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Compressed Air Storage: Renewable Energy's Ally
84 Plays1 year ago
We are joined by Matthew Ciardiello, the CEO and co-founder of TerraStor Energy Corporation, a company working in the field of compressed air energy storage (CAES).
Matthew discusses the company's work in developing compressed air energy storage, a technology that provides large-scale energy storage for renewable energy sources.
He also speaks about the challenges and opportunities in the field, his vision for TerraStore, and offers advice for those interested in entering the clean tech sector.
We are excited to delve into the current challenges and opportunities in the energy market that TerraStor is addressing.
🕑 KEY MOMENTS
==================
➜ [00:01:14] The Introduction of Terrastor
➜ [00:03:33] Compressed Air Energy Storage (CAES) Explained
➜ [00:05:46] Inspiration behind Terrastor
➜ [00:11:35] Longer duration storage needs for renewables
➜ [00:11:59] Obstacles and roadblocks in compressed air storage
➜ [00:14:40] Financing challenges for large-scale projects
➜ [00:22:59] Closing Remarks
📚 RESOURCES & LINKS
========================
- Website: https://www.terrastor.co/
- LinkedIn: https://www.linkedin.com/company/terrastor/
- 👉 Interview with Matthew Ciardiello: http://bit.ly/3LMmVN5
💡 EPISODE DISCUSSION POINTS
===========================
➜ The role and importance of compressed air energy storage in supporting renewable energy sources.
➜ The challenges and roadblocks in implementing this technology, especially in terms of finding suitable geology.
➜ The role of government policies and regulations in promoting renewable energy storage.
➜ The future developments and growth plans for TerraStore.
➜ Advice for individuals interested in pursuing a career in clean tech.
🌍 SUSTAINABILITY PODCAST CREATED BY NEW PERSPECTIVE
========================
This podcast is proudly sponsored by New Perspective Marketing, a dynamic growth marketing agency in Boston, MA, celebrating 20 years in business. We help sustainably focused B2B organizations grow their brands and scale up revenue. If you or your organization is looking to grow, visit npws.com for more info.
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Transcript
Introduction & Sponsorship
00:00:06
Speaker
Welcome to the Grain Your Perspective, your go-to podcast to learn about clean tech, nature tech and agri-tech's breakthrough solutions and the marketing strategies used to accelerate growth. We invite you to learn from and be inspired by the game changers, the disruptors and the pioneers who are redefining our future.
00:00:25
Speaker
This episode is proudly sponsored by New Perspective, a next-gen marketing agency hailing from Boston, Massachusetts, working with cleantech clients. If you want to learn more about our sponsor, please check out the info below this episode.
TerraStore's Mission
00:00:39
Speaker
So today we are talking about TerraStore, a company on a mission to help electrical grids go fully green. Well, how do they do that, you ask? Well, they got some cool tech up their sleeves, of course. TerraStore is creating massive, long-lasting energy storage system
00:00:56
Speaker
that make it possible for grids to rely on 100% renewable energy. They do this by using advanced compressed-air energy storage technology to build gigantic mechanical batteries. And get this, they use free and abundant air and natural geology to make it all work. So it's clean, simple and budget-friendly solution that's changing the game. So if you want to learn more, tune in to this episode and enjoy!
Meet the CEO
00:01:29
Speaker
Hello, Matthew. And first of all, thank you for being my guest on the Green Your Perspective podcast. For starters, can you introduce yourself and tell us a bit about your company, Terrestore, that you co-founded? Sure. Yeah. Thank you. So again, my name is Matthew Chardiello. I'm the CEO and one of the three co-founders of Terrestore Energy Corporation. And Terrestore is a developer of a
00:01:55
Speaker
not very common, but in other ways, not very new technology called compressed air energy
Understanding CAES Technology
00:02:02
Speaker
storage. I will use the acronym CAES, C-A-E-S, that's kind of a weird acronym, but CAES. And CAES is a really great technology that works for energy storage at very large scales. Maybe just backing up, my career has been spent roughly
00:02:24
Speaker
half and half between the finance industry where I focused on energy and infrastructure projects, including power distribution, energy distribution, pipelines, et cetera. And then for the last 10 years, I've been in the upstream oil and gas industry where I've had finance and operational roles and got a very good grasp through those roles of subsurface engineering as it relates to oil and gas.
