Revolutionizing Thermal Energy Storage with Martin Schichtel - E133

 In this episode, Martin Schichtel, Founder and CEO of Kraftblock, shares his career journey and insights into the thermal energy storage sector.

The conversation covers:

• The pivotal moment in 2008 that sparked the idea for Kraftblock, leading to the development of a superior thermal energy storage material.
• Discussing the waste heat recovery market and the importance of decarbonizing heat in various industries.
• Kraftblock's approach to targeting direct industrial customers and collaborating with EPCs and ESCOs for comprehensive solutions.
• Highlighting notable Kraftblock projects and the future vision for the company. 

Looking ahead, the podcast will release new episodes every other week. The hosts invite listeners to provide feedback and suggest future guests, reinforcing their commitment to staying connected with the clean energy community.

Check out Kraftblock at https://www.kraftblock.com/. 

Tune in now for an inspiring conversation on the future of energy storage!

Paces helps developers find and evaluate the sites most suitable for renewable development. Interested in a call with James, CEO @ Paces?

Paces helps developers find and evaluate the sites most suitable for renewable development. Interested in a call with James, CEO @ Paces?

Transcript

00:02.21

James McWalter

Hello today we're speaking with Martin Chiktel, founder and CEO at Kraftblock. Welcome to podcast Martin.

00:07.50

Martin Schichtel

Yeah, thanks for having me.

00:09.42

James McWalter

Brilliant. I guess to start, could you tell us a little bit about yourself, and I guess, all the way up to the founding story of Kraftblock.

00:16.57

Martin Schichtel

In this case, we and we need a bit of time because it was not just kick, there is the idea, right? The spark of the idea.

00:20.79

James McWalter

yes

00:22.02

Martin Schichtel

It's a longer story behind. So ah basically, I was always pretty curious. That's why I was was studying chemistry. I want to figure out how everything is working. And going my pathway in the career, I spent most time of my career somewhere in selling high tech ceramic coatings to steel glass ceramics industry. So pretty familiar with high temperature processes, waste heat, and also ah potentials to to to do kind of energy recovery and um reduce primary energies, ah but that was always a little bit near under-conscious. I never thought about it, right? I have seen it, so why does nobody use this energy? But I didn't make up my mind about that. ah Then it was, wow, in 2008 I saw a TV report in Germany about a heat storage made of concrete.

01:11.90

Martin Schichtel

And they said, well, that's a high temperature energy storage, ah perfectly developed for concentrated solar power. And they were talking about 500 degrees C. ah if you are working in the steel industry, that it's not high temperature, that's warm up temperature, right? It's very low end of the temperature. So out of curiosity, I just call the developers and say, why are you limited to 500? Why can't you go to 1300, like 2600 degree Fahrenheit, right? And they say, well, we are limited with the storage material. Concrete is not able to take that chance to to go to those high temperatures.

01:48.72

Martin Schichtel

And at that point in time, it was more or less a scientific challenge how to improve concrete for a broader temperature range, better storage capacity and so on, um which took a couple of years, right? Just typical scientific approach, looking for literature, what is the problem? What was the issue issue ah the the different steps to solve it? Why isn't it solved today? And a few years later, I ended up with a, yeah, let's say an alternative to concrete.

02:15.97

Martin Schichtel

which sounded to be very interesting. And actually, that was the point in time when I started looking to the market for thermal energy storages. What were they used about? What is the future of thermal energy storages? And I found it more and more interesting starting from concentrated solar power or process heat, maybe even power to power application. And that finally was the kick, the kick off to build KraftBlock.

02:40.56

James McWalter

Very interesting. And so I guess, you know, thinking about first on the kind of market opportunity. um Can you guys speak to, you know, how, where is the kind of this kind of you know waste heat going today?

02:52.96

James McWalter

What are the type of industry processes or other processes that are going to be utilized?

02:56.63

Martin Schichtel

Yeah,

02:57.15

James McWalter

And how big is that as a market?

02:59.79

Martin Schichtel

yeah the the amazing part of the story is that usually the heat demand of um of a country is more than 50% of the overall energy demand compared to electricity, which is roughly 30 to 40%, and the rest is fuels that are getting used. So um it's more or less a low-brainer to say, well, if you decarbonize heat, we make a huge step in our race against climate change, right?

