Thermal storage beats hydrogen, electrification on industrial costs

A new study in Germany shows the advantages of thermal energy storage in the decarbonization of industrial processes. The researchers noted clear cost advantages and high potential for flexibility in the power grid.

January 30, 2025 Jochen Siemer

Image: Kraftblock

From pv magazine Germany

Kraftblock, a Germany-based thermal energy storage specialist, has published a 30-page study with German consultancy DWR Eco on the benefits of thermal energy storage for power grids and renewable electricity production.

The study’s generally positive findings are unsurprising, but could still draw attention by highlighting the broader economic advantages of the technology.

Thermal energy storage systems can be charged with waste heat, particularly from industrial processes, or with electricity and store energy as heat at up to 1,300 C. The researchers said that these systems suit heavy industries such as steel, metal processing, and chemicals, where process heat accounts for up to two-thirds of industrial energy demand.

The study examines how thermal storage can supply process heat while supporting power grids in key markets, including the United States, Europe, and Australia. It also compares the technology’s advantages over hydrogen and direct electrification. The study shows that industries in Germany could cut electricity costs by up to 30%.

“The results show that the technology is much cheaper and much more efficient than hydrogen and also cheaper than direct electrification,” said Martin Schichtel, managing director and co-founder of Kraftblock.

In Australia’s extreme price environment, storage systems could achieve returns exceeding 150%. High and prolonged negative electricity prices, along with large spreads between negative and subsequent positive prices, create arbitrage opportunities, making storage a “net positive scenario.” In 2023, negative electricity prices accounted for 20% of total market hours.

Germany also faces a growing need for grid flexibility, making thermal energy storage “not just a technological advantage, but essential for energy systems and industries,” said Kraftblock co-founder Susanne König. These systems cost a fraction of large batteries and offer longer energy storage duration.

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