt clean industrial technologies.
Additionally, the DOE has awarded more than $6 billion to 33 industrial projects, four of which involve thermal energy storage, through its Industrial Demonstrations Program. And industries implementing thermal battery projects may be more attractive to ESG investors and state or national green banks, which can offer financing at a discount relative to traditional lenders.
5. Thermal batteries cut conventional pollution, saving lives and money
As an electrical heating technology, thermal batteries create no on-site pollution. This creates further savings for manufacturers, such as not needing to purchase or operate exhaust treatment facilities (to control particulates, nitrogen oxides, sulfur oxides, etc.), not needing to report emissions to regulators, reduced maintenance and cleaning of combustion chambers, and potentially reduced insurance premiums thanks to improved workplace health and safety.
Surrounding communities also benefit. The EPA estimates that pollution from industrial facilities kills between 8,000 and 14,000 Americans and causes around 5.4 million asthma attacks, 660,000 lost days of work, and almost 2 million lost days of school every year. Eliminating combustion-related emissions creates a healthier environment for workers and their families. This can help manufacturers reduce sick absences and attract the best and brightest workers — an important consideration given the severe shortage of skilled industrial workers in the U.S., projected to rise to 2.1 million unfilled positions by 2030.
6. Thermal batteries reduce the carbon intensity of manufactured goods, making industry more competitive domestically and globally
Thermal batteries emit no GHGs (and if supplied with zero-carbon electricity, eliminate upstream GHG emissions as well). This allows a manufacturer to dramatically lower the carbon intensity of its products, enabling them to sell to businesses and governments with green procurement goals. For instance, companies ranging from Walmart to Apple have established GHG emissions requirements for their suppliers. Another example is the First Movers Coalition, a group of more than 95 companies that have made commitments to procure cleanly-produced products and materials.
Commitments to procure low-carbon products are not limited to private firms. California, other U.S. states, and the federal government have “buy clean” policies aimed at procuring low-carbon materials like concrete and steel for public buildings, roads, and other infrastructure. Similarly, manufacturers can export low-carbon products to the European Union without incurring GHG-based border tariffs under the EU’s new Carbon Border Adjustment Mechanism. The U.S. is considering a similar policy, with four carbon-based border tariff bills introduced in 2023 alone (three of which had Republican co-sponsors).
Finally, sustainable production can be helpful for a company’s ability to market their products to consumers. Two thirds of Americans, and 80 percent of young adults, report that they are willing to pay more for sustainably produced products.
A win-win for manufacturers and society
Thermal batteries are poised to transform industrial heating. They have the potential to deliver significant cost and revenue improvements for manufacturers, bolster American energy security and electricity system resilience, and reduce conventional and greenhouse gas pollution, benefitting workers, communities, and the environment.