03:21.89

Martin Schichtel

um One first obstacle could be wasted recovery because if you think of steel industry flare gas is going just into the atmosphere pure at the energy into the atmosphere it's crazy right so why not recover it take it back to the process and say for example coke or gas in this process.

03:37.67

Martin Schichtel

But you also have the chance to use the green electron, convert it to heat and use that type of heat in different processes. Amazingly is that there are industries you never would expect heat would play a ah major role, could be food industry like ah even yogurt or milk production.

03:56.53

Martin Schichtel

could be in high temperature industry like calzinus in the aluminum production or steel ah plus those in the steel industry so the pretty broad spectrum which is mainly let's say 60 percent of the heat is below 500 degrees c in industries and the rest is higher than 500 degrees c but is that exactly that um spread which is higher ah accounts for roughly 70% of the emissions in that sector. And that's why it's interesting to tackle this issue either from the waste-seized perspective or from the renewables perspective.

04:31.61

James McWalter

And then I guess, you know, what is the, what is the Kraftblock product?

04:36.89

Martin Schichtel

Yeah. Graphlog is a product we specially developed to decarbonize process heat and of course also increase the efficiency of different systems. Our vehicle to do this is what we call a thermal energy storage platform. So we can really charge it up to 1300 degrees C, 2600 degree Fahrenheit as a maximum level at the moment. We could go higher, but most of the applications are below the temperature range.

05:01.56

Martin Schichtel

And we couple that storage unit with a charging device and a discharging device. And that's why we are pretty flexible in the design to say, well, let's waste heat recovery or power to heat and use the electron. And on the downstream side, on the discharging side, it's just a question, what is the type of energy the customer needs? Do they want to go for steam? Do they want to go for thermal oil, for hot air reallification? That's pretty open, right? And that's the flexibility in the design um that we offer to the market. And ah so we can tackle various um issues with one single storage product.

05:36.08

James McWalter

And I guess we're just to kind of get a sense of scale, um you know, and I guess how much is it as a system?

05:39.63

Martin Schichtel

o

05:43.49

James McWalter

You know, if I wanted to get to a few megawatts and above, is that possible with the system?

05:45.33

Martin Schichtel

Yes.

05:49.15

Martin Schichtel

yes Actually, we are aiming for megawatts or gigawatt hour scales. At the moment, it's more megawatt hour scale because the market is pretty young in this sector. But there's a very or strongly growing demand for thermal energy storages. um Our systems are designed for industrial use. So we didn't design it for private homes, which could also make sense. But our intention was say, well, if I'm able to support one corporate, one industrial side with a type of device,

06:19.00

Martin Schichtel

I would have to cover four, maybe 8,000 private homes to have the same effect, to have the same impact. And that's why we said. First, let's target the industries, and then we might have a look to the private sector as well. And as for those industries, our storage is built in a modular way. So we are begging on 10-foot, 20-foot, 40-foot containers. We have our own container design, so we're not using the typical transport containers. But this um format to this dimensions are ideal, I guess, because you have a kind of building block system like ego blocks. You can stack 10-foot, 20-foot container together to large scale solutions.

06:55.46

Martin Schichtel

and And which is very important, you can easily transport it by each truck, by each train and each ship, so you do not need any special transports to to to get it to the site, to the customer as well. So you also have, ah let's say, a more ah closer approach to the market and to your customer ah with that system as well.

07:14.49

Martin Schichtel

If we are taking a look to the typical container, which is a 20-foot system, at 1,000 degrees C, we can roughly store 12 megawatt hours of heat capacity in this device. right And if you say, well, Martin, I would have a need of 200 megawatt hours, ah then we would stack. OK, 200 by 12 is a little bit complicated. Let's do 200 megawatt hour by 10. So we would use 20 of those containers and build them together to the scaled system. And that's the approach that we are taking.

07:44.94

James McWalter

And so I guess, are you typically um we going directly to the the owner of the steel mill who have multiple sites, um or I guess like who's the end kind of customer that you're targeting to that?

07:58.78

Martin Schichtel

We have different approaches to the market. We are targeting direct customers, that which could indeed be the steel the industry directly, a steel side. But we are also operating together with EPC or other ESCOs, for example, to take the product to the customer so they can offer a whole or a fully but full solution to their customer, including, for example, also renewable PPAs towards the customer, ah in this case, which makes sense ah perfectly well for us.

