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In this episode Jon Slowe explores how storing ‘cold’ can help commercial buildings shift their demand away from peak periods. Jon talks with Yaron Ben Nun, Founder & President with Israel-based Nostromo Energy, commercialising water-based energy storage in California.
Welcome to Talking New Energy, a podcast from Delta-EE, the new energy experts. We'll be talking about how the energy transition is developing across Europe with guests who are working at the leading edge of this transition.
Hello, and welcome to the episode. I'm going to start this week's episode with a statistic or a bit of analysis. And this is from a company called LCP that Delta-EE is now part of. So by 2030 in the UK, our renewables and nuclear backed energy system will be producing more energy than it uses for half the time. So for half of the year, we'll be producing more energy in the UK than we need. That's quite a stark statistic. And it's not just the UK, that will be for more and more countries that have a big proportion of their energy coming from renewables.
Now, rather than waste that energy or curtail it, we need to be using it so we need flexibility, and a lot of that being demand side flexibility, to make sure we can move to a more renewable, more sustainable energy system. And today we're going to be looking at the role of buildings and flexibility in buildings.
So buildings themselves have some flexibility. The thermal mass of a building means as you warm it up and then it will stay warm for a while, so you could switch the heating off or switch the cooling off for a short period of time. But there are other ways to also enhance the flexibility of buildings. And today we're looking at one of those ways with a company based in Israel also working in California. That company is called Nostromo. And I'm delighted today to have Yaron Ben Nun join us. Yaron is founder, President, CTO at Nostromo. Hello Yaron, welcome to the podcast.
Hello, Jon. Thank you very much for having me.
Thanks for joining. Yaron, can you give our listeners a bit of an elevator pitch for Nostromo... Just describe briefly who you are, what you do, any key statistics or numbers?
Sure. So Nostromo is here to enable water, H2O, tap water to become a main, I would say active mean for energy storage in the transformation of the grid as cold energy storage mean. What I mean by that is using the great properties of water to store cold energy, which is actually sub energy or non energy. And we believe we are reinventing the usage of ice in order to transform buildings into grid interactive buildings, meaning that they can actually change the way they consume energy and the time that they consume their energy in order to support the penetration of renewables and the ever changing grid towards 100% renewable, which is a bit far away. But we already can see how instability the grid is becoming.
So to put it simply when there's excess, when you need to cool buildings, when there's excess energy, you could soak up that excess energy, store it as ice, and then you can use that ice to cool the building at another point in time when there's not excessive energy on the grid.
That's simply said yes, like every energy storage mean that they take excess of surplus energy and use it when there is scarce. But in our case, we're talking about totally clean, zero negative environment influence and the safe material and water does not degrade in our cells can show as little as 1% degradation after 20 years of usage. And we're claiming a very simple claim that says if we are pursuing a sustainable future we should do this using sustainable means. These are our claim to fame, if I may say so.
You're a battery company but your battery is based on water effectively?
That's right. It's a water-based battery technology.
How long have you been going? Have you got products in the market? How many buildings are you in? For example, can you give a listeners a feel for are you at the R and D stage? Are you fully commercial? Where are you on that spectrum?
Sure. We are six years old. Our technology is at 7,8 TRL technology readiness level, meaning that we already have commercial systems installed. I can share with you some interesting technological elements or properties. Our system is installed in three commercial sites in Israel and now we are building our first US system. It's going to be in the Beverly Hilton in Beverly Hills and the Waldorf Astoria, which these two hotels are connected and using the same energy centre. And we're building there a 2000 tonne refrigeration hour system, meaning we can avoid 1500 kWh at times for cooling on the Waldorf Astoria and the Beverly Hilton in Beverly Hills. This system will start working about three months from now. We just started working on site.
Okay. I know the idea of ice storage for buildings has been around for quite a long time. I don't know if it's widespread in the US, but the concept has been around systems have been deployed. If you had to pick one or two things that are different about your product or that you're proud of, what would that be?
I built Nostromo because I saw that there is no other ice storage technology that the market or the commercial market actually embraced. Of course there are some companies doing that and for many years. But the solution they're suggesting is usually connected to bulky tanks, very big, very massive tanks that almost no consumer or commercial users, which is our main target. Industrial, commercial, industrial consumers will deploy as a retrofit. You might take this in consideration while building a new build, but not as a retrofit. And we believe that the market needs a good retrofit solution. So our system is different in many things, but the first and foremost is that it's built on a modular Lego looks like cells that can be arranged in any kind of arrangement or form that will suit the already existing commercial industrial facility without any hassle to the owner. So we are left only with the techno-economical questions and not with the size and form.
