Industrial heat startup Rondo to open world’s largest battery factory

Rondo Energy’s unconventional energy storage tech will soon be manufactured in a bigger factory than that of any conventional battery maker.

The Bay Area startup already can produce 2.4 gigawatt-hours of its ​“heat batteries” per year at a facility in Thailand owned by Siam Cement Group. That factory will now expand over the next few years to produce 90 gigawatt-hours of the batteries per year, the companies said Monday, though they did not specify an exact completion date.

Once online, the factory will produce considerably more storage capacity than existing lithium-ion factories can muster. Tesla’s Gigafactory Nevada has achieved 37 gigawatt-hours’ worth of annual cell production, and GM is building a couple of 50-gigawatt-hour battery plants in a joint venture with LG Energy Solution. But the race for the biggest battery factory is heating up — 100 gigawatt-hour factories have been proposed by Tesla and China’s CATL.

Rondo’s ability to scale production so quickly stems from its use of a very different storage mechanism. It doesn’t employ the capital-intensive anodes and cathodes that have to be expertly minted at typical battery plants.

Instead, Rondo built a product around refractory brick, a centuries-old recipe made from oxygen, silicon and aluminum that is known for its heat-storing abilities. The company uses clean electricity from renewables to heat the specialized bricks in an insulated container. They can then deliver industrial heat up to 1,500 degrees Celsius round-the-clock to replace fossil fuels in intensive industrial processes or to heat steam to regenerate electricity, swapping out the fossil heat source in conventional power plants. It’s a way to translate the variability of renewable generation into the consistent energy that industrial facilities need.

SCG already manufactures this type of brick with some renown; last fall, it joined Rondo’s Series A round as an investor. SCG brought brick-manufacturing expertise to the table (plus an appetite for clean industrial heat at its own cement factories). Rondo contracts with SCG to produce the bricks, so the young startup doesn’t have to fund a massive manufacturing expansion itself.

“[SCG] had more technical capacity in refractories than any U.S. manufacturer that we talked to,” Rondo CEO John O’Donnell told Canary Media. ​“It goes way beyond the avoided capital. It’s absolutely a slingshot for us in how fast we can get to this scale.”

Slingshot-level acceleration is not an exaggeration. Rondo raised its $22 million Series A in February 2022, led by Breakthrough Energy Ventures and Energy Impact Partners. It only has one commercial installation operating right now, at the Calgren ethanol plant in California. On paper, these are not indicators of the next biggest energy storage factory in the offing.

But at a certain point in the multiyear industrial sales cycle, large customers get serious about swapping out their heat sources for a new, low-carbon one, and they want to see that Rondo can actually deliver.

“This is done in response to customer demand,” O’Donnell said of the expansion. ​“They want certainty that it’s producible and deliverable.”

Rondo appeals to companies that have pledged to zero out carbon emissions but don’t know how to perform high-heat industrial tasks without fossil fuels. The startup also makes an economic case: It looks for locations where the cost of grid electricity or a renewable power-purchase agreement plus a Rondo unit comes out lower than the business-as-usual cost of fossil-fueled heat.

“Where it delivers both economic value and decarbonization — then you’ve got economic tailwinds,” O’Donnell said. ​“Those are the projects that we’re focused on serving.” And that’s already happening in ​“most of Europe” — where fuel prices are high — and ​“huge swaths of the United States,” where renewables have gotten deliciously cheap.

The market for industrial-heat brick energy storage remains very much untested. But selling something that’s cheaper than the status quo is a better way to start testing it than selling at a green premium. Every challenger to lithium-ion battery storage knows that massive scale brings unit costs down, but Rondo may be the first alternative storage company to actually achieve that scale.