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"Waste-heat recovery is the largest untapped potential for energy efficiency," according to Alphabet Energy's CEO, Matt Scullin.
Alphabet Energy is commercializing thermoelectric waste-heat harvesting technology developed at Lawrence Berkeley National Laboratory and just raised $16 million in Round B funding, led by corporate strategic investor Encana, a developer of natural gas and other energy sources. Existing investors TPG Biotech, Claremont Creek Ventures and the CalCEF Clean Energy Angel Fund also participated in the round. This funding adds to the $12 million round A raised in 2011 and a $1M seed round in 2010.
Thermoelectrics are materials that, when placed in a temperature gradient, have the potential to turn waste heat into power. It's a brilliant pursuit, but no one has brought it to market economically at scale just yet.
Traditional thermoelectrics use materials such as bismuth telluride or silicon germanium. Scullin suggested that these materials don't scale and don't work at higher temperatures.
Instead, the 20-employee firm's technology path is in the use of silicon-based materials, reportedly silicon nanowires, with the potential to use the existing silicon ecosystem for process development and manufacturing. The CEO would not divulge the platform technology.
Alphabet's first product is for a device that generates electricity from exhaust-gas waste heat -- which makes investor Encana a great fit. “We have a vested interest in the advancement of waste-heat recovery, and Alphabet’s approach to generating power from exhaust gas shows great promise in delivering reliable and inexpensive reductions in fuel costs,” said Vince Elenko, the lead of Encana’s Environmental Innovation Fund.
Market size estimates from the firm are massive, with exhaust flows from engines in industrial applications seen as an "$8.5 billion opportunity within the $90 billion potential market for Alphabet’s products." In reality, these are broad, diverse, and fragmented markets that will require a variety of custom approaches and sales channels.
The bottom line is cost, and the metric is payback time.
"We've identified over 100 verticals where our products could offer interesting payback times to customers." He adds, "The most pull for thermoelectric is from the automotive industry." That's to help meet EU and CAFE automotive fuel efficiency standards, "but that's not our first product." According to Alphabet, in the near term, applications are in waste-heat-to-electricity generators that utilize hot exhaust gas from heavy industrial applications and engines.
Scullin said, "We're competing with non-consumption," adding, "we can offer a payback time that gets people interested, and interested in deploying across their portfolio of waste-heat sources."
The silicon approach allowed the firm to create the highest efficiency in waste-heat recovery while using cheap materials, said the CEO. The company can operate in a capital-efficient manner because it "can use existing tool sets and scale up faster than other thermoelectrics." He noted that "the thermoelectric is 100 times as power dense as a solar panel. We need 100 times less equipment and capital than a solar company."
In residential and commercial settings, lighting and HVAC are the low-hanging efficiency measures. In heavy industry, waste heat recovery is on the top of folks' lists when thinking about energy efficiency, according to the CEO. Alphabet's technology is intended for the sub-megawatt-scale market.
Other companies developing thermoelectric technologies or capturing waste heat include:
- GMZ Energy, spun out of MIT with a $14 million Round C from KPCB, BP Alternative Energy, and Mitsui Ventures, is working on a bismuth telluride thermovoltaic device that converts solar heat directly into power via the Seebeck effect. In the Seebeck effect, a sharp temperature gradient can result in an electric charge. According to a press release, "GMZ Energy is developing its first product for the $8 billion residential, commercial and industrial solar thermal water market. Expected to launch next year, the product would integrate its thermoelectric material directly into conventional solar hot water collectors, enabling the production of electricity in addition to heat and hot water."
- MTPV raised funding from Spinnaker Capital, Applied Ventures, Massachusetts Clean Energy Center and Ensys Capital for a product the company describes as a thermophotovoltaic. MTPV uses a silicon-based MEMS emitter which takes heat and transfers radiation to a germanium-based photovoltaic device, according to an article in Semiconductor Manufacturing and Design.
- Phononic Devices is developing waste-heat capture devices with funding from Oak Venture Partners and Venrock for cooling, air conditioning and energy harvesting.
- Silicium, funded by Khosla Ventures, is investigating high ZT thermoelectrics for refrigeration. (GigaOm speculates on Silicium here.)
- Recycled Energy Development (RED) and Ormat have retrofitted factories to capture waste heat, not using thermoelectrics, but by adding CHP or cogeneration.
Susan Preston, General Partner of CalCEF Clean Energy Angel Fund and an investor in Alphabet, told GTM, "For our Fund, the interesting part is the potential game-changing nature of the technology. We all recognize the enormous amount of wasted energy in the form of dissipated/waste heat. To have the real possibility for commercialization of a cost-effective solution to capture that waste heat comes as close to a silver bullet solution to climate change as I have seen in a long time."