08:27.08

Martin Schichtel

and For Kraftbach itself, it's just important that products like Kraftbach come into the play and help to to have this impact we want to have. So the distribution channel is pretty open to us.

08:38.70

James McWalter

And so I guess, you know, I think folks are very familiar with certain types of storage technologies, right? Like with AMI and being the most classic one, you also have some kind of new kind of emergent ones, like, um you know, iron oxide, what form is doing and and some other folks.

08:43.52

Martin Schichtel

Yeah.

08:50.22

Martin Schichtel

Mm-hmm.

08:52.90

James McWalter

um and I think like a lot of folks are kind of like trying to figure out a duration, right? But the mind is very, very very good on a four hour duration. um But there's a lot of ah constraints with a four to eight hour ah duration compared to some other use cases.

09:00.53

Martin Schichtel

Absolutely.

09:06.46

James McWalter

I guess, how do you think about the differentiation between these other cons storage types?

09:10.86

Martin Schichtel

Yeah. um The lithium battery system, in our opinion, is perfectly fine for um low capacities. So I'm not talking about 200 megawatt hours, 500 megawatt hour, 1 gigawatt hour, because it's also a question of the capex you have to invest, and especially on how often you can cycle it. right So the batteries are limited to 4,000 to 6,000 cycles.

09:34.49

Martin Schichtel

thermal storage, especially our system, ah can act for more than 15,000 cycles. So while our system still would operate, you would have to replace the batteries a second time, right which is exploding the capex at the end. um But it's a question of what you need. right If you say you need electricity, the battery storage is of course um the best option in a different scale, right? Because electricity in, electricity out, you just turn the switch and that's it. If you want to do this with a thermal storage, it's possible. You convert electricity to heat, you store the heat and then you use a steam turbine or something else to generate electricity again.

10:12.47

Martin Schichtel

um But the efficiency is much lower. So, I mean, there are business models where you would do it. If you would say we go for capacity storages. So thinking about storage capacity like 5 gigawatt hour, 10 gigawatt hours, because then the thermal storage is unbeatable in the price and the costs for the storage. storage So it's a cheap capacity storage. storage ah That's also um shown in different studies from McKinsey, EY, Berger, and other the big consultancy agency.

10:40.89

Martin Schichtel

which ah think that thermal storages would have a market share of 8 to 10% in 2050 to store electricity, right, and store it and release electricity again, but also about still storing that thermal energy.

10:55.27

Martin Schichtel

If you are taking a closer look to process heat, then the the wind is definitely on the thermal energy storage because you have the better capex, you have the better storage capacity, you have exactly the heat as or the energy type you need, heat, so you needn't ah convert it in a second space in the second stage. And that's exactly what you mentioned.

11:16.29

Martin Schichtel

At the end, it's a long-duration energy storage, because we can discharge for 8 hours, for 10 hours, for 12 hours. Depends a little bit on the design, even for a longer ah period in time. So especially if we are taking a look to process heats higher than, let's say, 200 degrees C below that, heat pumps could be an alternative in combination with battery storages. But if you have a steam demand at 250 degrees C or 300 degrees C, no way to go with the first option. right and the ah combination battery storage and ah direct steam generator, direct electrification for the steam could also work but is um roughly 30-40% more expensive than converting heat storage in a thermal storage and discharge steam from the thermal storage.

12:03.73

Martin Schichtel

Again, coming back to the CapEx OpEx and also

12:05.03

James McWalter

Yeah.

12:07.89

Martin Schichtel

but One argument for some customers is we are familiar with heat. We are not familiar with electricity. So it's better for us to handle the heat instead of the electron.

12:15.83

James McWalter

That makes no sense. Yeah, I guess then just like in terms of you know the the ah the material, of the substrate itself. um And so you you know you mentioned a little bit about the kind of pathway to comparing this to concrete.

12:29.68

James McWalter

um how that has all these kind of various limitations, especially at higher temperatures.

12:29.73

Martin Schichtel

Yep.

12:33.77

James McWalter

um I guess you've got to dive a little bit deeper on like the the specific kind of differentiation of like the the material that you guys have produced and how that maybe compares to what was going on before or even what other folks have been trying to develop themselves.

