Energi Talks

Markham interviews Arvin Ganesan, CEO of US firm Fourth Power, which makes a utility-scale thermal battery technology that provides short- and long-duration energy storage for intermittent renewables.

What is Energi Talks?

Journalist Markham Hislop interviews leading energy experts from around the world about the energy transition and climate change.

Markham:

Welcome to episode 334 of the Energy Talks podcast. I'm energy and climate journalist, Markham Hislow. My guest today is Arvin Gnaeson CEO of us firm 4th power, which makes a utility scale thermal battery technology that provides short and long term energy storage for intermittent renewables. Breakthrough energy founded by Bill Gates is a major investor. We wanna talk about this because we had the Rondo heat battery, folks on a few episodes ago, and this seems to be a an emerging technology.

Markham:

We're very interested in it for for Canada. So So welcome to the interview, Arvin.

Arvin:

Hi. Thanks for having me.

Markham:

Now the Rondo heat folks heat up a bunch of old bricks, very old technology, about 200 years old and store the heat and then release it and turn it into to electricity. So that's, I guess, the basic premise or of how the technology works. Describe your technology for us.

Arvin:

Yeah. Just to, kinda, clarify, Rondo is doing fantastic work. They're using the heated they're using the heated rocks, in this case, for purposes of serving industrial customers. So, you know, folks that need high quality heat for their operations. Our approach is is slightly different.

Arvin:

We are, super heating liquid tin to 25 100 degrees Celsius. We're storing that tin in carbon blocks, that will hold the heat at 24 100 degrees Celsius for weeks or months. And when you wanna go back to electricity, you convert the light emitted from the heat of the metal and the graphite, back to electricity using thermophotovoltaic technology. And we are serving, electricity customers. So we're serving the grid.

Arvin:

We're serving utilities and generators. So similar technology to Rondo, insofar as we're heating things up using electricity, but we're converting that back to electricity, for for grid purposes, at 4th power.

Markham:

So the the innovation here is not the thermovoltaic, transformation or or it's the it's the using the liquid tin and graphite and and the the the how you store the heat.

Arvin:

That's right. That's right. So it's it's how we store the heat and the temperatures at which we are storing the heat. So, you know, previous to our some of the innovations we've been working on, it was considered impossible or very difficult, at least, to pump liquid metals at the temperatures that we're at. So we're able to pump liquid metals to move the heat around our system and we're able to store that efficiently and we're able to convert that back to electricity using thermophotovoltaics and the efficiency of the that TPV or just improving over time.

Markham:

Now, I have to say, one of the things that caught my eye about your company is that, of course, the high temperatures I mean, it's half the sun's temperature.

Arvin:

Yep.

Markham:

And you call it, essentially storing the sun in a box. Yep. That's that's a great marketing phrase. I hope you're using it a lot, because it's it's very, very descriptive. I that those kind of temperatures and maintaining being able to maintain those temperatures for weeks on end seems I don't know.

Markham:

I wouldn't have guessed that that that you would be able to do that and then convert the not the heat, but the light. I, maybe we should start with the light. What, because as a non scientist, I don't think of liquid metal as emitting light. Heat, yes. But not light.

Arvin:

Yeah. So anything that you heat up, any mass that you heat up to those temperatures emits heat and light as well. And this is actually what we're taking advantage of because the hotter you go, you're getting exponential amounts of light from that object. So the benefit of going hotter is, sure, you're you there's more heat there, but you're emitting you are getting exponentially larger amounts of light. So the hotter you get allows you to, convert more and more light back into electricity.

Arvin:

So it is an important physics principle that any any matter heated up emits both heat as well as, a light.

Markham:

Are you able to keep your liquid tin at that kind of temperature? Like how much

Arvin:

Yeah.

Markham:

How much energy does it take to do that?

Arvin:

It's such a great question. So, liquid tin was chosen for this purpose. Liquid tin has a very large range of where it stays as a fluid. Right? So it goes from roughly 250 c all the way up to north of 26 25, 26 100 degrees Celsius where it remains a fluid.

