Talking long-duration energy storage with the CEO of Inlyte Energy (Ep. 229)

All right, welcome back to Energy Sense, an S&P Global Energy Podcast covering all topics on the intersection of energy and finance. I'm Hill Vaden, one of your hosts with Sam Humphries, one of your other hosts. Sam, how's it going? It's good, thank you, Hill. How's it going with you? It's going well. We're wrapping the year in today. I saw his International Flake Day. Did you know that? A Flake is in the delightful chocolate that you can buy in the UK that is the greatest chocolate bar ever invented. No, it's a Flake Appreciation Day like a snowflake. But it can also be interpreted any other Flake. Oh yeah. So it's supposed to be allowed on some plans for Christmas? I think so for those non-committal friends of ours. Yeah. We should wish them International Flake Day. Well, I wish you all well. Do you have Flake? All right. Keep the work will be there tomorrow. So just wait. Well, we have just wrapped up a really interesting conversation with Antonio Bachlig, who is the CEO of InLite Energy, who's based in the US and the Bay Area. They've got financial backing from Velo Ventures, first spark ventures, and at one ventures, I think at one, it's made the lead investor. But what they're doing is working with Iron Sodium Battery, which is a less dense, heavier, lower cost, more abundant technology for potentially great application of the batteries. Really interesting stuff. Give people some things to listen to as we get into the conversation here. Yeah, absolutely. So this is a really interesting company because like you said there, it's on paper. It almost seems like a wide range of reviews before. You know, these are iron and sodium, so they're using table grade salt in these batteries. So very low cost in comparison with other batteries that has potential to be made domestically in the US. So that's interesting in itself. But really the interesting part of this is how this technology is developed. So it's been around for a while since the early 80s. And you know, how can that be brought along in the different applications? Because I think originally it was going to be used for transportation, but iron is heavy. So probably not so ideal. But actually, this could be used potentially on grid and of the long duration battery storage. And it's really interesting how they are progressing this technology. So they've just done a test recently on in Derby in the UK with some of their partners on how efficient the battery has sent to be. So it's really interesting. But what about you? What did you think? Yeah, I mean, I'll echo all that and we were lucky enough to record just after they did that test. And the technology is going to be applied or installed on a project in the US with Southern Company in 2026. So a lot of things to watch early next year. So we'll hand off to Antonio now and hope everyone enjoys. All right, Antonio, thank you so much for touring SoundMade. We're in the process of wrapping up 2025. We've only got about a few days before people start disappearing for the holidays. So thanks so much for making time toward the end of the year. Yeah, great to be on. Nice to meet you, Helen Sam. And we are here today to talk about your company in light energy, which I'll let you introduce more specifically. But a big picture. This is an iron sodium or sodium iron battery innovation or innovator, which has had a pretty big year with injections of capital from the US DOE with a recent big test announcement around a project. I guess it was tested in the UK, but it's for application as early next year in Southern Company in Georgia or Tennessee. Or I'm not sure somewhere in the Southeast. Yeah, Alabama. Alabama. Sorry, I was right around the edges there. So if you could maybe introduce, you know, kind of pitch in light to our listeners and we can get into a deeper conversation about some of the news from this year and kind of where things are going. Yeah, thank you. Really excited to be on. You know, in short, we're making an iron sodium battery that is made from super abundant materials. So literally iron powder and table salt. Food. We use food grade table salt. And those are the active materials in our battery. So it's something we can source anywhere at super low cost. But also this is a high performance battery that has high round trip efficiency really long lifetime and an excellent safety record. And you know, I think it's I want to kind of explain also the history here because I think for a lot of people not in the battery world, you can hear about a lot of battery chemistries, right? And they all kind of sounds like people are saying the same things and like it's hard to yeah, hard to figure out, you know, what's different about them. But I guess my background first, you know, I always been passionate about energy and climate and I worked at a climate tech, clean tech startup right out of college as an early employee and then decided I really wanted to work on energy storage for the grid. I think we need ultra low cost energy storage for the next, you know, energy future and went to Stanford. It's been eight years studying