00:02:51
Speaker
compressed air energy storage, as you will come to learn through this talk, is a power or electricity storage technology that relies on subsurface engineering that's similar to skill sets used in the oil and gas industry, and then of course on power systems. So you have facilities that a case system really looks like a power plant at surface.
00:03:14
Speaker
but it's situated above certain subsurface geology that we use as a storage tank for compressed air. So all to say that in putting TerraStore together a couple of years ago, I really was drawing from my backgrounds and my career, both in the oil and gas side and the power side. For our listeners who are not informed about compressed air storage, so what does that mean and how can we use
Energy Storage Challenges
00:03:42
Speaker
that?
00:03:42
Speaker
Okay, sure. So obviously renewable energy is a good thing and the world or countries around the world are deploying lots of renewable energy on grids. And that's a great thing. The problem with renewable energy is in most cases it's fundamentally intermittent.
00:04:01
Speaker
So the wind only blows when it blows and you can only make electricity when the wind is blowing. You can't make electricity at night with a solar panel. You also can't use solar very well if there's an unexpected storm and cloud cover. When you have five or 10% of the electricity on your grid coming from those intermittent sources, that's not a very big challenge. But when you start getting to
00:04:26
Speaker
30% or 40% of your electricity coming from renewable sources, that becomes a very big challenge for grid operators to manage. It becomes uneconomic for solar and wind in a lot of cases. And it's not a sustainable situation. You'll never be able to get to 50% or greater of your energy coming from renewables, unless of course you have big batteries on your grid that can absorb electricity when it's generated and then dispatch it when it's needed.
00:04:54
Speaker
And that's because it's a sort of a unique feature of electricity markets is that your supply of electricity and your demand for electricity have to be perfectly balanced. So that supply always has to be adjusting every second of the day to match the demand on the grid.
CAES as a Solution
00:05:10
Speaker
And so you really need big batteries if you're going to have lots of renewable energy. Compressed air or Ks is a big battery technology. You make these facilities or they're most economic when you make very large
00:05:23
Speaker
scale facilities, sort of power plant scale in terms of power output, and with long durations of storage so that you can take, say, a power plant's worth of power output and dispatch it for eight hours with a compressed air facility. So think of Kays as really just big mechanical battery system.
00:05:41
Speaker
What inspired you to create your company in Terrace Store and to work on that technology? Really three things. There's sort of three principles that me and my partners live by. One is that if you're going to do anything, whether it's an oil and gas, power, anything else, you need to work with what nature gives you. You're not going to fight against nature. You're not going to win. You're not going to win economically anyway. So if you're looking for solutions to do
00:06:10
Speaker
renewables or support renewables look for things that nature gives you already. Compressed air, as I said, it's a mechanical battery technology, it relies on pressure, it relies on using geology as a storage tank, and it uses air which is free and very abundant. So it checks that box for us. Another principle that I like, you know, I think for too often the oil, or for too long, the oil and gas industry has
00:06:40
Speaker
not participated in the energy transition, kind of been skeptical of it, let's say. And I think that rather than having that attitude, the oil industry should use the skill sets that it has to support the energy transition. Because, you know, of all the industries on Earth, this is an industry that knows how to engineer large scale projects.
00:07:01
Speaker
And those skill sets are valuable to other aspects of the energy transition. So compressed air certainly draws heavily on oil and gas skill sets with the subsurface geology. And then I think my third principle or inspiration, I guess, is that size really does matter. And so you need to look for solutions. If you want to make a big impact on the energy transition, which is an enormous challenge that's probably going to take the better part of two centuries to accomplish,
00:07:31
Speaker
you need solutions that work at scale and compressed air is one of the solutions that works at very large scales. So taking all those together, when I found out what compressed air energy storage was about three years ago, I said, boy, that's really interesting. It draws a lot from oil and gas and it works at scale. And that's kind of what inspired me.