12:34.03

Martin Schichtel

yep

12:49.95

Martin Schichtel

Yeah, happy to elaborate on this. um What was our approach ah for this storage material? when When I took a look to the market, what materials are available to store thermal energy, to store heat? ah I think the most modern I found is the solar salt used in concentrated solar power plants. right Since the 1980s in California, the first plant was installed. They are using molten salt to store heat.

13:14.51

Martin Schichtel

um which is a kind of artificially developed storage material. All other materials that we have seen in the market are just nature-based sand, gravel, volcanic rock, magnetite, things you found in nature. And there are only a few artificial materials like refractory bricks, magnesium bricks, aluminium bricks to store earth thermal energy.

13:34.31

Martin Schichtel

But they were not really developed um as a heat storage material. But it was more by chance that you found out good capacity and nice conductivity so you can use it to store heat.

13:46.00

Martin Schichtel

um But it's not the optimum combination of exactly both properties, heat capacity. So how much energy can I store ah in the cubic meter and the heat conductivity? How fast can I charge and discharge this storage material? So this was the first hypothesis from our side to say, can we develop a material where we have the full control over both properties? And the second one was,

14:12.16

Martin Schichtel

Can we develop a material that really is fully sustainable? but So thinking in terms of LCA life cycle assessment, where's the materials coming from, where it's going to cradle to crave ah solutions as well. um And that was the base to think about the storage material. Means at the moment, we are using up to 85% of recycled materials like steel, slag, waste of the box set production, waste of copper production, things that are usually going to disposal sites. So we try to take them back to circular economy And those materials do have an excellent heat capacity, but a low heat conductivity. So we add another material, it's called a binder, which is also known since decades, which has the conductivity. And now if I change the ratio between both materials, I can improve the heat conductivity because I use more binder, or I can increase the heat capacity and the storage duration because I use less binder. And it's basically

15:08.98

Martin Schichtel

the simple basis of what we are doing. right There's a lot of chemistry behind on how we do it because, for example, at the end what we produce is a ceramic material. But we generate this material at room temperature. We do not need any furnace, any oven, no calcination, no sintering process. We just do it by room temperature. And that's, let's say, the smartness, the intelligence behind this storage material.

15:36.86

James McWalter

Makes sense.

15:36.85

Martin Schichtel

and if like

15:37.69

James McWalter

Yeah, got it.

15:40.27

Martin Schichtel

Now, just if if I compare it to, let's say, the state of the art, what is possible in the market, um we have identified, let's say, one characteristic that we ah usually use to compare the materials, which is the materials efficiency. Sounds a bit strange because it's not a common term.

15:59.96

Martin Schichtel

but Material efficiency means um if you have ah a defined volume of material, you charge it and you discharge it, how much of this volume do you use to store the energy and how much is just lost volume because the heat never can penetrate in that depth or come come into the core of the material itself.

16:22.23

Martin Schichtel

um And we see that state of the art materials has an efficiency, materials efficiency between 60 and 70%. So 30% of the material are just ah wasted space, if you like so. And our material uses 100% means the core of the material heats as fast as the shell of the material heats. And that's why we're using the full capacity, the full volume of the storage material, which of course results in smaller and more compact storages with a higher efficiency.

16:51.92

James McWalter

Amazing, yeah. I guess like because one of the kind of challenges with a lot of these systems, especially depending on how a particular you know project gets developed, is sometimes you have some severe space constraints, right?

17:03.61

James McWalter

You might have to be navigating you know a side lot off like a you know manufacturing plant to be able to, you know so density does become important.

17:05.74

Martin Schichtel

Yeah.

17:14.25

James McWalter

Whereas if you're kind of doing conventional you know energy storage for a pure play electrical system, um if that's like, have a big field somewhere, you don't have maybe two have to worry about energy to quite the same way. I was actually looking through some of the kind of projects that you have been working on over the last last while on your website. um I guess it would be great to kind of get into a little bit of depth on you know maybe one of the projects that you guys have worked on recently that you're particularly proud of.

17:46.14

Martin Schichtel

What, what we are proud of.

17:47.80

James McWalter

Yeah, just an example, one of the example projects um that you guys in terms of ah that you've had that you've already deployed that you're particularly proud, interesting or proud of.