So are these... I imagine they're normally put on the roof, is that right, of the building? You see on the roof of hotels, offices, you see air conditioning, it's all sorts of HVAC equipment. Is that where you're putting your product in those?
Yeah. Our first installations were rooftop in shallow formation, but in the Hilton, it's in the basement in a different formation. It can go along the walls, can go below your feet. You can put deck or solar systems on it. You should just imagine building blocks looks like Legos. Or you can go to our website and see how it works. It's modular. Many times it will be on the rooftop.
Okay. And this is one of my passions. Regular listeners will know that solutions for the energy transitions are often designed for the energy system rather than being designed for customers. So they're designed for the energy system first. And then you try and think, oh, how do we fit that into a building? So Yaron, I'm interested in how you found out what was the right design for these Lego bricks, the word that you use. Did you go to lots of commercial buildings? How did you build that deep understanding of what's necessary to make this work?
The one idea that drove me to start this, maybe even to become an entrepreneur, was first understanding the need. And the need was as simple as that. The cities are not ready for the energy transition. The transmission lines are too lean, lame, old, and they cannot bear the huge development in energy consumption inside the city. And it was leaning upon just one notion, one knowledge, one thing that I knew about water, that water has 41 anomalies. And one of them is that the latent heat of water, meaning the amount of energy that water can absorb while change phasing from liquid glass is the highest in nature. Meaning just understanding that ice cubes, the very normal size that we are very used to see are the most dense way that the nature gave us to hold cold energy. Then I needed just another trivia to know that cooling loads, well, not in the UK, but in most of the world, the Tropic and the subtropic areas - take the latitude between San Francisco and New York City, go down through the whole world, through the pyramids, down to Brazil, Rio de Janeiro or lower. This is called the Sun Belt, you know 80% of the world population lives there and their electric grids are totally biased towards the hottest days of the year.
In India, you just heard maybe there are heat waves today and huge energy crisis is evolving. This energy crisis connected to heat waves is always connected to one thing, air conditioning system cooling. And you should remember that heating is very diverse. You can heat yourself with so many waste fuels, wood, electricity and so forth. But cooling will always be consists of electricity. So the electric grid in most countries or for the most population of the world, the electric grids are suffering from peak demand, totally leaning on cooling demand, meaning...
I can see that...
Cooling needs are driving peak demand. And peak demand is the biggest phenomenon that the grid is trying to help.
That's the energy system challenge which you've articulated really well. What about working, making it work for customers? So maybe think of these three sites in Israel and this hotel in, building in Beverly Hills that you're talking about. It sounds very logical and as you say, you can do techno-economic calculations and you can prove a business case for customers...
Actually, it doesn't work.
Right.
Actually there is no economical good reason for anyone to invest in such system on his own premises or his own facility anywhere else but California. And believe me, I've learned to read the tariff rate structure of almost every country in the world.
And that's because of their demand charges, I imagine, or their charges are associated with that.
You're totally right. The demand charges system, which is actually a capacity charge that says it's not the energy you buy, it's the facilitation of the whole grid waiting for you to consume your needs at maximum consumption. This methodology is the main driver for us to be economically viable. And that goes for California, almost only in California. There are other States in the United States, it starts to become more and more economic to invest on your own facility, to be able to install energy storage systems. But in California, it's viable as we speak.
Okay and California is often ahead of the curve, isn't it? I know it's energy markets, you know, you could look to Europe where deregulation is probably further advanced. But I think this idea of peak and capacity charges is going to become more and more widespread. California is leading, but as we move to a more renewable system, we will be less concerned about how much energy and more about the timing of energy. And that statistic I led the podcast with, I think that reinforces it. We'll have more and more times when energy is wasted. So more dynamic tariffs and more capacity charges.