Inspiration & Founding of TerraStore
00:07:53
Speaker
I looked around the industry that really was
00:07:56
Speaker
very little to no activity in compressed air. And my partners and I saw an opportunity to take what we knew from other industries and go out and start this company. And are there any specific use cases or success stories that you can share that highlight the impact of Terrestore's technology?
00:08:14
Speaker
Sure. As I alluded to before, this really isn't something new. We didn't invent compressed air at different scales. Using compressed air as a battery has been used in industrial applications for over a century. But at grid scale, there's two cases we can point to. Back in the 70s, the world had a lot of nuclear power plants and coal power plants on its grids.
00:08:39
Speaker
And those power plants are not very flexible. You can't turn them up and down very quickly. They're not designed for that. And so the world needed a technology that could shift power that was made by coal plants in the middle of the night to middle of the day without too much efficiency loss. And so compressed air was looked to at that time as a technology that could do that. So there was a plant built in Germany and there was another plant built in Alabama in the United States, you know,
00:09:10
Speaker
power plant scale compressed air projects using subsurface geology as a storage tank for compressed air. Those two plants still operate today, which after 30 and 40 years respectively.
00:09:24
Speaker
Those give a lot of comfort, I think, to lenders, to stakeholders in projects that compressed air can have a future. The designs of compressed air plants today are a little bit different at the surface than those plants, but nonetheless, I think the fact that those plants have worked well with their geology for 30 and 40 years goes a long way to de-risking this, and there are huge success cases. As it turns out, the...
00:09:51
Speaker
The availability of cheap natural gas and the designs of combined cycle power plants kind of conspired to eliminate the need for compressed air after those plants were built. And so for 20 or 30 years, there's been no new compressed air plants built in the world, but that's changing again. Now the world is looking for a missionless technologies that can deliver that time shifting energy storage. And so compressed air, I think as a bright future ahead of it.
00:10:18
Speaker
Can you share some key metrics or proof points that demonstrate the effectiveness of this solution?
CAES vs. Lithium-ion Batteries
00:10:25
Speaker
Yeah, I think there's lots of types of batteries. There's lithium ion is obviously one we think about or see a lot about in the press. And to date, most of the energy storage on our grids has been in the form of large lithium ion battery installation. However, the challenge with lithium ion is that it's really good in the two to four hour
00:10:48
Speaker
duration, you know, storage is a function not only of power capacity, so how many megawatts can a system put out, but also it's a function of how many hours or how much time it can put that power out for. And lithium ion is very economic in the one to four hour timeframe. As you start moving beyond four hours, it becomes very expensive to site lithium ion installations.
00:11:13
Speaker
And that's where compressed air comes in. We're really not a technology that's looking to compete with lithium ion in those shorter durations. It's not well suited for that economically, but it is well suited for longer durations, you know, eight hours up to multi-day storage. It's really where compressed air shines, both on a cost basis and performance basis. And so I think that's where I would point to look or
00:11:39
Speaker
have you look is at longer duration storage. And as it happens, as you have more renewables, I talked about needing storage on the grid. When you have renewables, the more renewables you have and the less fossil fuel power plants you want to have on your grid, the more you really need these longer duration assets that can deploy power for eight hours, 12 hours, 24 hours. And you've mentioned that there's a bright future for this technology, but what are the obstacles and roadblocks that you encountered? Yeah, the
00:12:09
Speaker
The primary fundamental roadblock with compressed air is that you can't do it everywhere. You're taking
Geological & Siting Challenges
00:12:17
Speaker
atmospheric air with a compressed air system, and you're consuming electricity to pressure up large amounts of air to very high pressure, and then you send that down into the ground to be stored. The best way to do that, or the best geology to do that in, is a subsurface salt formation. And I'm talking about table salt, salt that you can
00:12:39
Speaker
you know, consume. These salt formations exist here and there throughout the world. And they're really, in most cases, remnants of ancient oceans that are long since gone and evaporated, but they leave behind these really nice thick layers of salt. And you can drill into that salt, you can drill a well similar to an oil and gas well, and start circulating fresh water and leach out a void space deep down below the Earth's surface, something, you know, 1000 feet deep, 3000 feet deep,
00:13:06
Speaker
And you can make a void that's maybe the size of a skyscraper building. So a few hundred feet tall, a couple hundred feet wide. And what's wonderful about putting that so deep in the ground in salt is that you can hold very high pressure air, you know, upwards of, you know, 100 bar or more in pressure without any risk of leak off. And you can't really make a manmade structure that can hold such vast quantities of air and do it at high pressure.