batteries, the range of battery technologies, lithium ion batteries, flow batteries. But ultimately got really interested in sodium and got, you know, from a fundamental periodic table standpoint, got interested in sodium metal as the starting point for the best starting point for a grid battery. And I can get way much into the material science there, but I'll skip that for a second, but, you know, iron is also a very abundant material and then it hit me in 2020 that this fundamental direction that I was going actually looks a lot like an existing battery technology called the sodium metal fluoride battery that was originally invented in the 80s. So, you know, I think for people from outside the battery world, you know, it's, you hear about all these new technologies and you don't realize that actually there's actually very few, when you look at you classify batteries into different groups, there's actually very few groups that have been fully commercialized, like, made it all the way, like passed all the technical challenges, manufacturing lifetime challenges, and become fully commercialized systems. I mean, you know, lithium ion is one class of batteries. I would even lump sodium ion into that class. They're extremely similar architectures. Flow batteries of one class, there's a ton of different flow batteries, but that's there's one type of way to make a battery. There's alkaline batteries, there's lead acid batteries, but there's also sodium metal batteries. And these were invented actually in the 60s. So it goes back to the 60s. There's two main types, sodium sulfur and sodium metal chloride. And these are fully commercialized battery system. I think they're not as widespread as lithium ion, not as many people know about them, but they are, they have passed all their hurdles, gotten to market, and really proven themselves. And I got really interested in sodium metal chloride because shared all these fundamental properties that I was looking for, but also it has that element of safety and abundant low-cost materials. So, you know, when I started the company in 2021 to reinvent the sodium metal chloride batteries for grid storage, because they're originally invented for vehicles in the 80s and 90s. And that led them down this whole route that was optimizing power density, but not optimizing for low-cost for the grid. And so we changed direction and have now reinvented that. And then as a company, I found the people who, the original inventors of this technology who live in the UK, their company is called Beta Research. Long story short, we joined with them. They're on our company now. That's why we have test facilities in the UK. And it's really allowed us to go quickly and leverage that 45-year history in an extremely direct way to make something that we're ready to take to market. Sorry for the long winded response. I wanted to explain that. That's good, because it's funny enough, I was going to ask what led you from sunny California to slightly drizzly Darby in the north of England. Because it is an interesting story, you know, it's too very different world, but you said that they invented this technology. But one thing, how has that partnership evolved? Because it is an interesting story. And you mentioned on safety, which is something, we've talked a lot about battery, so when you're storing power, safety is a significant element, because heat gets involved at some point. So can you explain the journey to meeting those folks over in the UK and why this technology is safer? Yes, yeah. And that actually goes back to the genesis of it. So, you know, the group group there, they were working at, so going back to the 70s, they were working at British Rail. British Rail, yeah. Had this idea to basically put batteries on trains so that when they got into the rural areas that couldn't have electric lines on them, the trains could then go on to battery power. And so they were working on sodium sulfur batteries for that purpose. You know, I mentioned the two different types in the sodium metal battery category. For some reasons, the British Rail decided to cut that program in 1980. And this team, long story short, they basically decided, we wanna keep working on batteries. We're gonna form our own group, our own company. They're actually called the Dirty Dozen, because they kinda separated off of the British Rail. And so they did, and they had the choice at that point to keep working on sodium sulfur, which already had been existing for 20 years and had really gotten far in development. Or they could work on this very brand new laboratory scale idea of the sodium metal chloride battery that actually came from South Africa. And the scientist there wanted to collaborate with somebody who could develop it. And they chose sodium metal chloride because of the safety, the better safety profile of it. The intrinsic safety aspects, which are that, when every battery you have chemicals in there that wanna react, and that's how they store energy. In a lithium-ion battery, if you have those, internal shorts so the chemicals start reacting, then you have pressure buildup heat temperature rise, and eventually you