Arvin:

If it goes above that, it turns into a gas and if it goes below, it freezes. We have a lot a lot of range to play with here. And also it has no physical interaction with graphite, which is the balance of the system. So tin makes a great heat transfer fluid for that purpose.

Markham:

Describe that. There's a a a line on your website about how the your system uses plumbing. Yeah. And so describe what this, and it's also half the size of a football field. So this, this is no small technology.

Markham:

Can you give us a a just a brief overview of of the mechanics of this, how it works?

Arvin:

Yeah. Absolutely. So let's let's start with, how we use electricity. So we connect up to the grid. We have electricity from the grid, from solar panels, from really any source of electricity powering very large resistive heaters.

Arvin:

These resistive heaters can heat up in in liquid form up to this 25 100 degrees Celsius. The plumbing system that you described moves the fluid through the various subsystems of the battery. So you have, a you have liquid metal you have pumps that are moving this liquid metal from the heaters, where they're getting the heat, into these storage blocks where the heat is radiating, you know, from from the plumbing system, from where the where the tin moves into the graphite blocks, into the graphite blocks. So the heat transfers from hot to cold. So the heat and light from the tin moves into the blocks.

Arvin:

When you wanna convert back to electricity, again, the liquid metal pushes through the carbon blocks and brings the heat to another subsystem, which is essentially a TPV power block, where you will have the heat moved into this area and you'll have thermofotovoltaics dip in and out to capture the light exactly the amount of light that you want to convert back to electricity. The reason we have these as separate subsystems and we have the graphite plumbing moving the heat is because it allows us to modify the design of the system over time. So utilities and generators are put in a weird position where they could either overbuild and build more storage duration than they need now, because they're trying to future proof something. Or they can build what they need now, maybe 5, 10 hours, knowing that in 10 years, they're gonna need more. By having these subsystems that you can modularly upgrade, we're trying to solve the problem for the utilities to allow them not having to get stuck into a choice that they're making now that'll last forever.

Arvin:

You can, essentially, build a 10 hour battery now, which is what the grid generally needs, And you can upgrade it at a fraction of the overall cost to 10, 20, 30 hours without without having to rebuild a new system. And that's why the plumbing is really important. It's not an integrated unit. It's like several different subsystems.

Markham:

You know, I've I've heard it said that that, technology is, for non scientists is like magic. And your description of that technology, sounds very much like it for this, this non scientist, but I got the basic principle and, and, our, our listeners are generally tend to be in the energy industry or they're, you know, they're, they'll, they'll get it, better than I, but one of the what's the efficiency here? Like, I it seems sounds like you have to put in a lot of renewable, you know, wind or solar, electricity into the system and then and then convert it. So what's the efficiency here?

Arvin:

The efficiency is less than 50%. Right? It's around 41. Right now, we have 41. There's a breakthrough, University of Michigan just had to get it get PPV up to 43.

Arvin:

We think we can get up close to 50, in the coming years. But there's a really important trade off, like round trip efficiency alone is, it's not a full indicator of how a battery will work in a system. You Lithium Ion has bat has a round trip efficiency around 90%. So if the only thing you're evaluating a battery on is lithium I is the round trip efficiency, I mean, it doesn't take a scientist to know the 90% is greater than 41%. But, the cost of a lithium ion battery is 10 times as much as the cost of a battery like ours.

Arvin:

Increasingly, what's gonna happen is the grid will look not only at one factor, like round trip efficiency, but will look at a combination of things including charge time, including round trip efficiency, including all in capital cost, including supply chain. So, our bet is that, as the grid of the future becomes more complicated with more variable sources of generation, it becomes more nuanced than just looking at round trip efficiency.

Markham:

What's the cost, say per kilowatt hour? Yeah. To do to do this?

Arvin:

So what we're projecting for, you know, fairly early into our commercial timeline, we're looking at between 25 and $35 a kilowatt hour for energy stored. To put that in comparison, lithium ion is, you know, in the 3 in the 2, the high twos to low 300s. And that's largely because our supply chain is so simple. Right? 90 90 plus percent of our system by weight is graphite.