00:13:36
Speaker
That's great, but the problem is those salt formations do not exist everywhere. You tend to find them in areas where you find oil and gas. It's the same sedimentary geologic processes create them, but that's to say they're really not everywhere. So the biggest obstacle with compressed air is finding the right geology to site these facilities and finding that geology in a suitable location vis-a-vis the local grid. So do you have electricity infrastructure nearby?
00:14:06
Speaker
Do you have an electricity market that needs long duration storage at this time? And lining those up is really a process of elimination and serendipity when you find locations that kind of check all those boxes. And those are all blocks that you see for the future? Well, that's one. I think we will find locations. We have found locations. I think that there's dozens of locations in the US that are going to be development ready.
00:14:34
Speaker
Roadblock is really getting, when you have a technology like this, again, it's not rocket science. We didn't invent anything. But these are very large scale projects. So they don't really lend themselves to small pilot projects. You're going to find a facility and you're going to build it. But to get that built, you really have a lot of challenges on the financing side, getting equity investors and lenders comfortable that you're going to build an expensive large scale project.
00:15:04
Speaker
that's gonna operate effectively for 25 or 30 years and get them comfortable enough that they're willing to write you checks to be able to do that. So financing is a big challenge. It shouldn't be, but of course it is. It always is for any big project, but particularly when you have a technology that I can't point to 25 examples of this, I can point to two or three.
00:15:26
Speaker
And if you pass those roadblocks, how do you see your long-term vision for growth and expansion? Yeah, TerraStore, I think you should... The best business model that we should point to or think about for TerraStore is really an independent power producer, which is IPP is an acronym for a type of company that was common, maybe started to be common 30 years ago in the United States.
00:15:55
Speaker
These are really developers of power projects. And by developer, I mean, it's a company that goes out, finds a location to site a facility, puts capital at risks, you know, several million dollars of capital at risk and lots of time and resources to get a site permitted, get a site engineered, get the facility engineered, line up investors. And then you, you know, and that process can take several years on a single project. It doesn't always work out.
00:16:25
Speaker
you know, there's lots of permitting roadblocks that could stop up a project before it ever gets off the ground, but really getting a project to the point where it's financed and ready to be constructed. That's what a development company does. Now, some development companies then stay in through the construction phase and through the operational life of the asset. And as TerraStore, we would love to do all of that, but fundamentally, we're a developer. And our hope is that over the next
00:16:53
Speaker
you know, 10 years, we get 10 projects or more compressed air projects through the development phase and into the construction phase and have ownership and operational roles in those projects as they move into their operational life. How do government policies and regulations affect your operation and growth?
Government Policy Support
00:17:13
Speaker
And what role do they have in the renewable energy storage industry?
00:17:18
Speaker
They have a big role now. The government really wants to see renewables rolled out. And to do that, they need to see a lot of energy storage go with that. And so the the Inflation Reduction Act passed last year in the United States provides a very healthy subsidy to energy storage. You're able, I think most projects could count on probably a 30% tax credit of their total capital cost being refunded to the project.
