CSIRO spin-off raises record amount to fund solar heat and power tech, get industry off gas

A new concentrated solar thermal company spun out of Australia’s national science agency, CSIRO, is promising to deliver zero emissions, 24/7 heat and power that is both technically and economically competitive with gas.

The new company, FPR Energy, launched on Tuesday after raising $15 million in a venture capital funding round led by RFC Ambrian. It is the largest seed funding haul for a CSIRO co-founded venture to date. 

FPR’s technology captures solar energy using heliostats to heat abundant and low-cost ceramic particles, which then store energy for on-demand industrial heat or continuous electricity generation.

The CST technology has been tested at a 1 megawatt scale (1MW) and shown to be able provide around eight hours of electricity generation and 16 hours of storage, and is capable of producing temperatures up to 1200°C – an industry first.

The provision of non-fossil industrial heat at the temperatures and scales required by industry – according to FPR nearly half of industrial heat demand exceeds 500°C – is a particularly valuable at the moment, in the race to net zero.

But the record-setting fund-raising attracted by FPE Energy also suggests that it could be CST’s time to shine, after a number of false starts and commercial stumbles in the shadow of the enormous success of solar photovoltaics.

“From our perspective, we’d like to think that this is probably one of the reasons why CSIRO has taken the steps to to form a new venture and to create a new entity in an emerging industry,” FPR’s senior technology advisor, Greg Wilson, tells Renew Economy.

Wilson, who was core to the CSIRO team who developed the particle based CST technology and led its commercialisation and spin-out to form FPR Energy, says it’s likely a combination of huge unmet demand and the attributes of company’s technology that has hit the spot with investors.

“The technology that FPR Energy is developing enables a diversity of applications, and that’s what our customer base has been impressed by in some ways,” he said on Tuesday.

“You know, you can use the technology for electricity provision; it’s got integrated storage for dispatchable demand and, importantly, high temperature industrial heat … [for] those hard to abate industry sectors that are looking for renewable energy sources and solutions.”

One of the barriers standing in the way of CST’s commercial success has been cost, but Wilson says modelling carried out by the CSIRO team and published in peer review articles shows that at a 50MW CST plant is “pretty commercial” at around or below $12 a gigajoule.

“That’s very close to the parity for gas, and that can become one of the attractions for our industrial partners,” he tells Renew Economy.

“We don’t know exactly what they pay for gas, but the federal government’s $12 a gigajoule hard cap gives us something to work towards.”

A 50 MW demonstration plant is also something FPR is working towards, targeting sometime within the next two years, given the company can gather the right financial support and the right end user in the right industrial environment.

“We think it’s comparable to gas… FPR Energy has certainly quoted to us that they anticipate targeting about an $8 a gigajoule, but that’s a target for the company to achieve once they’ve deployed the technology and show that it can operate the scale [needed by] the customers.”

Another selling point for FPR’s technology is scalability and flexibility, or – as the company’s website puts it: “Customisable CST solutions… from turnkey particle systems with high-grade heat storage to specialised engineering and heliostat field optimisation. Our expertise ensures efficient, scalable, and reliable solar thermal energy solutions for every application.”

Wilson says the technology also can be hybridised with existing gas fired power systems, to allow industrial customers to gradually integrate the technology with their operations and ensure that it delivers what they need as they move away from gas.

This is something miners have been doing already with solar, batteries and even wind turbines, to power their remote, off-grid sites, and Wilson says – for this reason – the mining sector has been one of the most interested in FPR’s technology.

“A large scale mine, they’re … on the high end of the commercial scale that we’ll be targeting, and so the demonstration scale pilot … will help to proportionate their risk in the future.”

The ability for the technology to serve as energy storage is also a big plus.

“From our engagement with … the user base that we’re targeting, these are the sort of things that they’re providing back to us as positives,” Wilson says.

“[They’re telling us] that electricity alone is not what they’re looking for, and asking how they can meet their energy requirements other than through gas. This [technology] provides a distinct renewable energy alternative.”

FPR Energy’s launch is also being backed by Osaka Gas, a major Japanese utility that operates in Australia and brings to the equation valuable knowledge and expertise to get the CST technology to market.  

“Emission reduction and affordability of energy are often a dilemma for many industrial energy users and this particle-based CST and possibly thermal energy storage can offer practical solutions for them,” said Hiroki Tanaka, head of next-gen business development at Osaka Gas.

“Through our history, we have been contributing to the low carbonisation by switching heat sources from coal, fuel oil to gas with efficient energy solutions. We are thrilled to bring our knowledge to help FPR Energy to create real-life solutions for industrial customers,” he says. 

See also: Vast secures funds to advance Australia’s first big solar thermal project and local manufacturing