Arvin:

And quick like science primer, graphite is just, a form of carbon. So you could use really any sort of form of carbon, from petroleum pitch to coal to coal ash, and refine it down to carbon. So the cost stays super low. Carbon, tin, and these cells that we grow, these thermophotovoltaic cells, are the bulk of our system costs.

Markham:

It seemed, you know, there's been a lot of talk about how, battery storage is great for the, oh, 4 to 8 hour market. But then the question, you know, the I think, you know, long, duration storage, everybody's working on it. There are all kinds of systems out there. Where are you where can you go with this? I mean, does this turn into a 2 day system?

Markham:

Does it turn into a week, a month? What does it look like?

Arvin:

You know what? Whatever you want, we can make it for you. I mean, I'm kinda kidding, but I'm not. The the interesting aspect and the bet that we're making here is that every customer is unique, every interconnection is unique, every country is unique. And offering a one size fits all battery spec, to us, feels fairly market limiting.

Arvin:

So the benefit of our approach is you can size it anywhere you want it to be. So if you are in Arizona, right, you need about 10 hours of storage. If you are, if you're in a place, that has a lot of generation coming in, you know, like, the the southern part, the southeast part of the United States with a lot of data centers, you might be planning for a much larger future than that. So we can build to any duration between, you know, really between 10 and a 100 hours. That's our sweet spot.

Arvin:

We can go up to 500 hours. The market fit might not be there perfectly. And in terms of power, we can really go anywhere from 1 to a 100 megawatts. The basic thesis is the bigger the better, in terms of economics.

Markham:

We're having a lot of debate in our energy circle, which is comprised of, of, energy professionals in in Canada and the debate around is around the what happens when you get basically to the marginal cost of 0 of renewable electricity? What does that do to help? What technologies does it enable? What economic, opportunities does it create? That sort of

Arvin:

thing.

Markham:

And we're getting there pretty quick. I mean, and with the learning curves on solar and the amount that's being, installed globally. So as we, you know, if you look ahead a decade where so it's just gonna be dirt cheap. If it's not marginal cost of 0, we're gonna be in that neighborhood.

Arvin:

Yep.

Markham:

What does that do for a company like yours?

Arvin:

So the the this is the question. This is such a good question because this is what will dictate how much storage gets built and when it gets built. And the cost of what the cost is really gonna matter, and this is why. When you look at all of the new generation that's coming online, if you have a, an opex of 0 for renewables, which I think is basically true, The equation is simple. You need to look at the capex and opex of new renewables plus new storage, And that number needs to beat the capex and opex of fossil fuel.

Arvin:

So even if the marginal cost of generation of, renewables is 0, there's still a capital cost. And that's why you need to target a low capital cost for storage, in order to come in under the cost of natural gas. We're assuming that the dispatchability or the the capacity factor needs to be equal. So you really need to pair storage with solar in order to take advantage of renewables. So to to me, even as the marginal cost comes to 0, you need low cost storage to really be able to unlock the benefit of a 0 marginal cost resource onto the grid.

Arvin:

Otherwise, the you have no choice but to build more natural gas.

Markham:

Let's talk about, I I said in my introduction that, breakthrough energy and Bill Gates, their major investor. And, you know, it's kind of a sexy thing. You know, bill gates, doesn't just invest in anybody or anybody's company. So tell us the role about talk to us about the role that that Bill Gates and his company, play as investors. Are they passive investors, or do they are they quite active?

Arvin:

They are they're quite active. They sit on our board. We have a board member named Phil La Rochelle who sits on our board. He's a he's a PhD. He's a a brilliant mind, and I think the role that they play is fantastic.

Arvin:

It's not only technical, but it's also about commercialization. I think the bet that, Breakthrough Energy Ventures has made is that there's a lot of technologies to solve all the different, elements of the of the climate change problem. But there needs to be investment in those that have a path to to, kinda, no green premium commercialization. And what that means is, of course, the first several units of something new will cost money. And if it's carbon free, he, kind of, thinks of that as a green premium, or their investment philosophy thinks of it as a green premium.