17:48.15

Martin Schichtel

but Oh yeah. So. but Yes. Yeah, ah actually being proud of it it' is a little bit like like having a baby and growing this baby.

18:02.44

Martin Schichtel

So you're proud of each project, even if it's a very small one.

18:04.75

James McWalter

They're all unique to their own way.

18:05.64

Martin Schichtel

But so each actually, exactly each step counts, right? and And I think we are basically proud of ah our latest projects, one, the steel industry for waste heat recovery, because there we can have really a major impact to support the steel mills to reduce carbon dioxide, save costs, increase efficiency.

18:25.16

Martin Schichtel

um but especially to the electrified thermal storage system ah that we deployed for for PepsiCo in in Netherlands, in ah in Europe, because there we fully replace gas fired systems against the renewable electricity, right? And that's this full decarbonization, that's a future proof system. And that's a kind of, how to say, a a basic system that you can do copy paste to various industries. And in our situation, it's just important to prove that there is a technology. The technology is working perfectly fine. Customer is happy with this technology to showcase it because then it's easier to attract the other customers. say Okay. I'm not the first mover ah in this case. There is already an installation. Everybody's happy with it. So let's proceed. And that's why let's say both latest approaches are extremely important to us.

19:24.00

James McWalter

That makes no sense. And I guess, you know, as you're kind of like thinking kind of from here, I guess what what are some of the next steps you're trying to do as a company? You know, I know you've youve run you raised some some central capital recently.

19:32.44

Martin Schichtel

yeah

19:36.01

James McWalter

I guess like what's the kind of next one to two years look like for you guys?

19:39.77

Martin Schichtel

Yeah, next one to two years is um scaling. um Pretty fast, if possible, right? So ah with the last latest funding around, ah we build the backbone of the company so that we are fully prepared for the growth phase right now, means organizing partnerships for to produce the storage, to integrate the storages, building the um ah sales network, business development behind, also going more international. So we are doing our first steps in the US as well, talking to a couple of customers that are interesting to interested to use this solution.

20:15.82

Martin Schichtel

especially the electrified solution for this market because so um This can and will solve a couple of problems also for the DSOs or the TSOs at the end because we can can reduce a grid congestion and related costs to this using this type of storage which makes it again because of a better pricing more attractive to the customer to use an electrified thermal storage to have a reliable green heat supply ah in their systems. And that's actually what we are heading for. So our goal basically is

20:46.74

Martin Schichtel

within the next two years that we at at least execute minimum one to two projects on each continent in the main mainly industrial nations at the moment. And that's where the whole team is going full steam.

21:00.80

James McWalter

Yeah, it's on that kind of point around the grid, I was actually talking to one of the big utilities in the northeast of the United States, and they're trying to figure out, you know we're moving you know they're as folks are moving off you know from natural gas, looking at potential electrification and so on, um a lot of the kind of required grid infrastructure, especially in more urban or downtown areas, just isn't there to support.

21:17.41

Martin Schichtel

ah

21:22.10

James McWalter

You're not going to build a brand new substation in downtown ah Rhode Island or New York or or Massachusetts and so on. um And so one of the things they're trying to figure out, especially in colder climates in the United States, and I'm sure this is true in Europe as well, is as we move from ah peak load occurring in summer with air conditioning and moving it to winter um as more parts of the of heating we gets electrified, um there's a lot of kind of challenges associated with the grid build-out for those.

21:46.22

Martin Schichtel

and

21:49.40

Martin Schichtel

Yeah, definite definitely. And especially, in the let's say, in the industrial scale, you can use this type of storage just as a resistance in the grid, if there is excess production.

22:00.18

Martin Schichtel

You can take it and use it at each point in time you have a what life to do. And there are a couple of business models where exactly those types of companies, customers actually get paid ah to have this resistance in the grid. So they get paid for having the resistance, but they can use the energy for their own purposes, which is a win-win situation for all of the parties.

22:22.92

James McWalter

And I guess like thinking kind of a little bit broader over the next few years, how do you think like the overall market for this type of solution will kind of continue to evolve?

22:31.15

Martin Schichtel

yeah So basic basically at the moment we are teaming up, especially also with ah PV and wind farm developers, um because it's a perfect combination. right They deliver the green electron, we can deliver the heat also for for industrial parks itself. right if they For example, do we have a steam grid? So we have a a much higher impact.

