INTERVIEW - Thermal energy storage is viable and affordable solution for heat decarbonisation

As economies across the world put sustained efforts to address climate change by setting targets for net-zero emissions and deployment of renewable energy capacity, the decarbonisation of heat production has a key role in the process as it could serve as a bridge between renewable energy generation and the decarbonisation of industrial processes on a larger scale. RenewablesNow discussed the topic with Simen Bomnes Valamo, Director Market Intelligence at Kyoto Group on the sidelines of the recently held Energy Tech Summit 2024 in Bilbao, Spain.

Kyoto Group AS is a Norwegian company that develops solutions to capture and manage energy from renewable energy sources and apply it to reduce the carbon footprint for industrial process heat. Its proprietary development is Heatcube, a thermal energy storage solution that uses electricity from surplus solar or wind generation and molten salt to produce heat in the form of steam. The product is offered to industrial customers, providing them with technology to lower both their costs and CO2 emissions for producing process heat using renewable energy instead of fossil fuels. Heatcube, which can be configured with storage capacities from 16 MWh to over 120 MWh, is being installed commercially in Hungary.

Q: As it appears that a considerable portion of industrial energy demand is driven by the need for heat, not electricity, do you think thermal energy storage is the missing piece in the puzzle to link renewable energy production and industrial processes on a larger scale?

Correct. Heat is the dominating part of the industrial energy demand. The industry will need to decarbonise this heat demand and to do so, they will need a viable and affordable solution to fuel switch with and Thermal Energy Storage is the most prominent solution to do so. Thermal Energy Storage systems like Heatcube connect the varying renewable energy production with the stable energy demand in the industry – it enables electrification of the industrial heat demand with the lowest possible cost while at the same time solving the flexibility challenges in the power system.

Q: How do you see the product’s future role in the decarbonisation of industrial processes?

Half of the global primary energy consumption is in the form of heat. Almost all this heat is produced by combustion of fossil fuels, making up 40% of the global CO2 emissions. In other words, decarbonisation of heat production is key to reaching any emission reduction targets. The lowest-cost solution for decarbonisation of industrial heat production is electrification with renewable power. However, the industry needs a stable and continuous heat supply while renewables produce energy only when the sun shines and the wind blows. This is exactly what Kyoto Group solves with our Thermal Energy Storage solution - Heatcube. Heatcube sources renewable electricity whenever it is available, either off-grid or through the power market, stores the energy in the form of heat and discharges this heat for use in industrial processes whenever the industry needs it.

Q: The solution bets on using the abundance of renewable energy in off-peak hours. How does it increase the value of grid stabilisation and promote grid balancing?

One of the biggest challenges with the future power system is the increasing need for flexibility that arises from intermittent renewables. Historically, the primary source of flexibility in the power system has been fossil-based power production that is now being replaced with intermittent production. As Heatcube can provide heat 24/7 while using electricity only 4-10 hours of the day, it provides new flexibility to the system and creates value for the grid in two ways. First, it enables load shifting from the hours with high grid load and low power supply to the hours of the day when there is abundance of power production, matching the electricity consumption with the electricity production. Secondly, Heatcube is highly responsive and with the flexibility in storage it can offer ancillary services for the grid operators on a continuous basis. The ability to offer balancing services to the grid benefits not only the grid operators but also the industrial customers who are being remunerated for the service.

Q: What is your opinion about the integration of AI-driven technologies, do you think they could contribute to overcoming the challenges in improving grid flexibility and resilience? Are you using AI-based technologies for that and what are Kyoto Group’s endeavours in that direction?

In the transition towards a more distributed energy system, it follows a necessary integration of smart technologies to fully enable the system flexibility potential and we believe that AI-based solutions will play a central role in this. The power system requirement is reflected in the power markets that are moving towards more flexible products. This is why we have developed an AI-based platform for the operation of Heatcube, ensuring full utilisation of the opportunities in the current power market structure and preparing for future energy market changes.

In Kyoto Group we see AI as an integral part of the future energy system, and we have based our product development on AI technologies. Our commercial Heatcube installation in northern Denmark is the world’s first AI-powered Thermal Energy Storage asset with fully digitalised operation and energy trading. With an AI-based platform for the operation of Heatcube we can optimise performance and minimise operational costs, while also enabling easy integration of AI-based energy trading systems.

Q: Last year, Kyoto Group received an order to install Heatcube commercially in Hungary to reduce natural gas supply for a client? How do you estimate the technology’s potential on a large-scale industrial basis?

Yes, we are installing a Heatcube in Hungary to reduce the natural gas use for KALL Ingredients, a corn processing company using steam to produce sugar products, where Heatcube will reduce their annual CO2 emissions by up to 8,000 tonnes. This is the second commercial installation of Heatcube and we have announced several additional projects that are in the final stage of development. This demonstrates the attractiveness and profitability of Heatcube in the market today and we are continuously maturing the pipeline of projects to be realised in the coming years. The market for green industrial heat is immense, with our Heatcube we target industrial heat in the temperature range 135-400 degrees Celsius which represents a serviceable market of more than 11,000 TWh/year. This is equal to 370,000 Heatcubes installed.

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