can have all the materials and batteries catch and fire. In a sodium metal chloride battery, if the two sides react, there's actually, you do have energy released and some heat buildup, but they actually don't create pressure buildup. They create solid byproducts that form this internal short in the battery and basically allow it to the rest of the module to continue functioning. And you just have that one battery fail without causing a fire. And that's it. That one cell fails. He's up a little bit, but all the other cells are fine. So that's, anyway, that's why they originally got into this and then they spent all those decades developing it for vehicles because there wasn't a better technology for vehicles. Now, lithium-ion then came along before this technology could really get to scale. And lithium-ion is a more energy dense, especially in gravimetric terms. So it can get to a better range in vehicles. We're not trying to supplant that at least now, but I'll mention, you know, in the future, this chemistry does have good theoretical on your density. We make a few more breakthroughs. We could be competing in vehicles, but we see right now this great opportunity to use this battery. And what I view is the best use case for it, which is the grid. So how, talk with me a little bit more about kind of the why now for this type of technology, right? That I, if I think about batteries from kind of an elementary perspective, elementary being a description of me rather than the science, I want something energy dense and light, right? Because most of the time, the battery is powering something that needs to move or be carried or something like that, right? And I hear the knock on kind of iron sodium is it's heavy, which makes a lot of sense in grid applications. And then of course, if the material is abundant, like we're talking about, there's a lot of things kind of lining up for it. Why is it just because people were carrying things that were battery powered that is waiting until 2025 for iron sodium to have its moment or there are other things going on? Yeah, you know, it's really the use case on the grid that was not here before. You know, there was energy storage on the grid prior to the last 10 years, mostly in the form of Pantitro, but it didn't constitute a large fraction of it. Now, there's a ton of reasons to add energy storage to the grid. Wind and solar, of course, are intermittent and they're extremely low cost abundant source of energy. But energy storage just makes everything work better and more efficiently on the grid. And that's really taken off in the last 10 years. And prior to that, the focus on this technology was power density for vehicles and no one had really repurposed it, reinvented it for the grid. And in particular, there's one aspect of it that's really important that I should mention that we've done. And that's the use of iron. So the group at Beta Research, you know, certainly iron's pretty logical when you look at the pure acta, is the most used mine metal that you might use by far. And they started working on that. But in 1987, they switched to nickel because nickel gave them a little more power density for vehicles and that was the critical metric they had to hit. So nickel's been the commercialized version of this battery. And you know, when you think about getting to ultra low cost storage, the nickel doesn't really pencil for that, the nickel based cathode. So you really have to go to the iron based cathode and that's hadn't been, you know, fully developed. So I founded in light energy. I recognized that a key challenge we had to solve, first of all, was to be able to use iron chemistry in this battery. And I got an ARPA E grant for that. And then I met the folks at Beta Research in the UK and they said, you know, we've been working on iron, you know, in the 80s, we got it pretty far. We just hadn't completed that work. And I said, okay, great, let's do it together. And that's what we've done. - So I just want to, you know, clarify how much cheaper or what the cost savings could be for using this technology. Because you said there isn't abundant metal. And you know, you then got the option to maybe do a bit more domestic production of these types of batteries as well. But if you're comparing with a lithium ion battery, say, what sort of cost savings could there be assuming that, you know, size isn't the issue. If you want to grid, you don't necessarily need to be as small as you're talking about for transportation. So we're kind of all far we're looking at here. - Yeah. You know, the cost floor on this because of the abundant materials is extremely low. If you just look at iron and table salt as the reactive materials, they cost less than a dollar per kilowatt hour for the raw material. That store energy and our battery. Now, of course, you need all the other components in the battery. You need to manufacture it. So when we look at, and you know, we have a team that's already manufactured these batteries, we know extremely well all the costs that go into this exactly what the factory looks like, what equipment we need, how many people, we have a very clear at view of