Yeah. We are connected to a service called Watt Time, you know double u, a, double t. And this is actually the official carbon counter for the United States. So every country in the United States, every city has its own momentarily carbon kWh consumption related. So every kWh you're consuming has a different carbon weight. And in California, in Los Angeles, as we speak, when you're consuming electricity at between seven and half AM to 4 PM, you will be charged zero carbon. Then when the sun is starting to set down because they have samples of solar, 18,000 megawatts of solar, and then when the sun starts to set down and the peaker plants, which are very inefficient gas turbines, kick in in order to support the loss of energy because of the sun setting down. The carbon weight for every kWh is jumping through 600 grams per each kWh. The meaning of that is like you said, the efficiency of your storage. Although our storage is very efficient, the efficiency of the storage is getting much less important as when you are actually charging the timing for charging because the carbon related emissions might be very low, up to zero at certain time and very high.
I remember in one of my first energy jobs thinking that surely production from solar and demand from cooling are perfectly aligned. Isn't that fantastic?
It's not.
As you say, it's not.There's solar peaks during the afternoon and the cooling demand carries on into the evening when the solar is no longer producing.
Why? Do you know the answer for that? Why is that?
I have some ideas, but Yaron, you explain.
This is thermal memory of the building. The building is being heated all day long. And of course there are heat islands inside the cities. And although the sun is setting down, we are actually taking off the main loads of air conditioning at 9, 10 PM. So this is we are calling this cooling solar gap. When you have so much solar and of course heat that comes together and then the solar is setting down and now you have these 5 hours. It has a professional name called the duck curve or the ramp up, meaning the time that the sun is setting down in California, it is very traumatic for the grid. Every day they're losing 18,000 megawatt solar production. Then somebody needs to kick in. The guys or the power plants that they are being used to kick in now as we speak, are peak plants the meaning of that? They are gas turbines. One cycle and they are very inefficient and you can't do the sunset without them. This is how big is the need for storage in order to ease down this phenomenon?
Your ice units then... Are they typically starting to charge or freeze the water at 7, 8 o'clock in the morning and then are they charging throughout the whole day or how long do they take to charge and how long can they discharge for? How much energy can they store?
Okay, I'll divide my answer for two parts. The first part is how you actually use your energy storage system. If that goes, it doesn't matter if it's our system or any other system. You need to understand that the most important thing is not when you're charging as when you're discharged. Why? Because the phenomenon I just described is that the grid needs support when the sun is setting down. Of course, it is better if you will charge through sunset. In our case, since we're doing ice, it will be more efficient to charge at night because of the cooler ambient temperatures. It will be more carbon intense to do that. Although the efficiency of the electricity is higher, the carbon related will be higher. So we believe that our methodology of charging will be conduct by mainly the cost of kWh and not the carbon related to start with. But as you understand, the carbon credit market is emerging. Soon enough the clean building law will kick in in California and Los Angeles in 2024, and there are lots of things coming towards us. So I believe that the balance between the cost of the kWh and the carbon cost of the kWh will become more even.
So, in the future, I'm sure that we will charge at morning until noon, but now we will start at night, because in the equation of the cost effectiveness, the charging at night is better, it's more covered.
So that's the charging side.
Yeah. And the discharge. So our system is modular. We can do any accumulation of cells. Each cell called ice brick, and it's encapsulated ice technology. This technology, when I'm saying encapsulated ice, I mean there is a shell, and inside the shell there are many capsules. Inside the capsules we hold water, and inside the water we have a special ingredient I cannot disclose, but it's a nucleating agent, meaning that our nucleating phenomena is happening at very high temperatures. When I'm saying high temperatures of ice nucleating, I mean close to zero. Of course, it must be below zero. It will be minus two centigrade, or about 27, 28 Fahrenheit.
We don't need to go too far below zero is what you're saying. Yeah.
Efficiency of charging is much higher than any other ice technology that has been presented. Then every cell can hold ten tonne refrigeration hours. Tonne Refrigeration hour is another name for 3024 kilocalories, 12,000 BTU or 3.517 kWh. So this is a different name for the same amount of energy just being used for the cooling. We use tonne refrigeration hour and we can hold ten of these units. Each unit of tonnen refrigeration hour, when it is being discharged to the customer system can avoid about one kWh. So if you would like to compare us to batteries, each cell can avoid about ten kWh. In the Hilton Beverly Hills, we are putting 200 cells that can hold 2000 tonne refrigeration hour. And in this case, we can avoid only 1500 kWh. And this is because their current cooling system is very efficient. So we always see how much cold energy will avoid, how much electricity. So this really depends on the system that we are avoiding. So if you have a very efficient system, it will be less kWh.
