MSU Research Foundation Podcast

Commercializing Clean Energy Storage with James Klausner

• MSU Research Foundation • Season 1 • Episode 3

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In this episode we talk with James Klausner, professor of mechanical engineering at Michigan State University and co-founder of Redoxblox, a startup developing thermochemical energy storage solutions. James shares his journey from academic research to entrepreneurship, discussing how his work in energy storage led to the founding of Redoxblox and its mission to decarbonize industrial heat. They explore the challenges of commercializing university research, the role of venture capital in deep-tech startups, and why Redoxblox’s technology is poised to compete with natural gas for industrial heating applications. James also reflects on building a business model that remains independent of government subsidies and how strategic investors play a critical role in scaling the company. This episode highlights the intersection of research, commercialization, and the drive to make a lasting impact on the energy sector.

Host: David Washburn
Guest: James Klausner, Co-founder of Redoxblox and Professor at Michigan State University
Producers: Jenna McNamara and Doug Snitgen
Music: "Devil on Your Shoulder" by Will Harrison, licensed via Epidemic Sound

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David Washburn:

This was my conversation with Professor James Klausner. Dr. Klausner is a professor of mechanical engineering at Michigan State and works in the area of thermochemical energy storage. He has started a company called Redoxb locks.

David Washburn:

In and in conversation, our conversation we talked about his product and his technology, the energy storage sectors where the products are geared towards, and we also covered how he thinks about building a value proposition for the company for the long

David Washburn:

term. So I hope episode— this episode. I've really

David Washburn:

enjoyed my

David Washburn:

time.

David Washburn:

Okay, and we're underway. So today I'm . talking with Professor James Klausner. Dr Klausner is a professor of mechanical engineering at Michigan State University and works in the area of thermochemical energy storage, energy efficient manufacturing and thermal management for energy efficient processes, amongst other things. Prior to Michigan State, dr Klausner spent nearly 25 years at the University of Florida and was also a program director at ARPA-E. He's also an entrepreneur commercializing technologies that he's been working on over his career at Florida and now at Michigan State. So great to see you, James james.

James Klausner:

Yeah, Dave, thanks so much and really pleasure to join you on this podcast.

David Washburn:

Your research is broad and your contributions are many Hundreds and hundreds of papers and advancements in your area of sort of heat transfer systems, if I can use that broadly. But what I'm excited about is that you've sort of followed up your scientific contributions in a very applied way and that's evident in your deep desire to bring your technologies to market. So, as a faculty member, where does that come from to do a startup?

James Klausner:

Sure. So I would say that in my career, very fundamental type research, with that I'm an engineer and so there are applications for what I was doing at the fundamental level. But you really it's tough to see your work actually being used by the industrial sector and you really don't know whether you're making impact or not. But you know, when you start doing applied research you can see right away whether there's value and whether you're going to have impact. And you know, as I progressed through my career, you know I had this itch I want to make a big impact with what I'm doing. And you know, use my creativity and creativity of the people around me to, you know, make a difference. And that's sort of what brought me into the entrepreneurial realm.

David Washburn:

In the world of university licensing and tech transfer, there's typically two paths. There's sort of get your patents and license them off to a company, or doing a startup. Did you always believe that a startup would be the eventual route that you would take to bring these things to market? Had you ever considered the former?

James Klausner:

Sure, you know, having been involved with writing patents and intellectual property, I sort of saw you know university patents in two different ways. One is in the biological sciences, and in the biological sciences there's huge payback and companies are willing to take risk and go in and grab that intellectual property and try and develop it. And it may or may not work out, but because there's such a high payback potential they're willing to take that risk. In the physical sciences it's quite a bit different. The industrial community is a lot less risk averse. Industrial community is a lot less risk averse and it really takes venture capital in the physical sciences to bring things to market. I think, and so I knew, that if we were going to spin out our technology into the private sector, we would need to have access to venture capital to the private sector. We would need to have access to venture capital. In venture capital they want the innovators involved with the company if they're going to turn over their funds and take risk. In the physical sciences.

David Washburn:

Yeah, I totally agree and I think you're right. It's not sort of hand it over and see where it can go. You have to stay with it because it's a long game for sure. Well, you've started a company, and some of the intellectual property that you developed over the course of your time at the University of Florida and at Michigan State was patented and licensed into the company, amongst other ideas that the company has, and you are building a new class of thermochemical energy storage systems, and so I wondered if you could take a couple minutes and give the elevator pitch on that, on what you're building and why it matters.

James Klausner:

Sure. So what we do is we store energy, and the way we do that is we have developed a metal oxide material that, when you heat it to a high enough as opposed to an electrochemical battery that most people are used to for energy storage that basically store charge. So we don't store charge, but we store energy potential and we get it back as heat. So that opens up two different opportunities for us in the clean tech market. One is decarbonization of industrial heat, or doing long duration energy storage for the grid. Now what's unique about what we do is we get what comes out of our energy storage module is very hot air. It's on the order of 1500 degrees Celsius and that has a similar temperature as gas that would come out of a combustor if you were burning natural gas. So we can directly replace natural gas with what comes out of our energy storage unit. Well, what that does is we can use electricity, convert it to heat, store that and deliver hot air to replace natural gas, natural gas, and so if our electricity is renewable electricity, in other words, produced with zero carbon, then we deliver zero carbon heat, and it's a decarbonization strategy.