00:17:46
Speaker
through various mechanisms, which is huge. And most importantly, the IRA was, it was technology agnostic, meaning whether it's a lithium ion system, a compressed air system, or some other battery technology, as long as you didn't have fossil fuel emissions in your system, you're able to qualify for that credit. So it puts all of the technologies on the same playing field, which is really healthy and beneficial to us.
00:18:15
Speaker
Um, but of course it also means all of our competitors also get that 30% credit. So, uh, you know, from a, from that point of view, it didn't, it didn't make who pressed air any more competitive particularly, but it does make energy storage in general for attractive. And, um, are there any new features or developments on the horizon that users can look forward to from you? I think the news you should look for from TerraStore is us announcing our, um,
00:18:43
Speaker
our first project locations. For the last year and a half since we've been set up as a company, we have been looking at the hundreds of sites in the US where geology allows you to site a project and then through our own efforts and through a partnership we've commissioned with PA Consulting, a consulting firm. It was an engagement, not a partnership, let me just clarify that, but we have been working with PA
00:19:13
Speaker
on the consulting side to narrow these sites down and prioritize which sites are really development ready, both from a physical infrastructure point of view, so which ones have nearby transmission that has availability on it for a project to interconnect into, and then from a market point of view, which markets can really support the financing of a multi-hundred million dollar facility. And not all markets in the US can do that just based on the market structure.
Future Plans & Collaboration Opportunities
00:19:43
Speaker
So it's, for instance, in the desert southwest, you'll have more success probably getting a contract, an offtake contract for your energy storage facility that will support a project financing than you would in Texas in the Urquhart market. We've been sort of filtering through and narrowing the list down to maybe 10 projects that are development ready and our efforts now have been on
00:20:07
Speaker
trying to get rights to develop projects on those locations to get them into the development phase. So I think our next announcements here from Terrestore are we have a project here, we have a project there, and we're ready to start development. Yeah, so we're coming to the end of our conversation. So if someone wants to reach out to you, maybe wants to collaborate with you, how can they do that?
00:20:30
Speaker
Always email me directly. My name is Matt. We have a website. We're on LinkedIn, Twitter, so any of those features, we'll see any communications coming in and happy to talk to anyone. If you have a
00:20:48
Speaker
geology you want to talk about, we're always looking for new locations. So of course, and then looking for partnerships various ways as we get going here, we'll have need for lots of different consultants, both on the engineering and permitting side. And then always looking for investors, of course, both current, you know, to come in currently or investors down the road who would want to participate in a project financing. We are going to link all of your social media on your website.
00:21:17
Speaker
in the description of the video. So everyone who is watching or listening to us, you can check out the description below and find out what Terrestory is doing.
Career Advice in Clean Tech
00:21:26
Speaker
And Matt, for the end, I would like to ask you, what advice would you give for people who want to start working in clean tech? And of course, if you have anything more to add, now is the time.
00:21:37
Speaker
I guess as far as advice, absolutely, I think that clean tech, the energy transition space is huge. I think it's probably the biggest challenge the world has faced, and it's going to take hundreds of years to really make it happen in my view. So getting into this space from a career perspective is a wise choice. I think there'll be no shortage of need for professionals, whether
00:22:02
Speaker
You know, it's on the engineering accounting or, you know, if you're an oil and gas, for instance, being a land man has a lot of value to projects that are, you know, wind and solar projects. So yeah, absolutely. I think it's a wise choice. And I would encourage you to focus on technologies as I kind of said before that work at scale because scale is what's needed here. And yeah, I'll leave it at that.
00:22:27
Speaker
Thank you. Thank you once again for being a guest on a linear perspective project. Thank you very much. I appreciate your time.
Conclusion & Call to Action
00:22:34
Speaker
Bye.
00:22:41
Speaker
Well, we've come to an end of another episode of the Green New Perspective podcast. Thanks for tuning in. I hope you enjoyed diving into these innovative ideas and solutions. If you want to stay up to date with all our future episodes and continue exploring exciting topics with us, be sure to hit that subscribe button. Your support means the world to us and we can't wait to have you with us on the next episode. Until then, stay curious and keep learning. Bye.