22:51.39

Martin Schichtel

There's a win-win for both. right they can take They can use our technology to offer through the customer. right We not only can um deploy the green electron ah for your your electric network. We also can deliver heat, which means they could deploy more PVs, for example. PVs sell more capacity to the customer, so makes their business pro on the opposite. We can grow with their business. And the other way around, of course, if we develop a um a site, a location,

23:19.85

Martin Schichtel

We also can go back to our partners and say, well, we need a 20 megawatt wind farm over there or 20 megawatt PV farm over there to supply the customer with ah the green renewable electricity. So we can approach it from two sides. um Then, of course, I said we are teaming up with integrators or EPCs as well, which is a kind of extended sales um to our facilities. And we also from next year on offer contracting heat as a service. So we are doing playing the kind of utility to support both sides as well.

23:56.29

James McWalter

I mean, it sounds like there's both a lot of opportunities on both the behind the meter and the front of the meter perspective.

23:59.81

Martin Schichtel

Yeah.

24:00.55

James McWalter

I guess, like, where do you think, that you know, maybe it's expensive, expensive for a Kraftblock, but I guess for the industry itself, like, how do you think, you know, the bigger opportunity is front of the meter or behind the meter over the next couple of years?

24:12.30

Martin Schichtel

Difficult. um So I would love to see a proof print worldwide, but it's pretty different in each country. And sometimes, I mean, in the US, the wonderful example, ah it's so diversified what what the grid application means. There's not not a fully interconnected grid ah with an energy exchange from north to south or east to west, ah which makes it more um challenging, but also more attractive.

24:37.24

Martin Schichtel

to to use our solutions, right? So we can um you can participate in the energy trade much better. And of course, behind the meter solutions, if we do not have to pay any grid fees, that's perfect because the green electron is not that expensive, right? The most expensive things are all the fees and taxes that are coming on top of it. So if I can use it directly, you can create and also profitability with payback times of two, three years instead of four, five or six years if you you would go for all the fees as well.

25:13.97

James McWalter

Yeah, and one of the things that we're seeing a lot happening in the US, and I think this is happening all over, is like very, very large behind-the-meter things like data centers or advanced manufacturing because the grid timelines are are so constrained to interconnect. And a lot of that is going to be gas combined cycle rather than renewables. And so I think like there's there's something potentially there as you're kind of talking where um yeah I think to get the maximum renewable system or clean system for like a very, very large scale behind the meter processes, um I think folks are going to have to start thinking through more complex product development types, right, which might combine you know battery, like lithium-ion best for certain parts of it.

25:55.21

Martin Schichtel

Yeah.

25:58.48

James McWalter

um But over the night, you know if you're you if you're using a combined solar gas cycle, you know that waste heat could potentially be utilized for over the night in a time frame and it's on.

25:58.95

Martin Schichtel

Absolutely.

26:11.26

Martin Schichtel

Actually, we we love hybrid solutions um because our technology is is one enabler for those hybrid solutions, which means a we see projects also together with heat pumps, but not heat pumps charging our storage.

26:27.67

Martin Schichtel

It's a different use case. It's more the use case like ah this company is just operating five days during the week, shuts down during the weekend, so they have to ramp up the heat pumps on Monday again and ramp it down on Friday, which means they lose efficiency and power in the system.

26:43.36

Martin Schichtel

And for this bridging, they're using still natural gas for their boilers, right? But you could use a small thermal storage to bridge exactly the ramp up and ramp down times because that type of vehicle delivers the heat, the steam immediately, right? You turn it on and it's it's more or less there. So you can can combine both. The storage just for a ramp up and ramp down phase, the heat pumps to supply the constant heat during the week.

27:08.97

Martin Schichtel

You talked about battery storages. We see some developments. but ah That's more mid-term solutions like 5 to 10 years. Also in the electric grid saying let's combine battery storage, just lithium battery storages with a thermal storage integrated in a thermal power plant. So shut down the coal fire plant, replace it by a part, replace it by power to heat and the thermal storage and keep turbine generator on the operation. And the grid access is of course there.

27:39.81

Martin Schichtel

Then you can use the battery system for frequency regulation right so and burn a lot of arbitrage. And the thermal storage is for the capacity of ah responsible for the capacity, so minutes and hourly reserve. And that, for example, is another cool combination where you can make the best of both technologies. And these are the options that we explore also with our partners, of course.