James Klausner:

What is really interesting about storage is it shifts the time value of energy. So because renewable generation is highly variable, in many markets there's variable pricing. Sometimes the price of electricity will go negative where there's too much generation and we can charge our unit very quickly. So when electricity prices get very low we grab that energy, store it and then we can deliver it 24-7 to a customer as high-temperature heat to replace natural gas. And because of that variability and time value of energy we can compete directly with natural gas and actually provide lower cost energy or lower cost heat than natural gas combustion might provide. So that doesn't work in all markets but there are certain markets where it's very compelling.

David Washburn:

And so does that mean there's sort of a geographical sort of angle to this. Is that what you meant by sort of markets, or do you mean the sort of energy grid or industrial?

James Klausner:

heating markets.

James Klausner:

The grid and access to the grid is highly geographical. The grid and access to the grid is highly geographical. So there are some markets, like California, where you can get access to the wholesale market and get time of day pricing. New York is another market where you can do that. Oddly enough, texas is a market where you can do that as well. But there's a lot of geographical markets where the market, the grid, is regulated and you don't have access to wholesale prices. Europe is, you know, has a. Anybody can get access to wholesale prices when accessing the grid, and so Europe is a very good market for us in terms of access to those wholesale prices. Oddly enough, michigan has a lot of wind energy, especially up in the Michigan Thumb.

James Klausner:

Michigan has a lot of wind energy, especially up in the Michigan Thumb and Michigan. Actually, we can get access to wholesale markets as well, so Michigan's a good market for us too Good.

David Washburn:

Okay, so the device is a how big is it? And so it's a container, right and you and it's got to be able to accommodate very high heat. It sounds like.

James Klausner:

Sure. So to give you a flavor of the energy density in a 40-foot shipping container, we would pack our energy storage material and all our balance of plant in that 40 foot shipping container and that would hold a capacity of about 20 megawatt hours. Okay, um, yeah and um okay, and that and that and that one, so 20 megawatt hours can deliver. Basically one megawatt for 20 hours. Now, if we wanted to get higher capacity, we have a modular approach. We stack shipping containers together to get higher capacity.

David Washburn:

Okay, the secret sauce then. Then is this material? Yeah, is it the? It's cheap and abundant. It's the magnesium manganese oxide. Is that the material?

James Klausner:

And our starting constituents are magnesium oxide and manganese oxide, which are both earth abundant materials, and there's supply chains all over the world for that material.

David Washburn:

And so that provides us a way to build our energy storage modules at low cost. And how long does that last inside the module? Can they sort of be used for sort of lots of cycles? Do they have to be swapped out eventually, or is it too early to sort of tell?

James Klausner:

It's a great question. You know, what makes this material really unique is that it is able to go through many cycles and not degrade, in terms of its reversibility of the chemical reaction, and so so far we've tested it through a thousand cycles with no loss of storage capacity. So that's about three years of daily cycling. Wow, in our economic modeling we assumed that we would change the material out once every five years, so we would do maintenance on the unit and go in, pull out the material, reprocess it and put in new material. So one nice thing about the material is that it's very easy to recycle and reuse, and so we would just reprocess it and reuse it.

David Washburn:

And I think it's the if I'm not mistaken, I think it's the, if I'm not mistaken sort of molten salts are the sort of, I guess, flavor of the day, if you will, for these sort of energy storage materials. How does yours compare to molten salts, for example?

James Klausner:

Sure. So molten salt has an energy density of about 700 megajoules per meter cubed. Okay, ours has an energy density on the order of about 2400 megajoules per meter cubed, so it's about three times the energy density as molten salt, or consumes three times less volume. Molten salt is constrained to about 700 degrees Celsius. We go up to close to 1500 degrees Celsius, so it's just a whole, nother class of storage. But you're right, molten salt is sort of the state of the art at the moment for high temperature energy storage. There are other companies working on, you know, high temperature energy storage. There are other companies working on, you know, high temperature energy storage for industrial heat applications, and there's various approaches to that. I think what's unique about what we do is high temperature, high energy density and ability to fast charge, and the fast charge ability is a really important one because that provides the opportunity to compete with natural gas.

David Washburn:

Are there any sort of early pilots or installations that Redox Blocks has in place that you can talk about today?

James Klausner:

Well, we have a number of prototypes that we've done. We've done some testing in Bend, oregon up to 100 kilowatt hour prototype. Now we have recently we're just finishing another prototype that'll look a lot more like our 20 megawatt hour product that's in Anaheim, california, and that'll be tested in Anaheim at one of our partner sites. But our first 20 megawatt hour installation will be in a Dow Chemical facility in West Virginia in 2026.

David Washburn:

Oh, fantastic, Excellent. Well, let's talk about the company. I think the company's. How old is it? Where is it based? Where is your team? How many are on your team?