how we scale this technology up, and also a technology roadmap about how we develop it as we do. And with that view, we can reach easily one quarter the cost of where we think lithium ion is going. Now, you know, it's been coming down. And so, you know, this is our projections into the future. It's not going to go to zero. There are fundamental limits to the cost of materials in lithium ion batteries or sodium ion batteries. So, you know, that differential is something that this technology can easily hit. And then, you know, even beyond that, I think there's lots of potential. I also want to mention, and also, okay, when we talk about cost, really levelized cost of storage or total cost of ownership is what matters to the customer. So I was just talking about upfront capital cost. But these batteries, there's three main components in levelized cost of storage. There's the upfront capital cost. Well, actually, there's four. So there's upfront capital cost. There's the operating maintenance cost on an annual basis. There's the round trip efficiency, and there's the lifetime of it. And so on all the other aspects as well, this technology is better. We have less operation than maintenance. It's a very long lifetime of bus technology and that's been proven in the field now. And, well, round trip efficiency, it depends on the use case and exactly how we define it. But we're at least on par and have routes to be better. And the duration of this technology is part of the value of the pitch rate is that these are long duration projects. So I'd like to go into that a little bit. I have questions about the business case of long duration batteries, because the way I understand batteries today, they make so much, it's almost like a slot machine, right? That they make a lot of their money based on short-term spikes in volatility and a battery project and an energy only more, it makes all of its money over 12 days. Or something, that's not an exact number, but you get the idea. So when I bring. long-duration batteries into a market that volatility lessons and reduces my exposure to possible upside. So can you talk about kind of the opportunities, I guess, with the business model around long-duration batteries relative to that volatility play that short-duration batteries seem to be leveraging? Yes, great question. OK, great. Yeah, because I have a lot of thoughts here. You know, I think the term long-duration energy storage is widely used. And for listeners, that's basically if you have a certain amount of power that the battery can provide, the duration is how long it can discharge for that. And most lithium-ion batteries are put on the grid at two hour or four hour durations now. So a megawatt battery discharges for four hours. But there's increasing desire and need for longer durations. There's a market now for eight hour, 10 hour, 12 hour storage. We're seeing that. And we were seeing an interest in even longer durations than that. Now, why are people interested in that? So why not just add two, four hour batteries together, and then you have a eight hour battery? That is actually better than an eight hour battery, because the two four hour batteries have a total combined power of two megawatts instead of one megawatt. So the reason is people are looking for eight hour solutions because they want that total cost to come down. And they don't want to just pay double what a four hour battery is. They want it to be coming down. That's how you make that use case economic. So I don't actually like the term long durations storage because there's nothing intrinsically better about an eight hour battery versus a four hour battery if it costs double. The costs have to been downward. And I think this is something that because lithium ion is most used today, and its costs are basically linear with duration, people look at it and say, well, there's really the market for short duration today, and the market for long duration is in the future. But if you have other technologies that don't have that linear relationship with cost, there's tons of use cases for it already today. So I just wanted to make that overall point. And in our case, we can basically-- because our raw materials are so low cost, we have this relationship where we can build really big cells. I haven't talked about the manufacturing process either. But essentially, you build these ceramic tubes, and then you fill them-- you just pour in the raw materials that iron in the table salt. So it's very economic for us to build really big cells and just pour in a lot of these low cost raw materials. And what we end up with is storage that is longer duration. But the costs have a completely different relationship than lithium ion. And so I really think people should think about in terms of low dollar energy storage. I want to rebrand LDS's low dollar energy storage. I like it. But then in terms of the use case, I agree. I totally agree that you want batteries to be able to be used for these really one hour, two hour, to smooth the grid in those price peaks. And that's a lot of the value of batteries. And so you want-- if you're making so-called LD-Londoration Energy