28:02.89

James McWalter

super interesting. I guess one of the questions we always like to ask is do folks ever have like a hot take or, you know, a big view on on the industry that that they're working on? I mean, in this case, it's definitely would be a hot take because of ah the the heat involved in your storage.

28:15.38

Martin Schichtel

Yeah.

28:17.08

James McWalter

But yeah, I guess any hot takes you have, you know, either right now where things are or where things will potentially be in the future.

28:25.15

Martin Schichtel

Yeah, I think at the moment we are on the stage. um the whole industry, right? It's not only Kraftblock, it's it's the whole thermal storage industry, especially the high temperature storage industry, ah where the market is just exploring what options they offer to the market, right? So when I talked to customers, let's say three three years ago, and I was talking about high temperature energy storages, most of them say, wow, beautiful hot water storage, 120 degrees here. Now I'm more thinking like,

28:54.62

Martin Schichtel

800,000 or more, how would you do with it? So the market education was really strongly increased over the last three to four years. So if you take take a look to inbound request, they're much more qualified than two years ago, than three years ago. So industries start understanding now what those types of storages are able to do and how they can help can help them to reach their ESG goals to improve energy efficiency.

29:21.06

Martin Schichtel

in their systems as well to make their sites future-proof. And that's actually my favorite take I do have at the moment. The market knows what those systems are able to do and now we have just to show to the market it is reality. You can use it today, you do not have to wait for another 5, 10, 20 years to have enough hydrogen to achieve pricing, ah to affordable pricing, right? Thermal storages is the technology that is in the market, that is proven in the market, that can be used right now.

29:51.48

James McWalter

ah very yeah yeah and I think the way hydrogen is done, I think it was different to what a lot of folks were expecting, right? And so I think that has definitely like opened up opportunities. um I mean, folks in the US were struggling to make some of the incredibly generous incentives from the inflation reduction act, not work for hydrogen.

30:09.33

James McWalter

ah um That means you know it has nearly every opportunity. And again, i you know I think there's still definitely opportunities for things like hydrogen, but I think it's definitely more constrained than what folks were thinking about a couple years ago. And that definitely does open up some of these opportunities and in kind of other types of technology.

30:24.60

Martin Schichtel

Yeah, I mean, I mean, I actually, I'm a chemist, right? So I love hydrogen and hydrogen for thermal storage is at the end, it's um a competitor. but it is also a chance because when you use hydrogen, you probably also have need for, for example, renewable steam. Think about the chemical industry. Hydrogen has a raw material, green steam delivered by a thermal energy storage because the efficiency is much higher than burning hydrogen to generate steam. So the combination, again, it's a combination of technologies, which fully makes sense, right? And that's the, ah the,

30:58.54

Martin Schichtel

mindset that we do have, right? Try to combine it, try to make the best out of both worlds. um Talking about efficiencies, our our electrified thermal storage from the transformer to steam into the customer system has an average efficiency of 95%.

31:14.58

Martin Schichtel

So we use another 15 to 20% of the European electron to generate the hydrogen, right?

31:19.59

James McWalter

Thank

31:20.80

Martin Schichtel

And even from that stage, it fully makes sense to use thermal storage.

31:26.34

James McWalter

you. agree um Yeah, I guess, before we finish off, it's always kind interesting to, you know, we talked a little bit about your kind of past in in chemistry and how that kind of led you to to starting a Kraftblock. um But I think, you know how folks approach starting and running companies, you know, a lot of the reasons why they run their company or developed a company in a particular way. It comes from lots of combined past experiences. You're obviously building a Kraftblock in Germany and in Europe. I guess, how would you say

31:59.06

James McWalter

the kind of pros and cons of building the company there versus elsewhere, right? And and ways that I've given you, I guess, an unfair advantage to getting the company to where it is right now, but then also other ways that things could actually could be improved to kind of like develop the you know the startup and and technology ecosystem in your area.