James Klausner:

There's basically five co-founders. All of us were working together at Michigan State University on an ARPA-E grant for long duration energy storage, and so the core technology was sort of driven through this Department of Energy ARPA-E grant E Brandt and so co-founders Dr Petrasch was a former professor at Michigan State, and then Calvin Randher and Nima Ramashian were postdocs working on the project and Alessandra Bowe, another co-founder, was a PhD student working on the project. The company was founded really at the beginning of 2021. And it was founded with a convertible note from Breakthrough Energy Ventures and we kept the company as Our headquarters were at MSU Innovations, and MSU Innovations was really helpful for us and gave us the start to get the company launched, and so that was a great asset that we have on campus, and I would encourage everybody who's thinking about doing something similar to visit the Innovation Center, because they can be a great help. And so we stayed there until mid-2022, so about a year and a half. And then At that time we decide, ok, we need to get some Series A funding and over the course of you know, we got our Series A funding was in two tranches. It was first a $7 million round with Coastal Ventures and Breakthrough Energy Ventures. And then we did the second tranche of our Series A. We just completed. That recently was $30 million, $30 million plus round and then it's about a total of $40 million for our Series A funding.

James Klausner:

We moved the company to San Diego for various reasons. You know. Typically they'll tell you. You know where you locate your company. You want to be proximity to investors, proximity to market and where you can recruit strong talent. And you know our big investors are in California. California is a first market, we think in the US, and you know San Diego is a great draw. We can draw people from all over the country. A great draw. We can draw people from all over the country. And that's one thing I will say is I've spent a lot of time interacting with Silicon Valley VCs and there's really a bias towards everything in Silicon Valley, but what I keep telling them is there's smart people all over the country. You just got to go look. And that's our philosophy and it's worked really well for us.

David Washburn:

That's great. Well, congratulations on both phases of the Series A. It's just huge to get those kind of you know high-profile investors with such important you know partners and serious track records, and I think it's just fantastic and you know in full disclosure our organization, the MSU Research Foundation. We were a very small investor but we were able to participate in some of these rounds as well, so we're aligned with you on all of this and very excited about your prospects going forward. Forward. At the risk of, you know, not getting too political, but I'm curious if the election returns has any impact on your industry and, specifically, does it cause you to rethink any of your strategies, given the most recent national elections?

James Klausner:

So let me ask you a question by giving a little bit of advice. You're sort of driven by funding opportunities based on national priorities that basically sometimes are politically driven, but those priorities are. So you start, you get this mentality that, oh, if I solve this problem, there's this huge market out there.

James Klausner:

And then once you get out of the university and you get into reality, you realize that the market may not be what you think it is think it is, and one of my earliest conversations was a company that was super excited about Redox Blocks technology and you know we started getting into the details of what the value proposition might be for them. And the value proposition in that sector where they were, didn't quite work out favorably compared to just doing the status quo of burning natural gas and the sustainability officers who I was working with at the company said James. Officers who I was working with at the company said James, I report to my board of directors. My board of directors will not let me install a new technology or spend capital expenditures.

James Klausner:

That's going to cost us more money. It's got to be less, and that was a wake up call for me. And you know, at that point we decided, you know what we need to have a value business proposition that is completely independent of political considerations. So we wanted to have, whether there's subsidies or no subsidies if there's subsidies, great, but we're not going to rely on subsidies because we recognize that political forces continually are changing and you can't rely on them, and so we're not reliant on the goodwill of yes, we want to do something about the climate. We're relying on hey, we have a business proposition that you can save money and do something about the climate and provide good environmental stewardship, and that's a message that resonates very well, and so I think we're in good shape, regardless of what political considerations are currently at play.

David Washburn:

I love it, that, I'd love that answer and and I think that's Redoxb locks right, the right mindset that you all have, and perhaps, perhaps, and perhaps your investors have sort of helped you along those lines and that's great and you're sort of prepped for all environments and focused on value proposition.

James Klausner:

www. redoxblocks. com to say something about investors, we cannot underestimate the value that good investors have for us, because they have networks, they have resources that they can tap into, they can help you out, and our investors have been an invaluable resource for us, including MSU Research Foundation, and I would say that getting the right group of investors is every bit as important as the amount of capital that they provide. The amount of capital that they provide and even on our cap table, we have minority investors that are just super helpful for us and we have a great relationship with them. And as we go into the future, eventually we're going to have to do a Series B round and raise more money as we scale up to manufacturing capacity. And having all of these investors involved, who are excited about the technology and excited about what we can do, want to make a difference, want to have impact, just like us, that's value in itself.

David Washburn:

That's great. Our guest today has been Dr James Klausner, the co-founder of Redox Blocks. What is the URL for your company?

James Klausner:

www. redoxblocks. com

David Washburn:

Awesome! The company's developing thermochemical energy storage systems. It's so great to visit with you today and, of course, the foundation is in your corner. We wish you all the success in this crazy startup endeavor that you've taken on, and thanks for being with us.

James Klausner:

Yep and David, thank you. I'll also note that MSU Research Foundation provided me a professorship when I first came to Michigan State University. We really appreciate your leadership. Go green.

David Washburn:

Go white. Yeah, thank you very much.

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