Can you give our listeners a feel for the footprint of 2000 cells? How many metres byow h many metres are we talking about? Is it like a bus? What's the footprint like?
A minibus.
Minibus. Okay.
I can tell you it's 200 cells, which their dimension is like twelve inch or 25 centimetres high, four metres or 16ft long and 50 centimetres or a little bit less than 2ft width. So you have a square rectangular block, then you need 200 like that so you can put them in any way or form that you would like in the Hilton they are stacked because they're in the basement, they're stacked on each other. We have eight levels of these and about twelve, I don't remember the exact number side the size so it will be about six metres...
These are like the Lego bricks you talk about. So does that give you the flexibility Yaron then to put them in the basement, to put them side by side on the roof, to stack them on top of each other in the roof, you can be quite flexible in how you incorporate them into a building.
Yeah. The form factor is very important for the customer and I would like to add something that you mentioned about customers and the energy arena or energy market in general. You are perfectly right to point out that if you don't mind, I will give it a name. What's happening now this is really interesting is that the energy ecosystem was one thing. Then came the metre that is actually counting on kWh that we are consuming or buying. And then came the customers and it was actually the end user of the energy ecosystem. And today what really changes is that us as the end users becoming a part of the energy system. The energy system needs our compliance and needs our ability to perform different activities or to show different profile of consumption in order to support huge needs that are coming. And we didn't say even one word on the electric vehicles kicking in. So what I'm saying and what we are saying to our customers, we're saying look, you have a real estate asset, that's what this is what you're doing. We offer you to make it an energy storage asset on the top of the real estate asset.
So instead of just paying your bills become an active partner and start to generate savings because you are participating in this huge transition. The customers that we are talking with have a lot of interest to hear what we're saying and some of them even to sign contract with us. And this is because of many reasons but I can name one except of course they need to be part of this change to lead to some of the customers would like to be leaders in this field of change but the other thing is that lots of regulations are coming in and nobody really knows which and how much they will interfere with the everyday usage or running these kinds of facilities.
Does that mean that what you're hearing from customers is what they really want is risk mitigation? They see risk around their energy in the future?
Totally right. Just think for yourself. If you are a developer working in California on 200, 300, $400 million project, you need to hedge your energy procuring risk because the carbon emissions law that's kicking in will going to hurt your business in a way or going to narrow your steps. So some of them would like to be ready before the regulations come as mandatory.
Let me please give you an interesting comparison. You know that underground parking lots were not mandatory until the late 60s, early 70s. So just imagine yourself modern cities that has no mandatory regulations for underground parking for cars. In some cities it will be unbearable. Los Angeles without that would be stacked in full with cars without the ability to move. So there has to be one day that the regulator said, you know what, there is this solution that can mitigate this problem evolving, which is many private cars coming into the city. And from now on you must bring you must build an underground storage for cars if you make you call it, otherwise the city will be back. Otherwise the infrastructure will collapse.
So when you talk with customers and when you talk with developers, building owners, some of them, at least some of them see this risk coming. How many customers are you...
They see another risk.
How many customers are you speaking with? Are you speaking with a few?
We're a public company so we need to move fast. And we are now working. Most of my crew is now in La and we are just building our sales force in LA, in Southern California, Los Angeles and San Diego are amazingly ready for what we are doing, I mean economically viable. And I would say that I can't talk about customers that we haven't signed cona tract with, but I can assure you that until the end of this year we'll have plenty. And I can tell you that the customer has another risk in mind that they are taking into consideration. And this is the low voltage capacity risk when our customers, which are all industrial and commercial customers, just think about the shopping mall, hospital, whatever. They see that everybody are starting to need charging for their EV for their electric vehicles. Some of them would like to charge it fast. This is the Superchargers are 150 kw in capacity. These buildings were designed to hold such and such kw without the electric vehicle consumption. Now it's not only about being able to provide the service. This is another profit generation for these customers. An EV charging point for 150 kw can generate half a dollar per each kw anyhow. So this is like a $75 to $100 generation.
You can only do that if you've got enough capacity on the grid. Exactly.
That's right. So what we are suggesting is that since we can charge at times of low capacity when we're taking off the biggest consumer on site, which is the air conditioning system, we are actually giving the customer such and such capacity that can be sold to users to end users at a very high cost. And this phenomenon is rising very fast. So we see that as one of the most interesting, I would say selling points, if I may say so is soon enough. Even if you would like to buy Capacitor or sorry, a transformer, the energy company will not give you one because they don't have capacity. So this is another selling point that people are aware of.