32:18.20

Martin Schichtel

um Yeah, that's that's a very good question and a tough question as well. So what is like building a company, building a startup in Germany? I think the main takes we have from and doing this is you learn patience, you learn resilience. And I think one advantage is really that you have a close look to your cash, to your liquidity, right? Because you are not that well-founded, or VCs do not invest that much money in deep tech startups in Germany or in Europe. It's getting better right now, but we are far behind the investments in the US, for example. So we have actually to take a close look on our bank accounts. What do we invest? Where? Why do we invest it? So I would say the um

33:08.46

Martin Schichtel

I hope not to sound very discriminating, but ah the the financial efficiency is much higher because we have to use less money to have the same efforts or the same results that the others have which which are much better funded.

33:20.86

Martin Schichtel

But it's not necessarily a disadvantage, right? You might be slower, of course, um but you also have a different look on the go-to-market strategies. So ideally, we would have offered heat-as-a-service projects from the very first day on. That's not possible. So we needed to sell our systems first, which is really like and the In the early early days, it's like selling an insurance at a house store, right? It's hard to convince the customers. It's the first of its kind, de-risking and all those wonderful arguments you have to find. But you're incredibly proud if you did it, if the customer bought it, if you fulfilled your performance guarantees and you have this proof point in this market, say, well, for the customer-owned system with a full performance that was guaranteed by us, customer is totally happy, um which is pretty different to

34:11.09

Martin Schichtel

the customer just gets his heat for five or let's say 10 US dollar per megawatt hour because can be because of the systems operating can be because of a direct supply of heat because there's enough cheap electricity in the market.

34:26.19

Martin Schichtel

But it's more and that's a big differentiator. Germans are very focused on technical data, right? So less storytelling. But hey, look, these are the data. That's the capacity that's charging. That's the ramp up time, blah, blah, blah, blah, blah, which works perfectly fine in Germany, but not in the rest of the world. So we also had to anticipate um the other mindset as well.

34:46.91

James McWalter

Yeah, I think it's an interesting idea. You know, one thing I've kind of followed my thinking on is whatever, you know, the paces and the previous startups I've worked on, ah wherever something is like super easy, it generally has all these negative issues down the road, right?

35:02.38

James McWalter

Whereas the thing that like, it's just like the very difficult thing that, you know, the the the tough work to get your first five customers, yeah you know, that is where you kind of like learn um the hard truths about how you have to do your go-to-market in a particular way or how you have to like approach things in a particular way.

35:11.78

Martin Schichtel

and

35:17.09

James McWalter

I haven't like kind of, you know, especially, you know, we first raised capital in early 2022. And a lot of my friends had raised capital in 2020 and 2021. And, you know, in a world where it's easier to raise $2 million dollars to get from a venture, you know, venture capitalist in America, versus get one customer to pay you $500 a month, right?

35:37.00

James McWalter

It was like, you know, you get this like massive disconnect. And so I think it's been

35:40.37

Martin Schichtel

hu

35:41.57

James McWalter

you know Obviously, like there's been a lot of you know difficulty and and capital markets have been more constrained over the last few years, and and certainly Europe has more constraints than the United States, just in general. um But I do think that dash kind having to go through those was tough yards and meters in the beginning, I think generally makes you much more likely to be a stable company, especially if you're talking about deep tech.

36:04.57

Martin Schichtel

yeah yeah i I would believe exactly the same, I'm fully right.

36:09.32

James McWalter

but um It's been great, Martin. I really enjoyed the conversation. um Before we finish off, is there anything I should have asked you about but did not?

36:18.75

Martin Schichtel

oh no we ah We talked a little bit about tech, we talked a little bit about the market, we talked a little bit about the setup, where we came from, where we are going to. ah But maybe where we are going to, as I said, we we are in the phase to enter although the US market.

36:35.98

Martin Schichtel

So it's I would love to see, ideally, feedback also from ah from your audience, what they are thinking about this type of technology, and it's it's especially looking for partners in that market as well. It could be from the utility side, could be from the developer side, and just to have a better better access to understand the market much better, to see what is happening, why it's happening, and how we can support it.

37:02.76

James McWalter

Absolutely. We'll include contact details in the show notes for folks if they want to reach out. And as we're talking to our end developer customers, I'm very, very happy to make introductions as we see good fits.

37:13.41

Martin Schichtel

Well, cool.

37:14.25

James McWalter

Thank you so much, partner.

37:15.58

Martin Schichtel

Thank you. Thank you so much. And great questions. I really loved it. Thanks.

37:19.59

James McWalter

Thanks so much.