Arvin:

But they're really active and only focus on the companies that have a quick fairly quick path to eliminating that green premium. From a 4th power perspective, our cost is fairly low right out of the gate. So he, focuses, I think, largely on did did their team focuses a lot on kind of commercialization models.

Markham:

Now there's been a lot of talk lately about the overcapacity in the Chinese, battery industry And the extent to which the, China has driven the the way they've driven the cost of batteries down in the last year alone is astounding. But this is technology that's been around for a

Arvin:

while. Yep.

Markham:

You know, 30, 35 years and it's, and they've man they've, they've, mastered it. They've scaled it. They've they're the they dominate it. But last year, the conversation was around we we can't be vulnerable to China's supply chains. We cannot depend upon our biggest international geopolitical competitor for the key technologies that run our economy and our military for for that matter.

Markham:

That's a big issue in the US.

Arvin:

Yep.

Markham:

And one of the questions that I've asked, folks that have come on this on this podcast is, can the US innovate its way into a dominant position in these kinds of industries? Can it come up with technologies like the one that that your company has that then kind of leapfrog the US over where China is and give it a competitive advantage or at least make it competitive with with China? What do you think of that?

Arvin:

I mean, the answer is absolutely yes. And I think we're starting to see that. So over the last several years, there have been, policies put in place, tax credits and grants that have really accelerated US deployment. And let me give you an example. There's a there's an extremely lucrative tax credit called the 45 x tax credit in the United States, which is absolutely spurring the development, in our case, of graphite manufacturing in the United States, as well as modular battery manufacturing.

Arvin:

This is this is absolutely accelerating the development of these technologies. Not only the development of the intellectual property, of these technologies, but also the manufacturing in the United States. So I think policy is really driving the United States, on this area.

Markham:

And and you've got a background in this because you were appointed by president Obama to lead regulatory development at the EPA. Yep. So you know this stuff. Yep. And and and I'm I'm fascinated by it, because the American I mean, prior to 1980, everybody did an industrial policy.

Arvin:

Yep.

Markham:

And we continue to do it all of the, you know, the developed nations, developed economies. We continue to do it, but we didn't do nearly as much of it, and we didn't do it in the old style that it was done prior to 1980. But it's I think it's fair to say that we we moved to a market based approach and government intervention in the economy was, you know, frowned upon. Let's put it that way. But now thanks to I think China has has over the last 20 years has just demonstrated that industrial policy has to be there.

Markham:

If you wanna play in this game, you better have an industrial policy. Now where I'm going with this, Arvin, is I am so impressed by how the Americans went from, you know, 2, 3 years ago, there wasn't much, and bam, along comes the infrastructure act and the chips act and the Yep. IRA and on and on. And it's like all of this industrial policy and the programs and the and the the infrastructure around it just blossomed out of nowhere. And that's a very impressive that's a very impressive feat, I think.

Arvin:

I it's I could not agree with you more. I I love this this this point here. United States has not had a dominant industrial policy for, as you said, for for decades, and that has absolutely changed almost overnight. I think the CHIPS Act in particular, though the other, legislations you referenced as well, it has changed it overnight.

Markham:

And I one of the reasons I bring this up is because, I interview a lot of economists, and I'm connected with a lot of them on social media. And the Canadian ones are carping, and I use that word, you know, deliberately, carping about how what market failure does Canadian industrial policy is trying to fail? Why are we giving companies 1,000,000,000 of dollars to build battery plants? Because dudes, if you don't build it, you have to buy it. If you wanna play in this in the in this industrial revolution, the 6th one or 4th one, whatever whichever one we're in, you have to you have to write checks.

Markham:

That's all there is to it, and nobody writes checks like the Americans.

Arvin:

Yeah. You know, I would all policy is a a It's not just in the United States. It's not just in the United States. It's it is it is in every country. Right?

Arvin:

Whether it's forestry policy, whether it's extraction. Through means of policy, we are encouraging development in different sectors. This is no different.

Markham:

I I would agree wholeheartedly. And then I think that we need to get away from this, classical, you know, Milton Friedman needs to be bounced out of the, out of the policy, that we're they really, you know, it's time to

Arvin:

stay in the universities.