Okay. Yeah. Now time is getting the better of us. So let's bring out the Talking New Energy crystal ball and I'm going to set the dial this week to 2030. So seven and a half, eight years' time, I'd like you to give me your vision for not necessarily just Nostromo but ice storage in general. How would you describe your vision, realistic vision for what can be achieved by 2030? You can express that in any way you want. Percentage of buildings, number of sales, however you want to express.
I would say simply that energy storageit, idoesn't mean in what technologyt, it must be clean technology and sustainable and safe technology. Therefore, I believe that in the next eight to ten years solid state batteries will come in. There will be a lot of this kind of technologies kicking in. But I'm sure there is no doubt for me that buildings will become the major asset to direct them, to try to make them compliance to different loads and so forth. So I believe that first of all regulation of building a new build will have to put energy storage inside in some percentage.
If you ask me how much of their peak demand will have to be satisfied with the energy storage in the regulation, I can easily say 20% and it will be for at least 5 hours. So anybody can easily imagine how big his storage system will have to be. But then I believe that after that that will be the first thing new build. After that, retrofitting building with energy storage will become a must. And it won't be rather by law it will be by, I would say by financial tools. They will be pushed to invest in these.
Otherwise the grid cannot involve. You need to understand 90% of the energy storage now is being commissioned outside of the cities near the solar station somewhere in the Mojave desert. Biggest problem evolving inside the cities and demand site management will become the biggest story of the coming years. I believe so.
Very briefly, just in 30 seconds, Yaron. From a founder perspective of Nostromo, what's your single biggest challenge to growing and you're not allowed to accept regulation or policy because that's too easy. So what's your single biggest challenge?
Awareness.
Awareness. Okay.
It's all about awareness. Just look at the way we're consuming food and I'm sure you know that the biggest thing we can do with our food is just be aware of what are we eating and what does this food imply or what is the story of this food? Where did it come from and how does that affect our mission? Our global mission, our mutual mission to mitigate the risk of global warming and exhausting our natural resources, like your clothes, like your food, whatever you do, whatever you consume in this life that you got, you need to think about your children. If you care about your children, you need to be more aware about how you consume your electricity, how you consume your fuel, how you consume your food, how you consume your clothes. All these are awareness.
I guess it's partly the job of the energy sector and government and regulators. But it's partly the job of your sales force, you and your company.
Never, never, never. We are promoting our technology in front of regulators to show them, hey, this is good. I mean, this is clean, but water, this is a change phase of water. It can't be bad for anyone. Choose water. We say be water. Like Bruce Lee, the famous Bruce Lee said, be water, my friend. We believe in water. In general, we believe in water. But other than that, our target, I think, shouldn't be the regulators or the government or the politicians. And let's be honest about it. We don't have many leaders, real leaders, so we should address ourselves. We are the leader of the future. And as parents to children, we should ease down this terrible wrongdoing we have been undergoing in the last 100, 200 years of industrial revolution. We need to go into the third revolution, which is the environmental revolution. This is time to be concerned about the future. They do solution in capitalism, trying to manifest the present while consuming. We need to start to think about the future.
I really like your answer because too many people I speak with will answer, oh, we need the regulations, we need policy, we need incentives. I like your answer because no, it's you, it's your company, it's your sales force. It's up to you to create the future. So, Yaron, we better leave it there. Time has got the better of us. But that's been a fascinating insight into a number of things for me: into the technology, into how you've developed that in a way that will be fit into buildings in a flexible way, into how you're developing your business and your mindset about going where the demand is. California, in this case, getting installations in building a sales force. So fascinating discussion. I wish you and Nostromo and anyone else involved in storage for buildings the best of luck and success in the next year. Thank you very much.
Thank you very much. Thank you very much. I'll just wish for your listeners, if you're sad, you should try lithium. But if you're happy, try water. Water will always be a better...
Well that quote will stick into people's heads. Yaron, thanks very much.
Thank you very much.
Thanks, as always to everyone for listening. We hope that gave you some interesting insight into energy storage through the format of water in buildings and what Yaron and Nostromo are trying to do. And look forward to welcoming you back to the episode next week. Thanks very much and goodbye.
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