Markham:

Yes. Yes. Yes. What, be to wrap up our interview, I wanna talk about your founder a bit, and I hope I get this pronounce this correctly. Ashokund Henry?

Arvin:

Exactly.

Markham:

Well, tell us about Oshoguen.

Arvin:

He's a he's a remarkable guy. You know, I wasn't when I was leaving Apple, he's the reason he's the reason I came here. He is a he is a in general, when he's not with us I mean, right now he's with us, but he's a full time, professor. He's a tenured professor of mechanical engineering at MIT. He's an expert in heat transfer.

Arvin:

And heat transfer is the engine that drives this battery. He He's been working on this technology for the better part of the last decade. And the thesis was, you know, government grants, university research, That stuff is the engine to get the basic work done. And where we are 10 years later is we are fairly far along in the development of this battery because a lot of it has been done at the university level. We've managed to get all the IP, all the licenses, and all that stuff.

Arvin:

But this has been his his work for the last decade. And he brings this, ingenuity about engineering, to solve complex problems. When you're around engineers, you it's the art of it's the art of everything that's possible within the rubric of science, and it is inspiring to be around him and the team.

Markham:

Well, that that's it. That's very fascinating. One of the last question here, is how have the electric utilities responded to your technology?

Arvin:

Really well. I mean, here's the here's the problem that they face. A Google query takes up 1 tenth of the electricity as the same query in chat gpt would. So if you're a utility and you have data center build out I don't understand, but I found something related. Do you wanna know how much energy does a chat GPT query consume?

Arvin:

I don't know if you could hear that. Oh,

Markham:

I couldn't. It's staying in, by the way.

Arvin:

Yeah. Right. So it's gonna consume an order of magnitude more power. So utilities in general are at an inflection point where they're fairly, I know, I don't wanna say nervous about my customers. But the technology skepticism or skittishness that they may have had, is now surpassed with, we need to find more electrons, and we need to find them now.

Arvin:

They they like our focus on what it means for them as a customer. They like the simplicity of our design, and they like our scalable supply chain. So it's going great. I think that the energy world is in a huge transition right now, and it takes really understanding your customers and having, like, very scalable technologies to really kind of grab hold.

Markham:

Oh, I I my final comment is has to be, and my regular listeners have have heard this before. We do a lot of our work in Alberta, which is because, you know, the Texas of Canada. Yeah. You know? Canada is the 4th largest oil company oil producing nation in the world.

Arvin:

Oh, yeah.

Markham:

We're we're we're not we're not peanuts. And the problem in, Alberta is the fact that the what you just said about the glow global energy system being transformed, they deny. Like, literally, they they have adopted the OPEC narrative of the slow energy transition. I had a I had a scrap just yesterday on on on LinkedIn with, a fellow who runs a wind and solar, development company, who also believes that narrative, that, you know, oil and gas are gonna be around for decades in the same roughly the same quantities we use today. And whenever I I talk to them, it's they just don't understand the magnitude of change at the global level.

Markham:

That's the thing. The amount of innovation and the scale up of the engineering and manufacturing to turn that innovation into products and, you know, just like you folks are doing because we don't see it in Canada nearly as much. You know, we're still heroes of wooden drawers of water. But when I talk to innovators like, you know, like yourself, Irvin, it comes out in spades. And it just when I say the future is electric, it's because I talk to enough people like you that I it's it's it's obvious to me.

Arvin:

Well yeah. And, you know, ultimately, my theory of change is people have a lot of things to to think about, to struggle with. Right? The cost of living, in general, is high. And so this transition is only gonna happen is if the if the transition is cheaper and easier and better than what we have now.

Arvin:

That's why I feel so optimistic about this. To go back to your point about the marginal cost of electricity, this is the this is the gold mine here. Right? We could have cheaper power. We could have electricity that powers people's lives at a lower cost, paying lower bills.

Arvin:

It's gonna be hard to avoid that future.

Markham:

I would agree wholeheartedly. Arvind, thank you very much. This has been a fascinating conversation.

Arvin:

Thanks for your time. Thank you. Take care.