Storage, you want to be able to use it in that case, which means you need high-round trip efficiency. And so that's why from the start, we've always been trying to make something that has a low dollar cost, but also high-round trip efficiency. But then when we talk about-- I could talk for a lot longer about these cases. And there's a ton of them. But I'll just say, for example, one, we have a customer that's actually agreed to install our batteries on the distribution grid where they're seeing 10 hour peaks during the summer. And in order to avoid upgrades to that substation, they need something that can discharge over that 10 hours. And they need it to be cost effective. So that's where our battery comes in. And as we're seeing this rise in electricity demand fueled by data centers, I mean, this is really a new era we're in on the grid that we haven't been in the last 25 years. And now there's so much price pressure on the electricity sector. I think you're going to see these applications where actually the battery stands in for transmission and system upgrades. And that's where you want these longer duration. Yeah. Yeah. So you kind of mentioned efficiency there as well. And I could be a bit nerdy. And I really like talking about batteries in the chemistry. But I'm not going to do that because I don't know as much as you. But can you explain a little bit about that efficiency gain that you were talking about with the sodium ion batteries compared to what's already on the market? Is there an efficiency gain? Is it-- what does that look like for customers? Yeah. Yeah. We had a recent Dr. acceptance test in the UK with Southern Company where we're going to be putting our first pilot in early in 2026. So they came and witnessed the modules working at our facility near Darby. And we showed 83% DC round trip efficiency of the batteries there, including on Zillaries. So that's really good. And round trip efficiency is the amount of energy you get out of the battery divided by how much you had to put in. So you want to get as almost as much out as you put in. So 80% to 90% is where lithium ion batteries can be today, although actually when you factor in different use cases and cooling costs, it can even drop below that. Because if you're in a very hot climate, you have to pull the batteries that-- then you can start to drop below that. That's something that doesn't matter to our type of battery. But basically, it's also-- it's really a non-linear curve. There's diminishing returns once you get up into the 80s and 90s to the difference between 85 and 95. That's a good difference. But it's not going to change the economics overall. But it's a non-linear. When you get down to 75, when you get down to 65, then you're talking about if you're 65% round trip efficient, now you're losing 1/3 of the energy that you had to put in. So there's actually one of our x relationship here. So we've talked some on the competition between different storage types, on battery types. I guess one of my other questions around kind of the long duration ideas. If I compete with a power plant, why not just build a power plant? What? Why install a battery? If I need 10 hours of power, and I need, in order for my battery economics to work, I'm going to have to count on a retirement from solar where I can charge a battery during periods of overcapacity at $0. And then I can deploy it and make money. Why not just build a power plant? And will the cost of long duration batteries are they that much cheaper than, say, building a gas fire or nuclear is maybe an easy answer. But a long duration power plant will act with better work? Yeah, that's a great question. So there's a lot of-- OK, a lot of different threads here. So first of all, you can't build a power plant everywhere. Actually, batteries are much more sideable. We're talking about the distribution grid and handling these transmission bottlenecks. Yeah, you just can't build a power plant in every community for a number of different reasons. So batteries are much more sideable, deployable, and can really solve the needs for that. Also behind the meter use cases for customers, that's another application that we're getting a lot of interest in. Now, on the bulk grid, I guess I want to say two things. One is effectively solar and wind plus batteries is a power plant. Now, to be apples to apples, and if you want base load power, then you actually need a lot of batteries, and you need those to be really low cost. So I think it's interesting that we've been hearing. I think if you're in the energy world, you kind of hear about, oh, lithium ion batteries have come down and cost so much in the past few years. But then you also hear, oh, data centers, like natural gas, nuclear, you don't hear solar plus batteries as power and data centers. So I think that people have to realize we do need lower cost batteries to get to that point where you then are competitive with just natural gas as a base load power supply. And then the last thing I'll just say is, natural gas power plant also needs fuel. And yeah, I think that's when people look at the rise in data center, if all the data centers that are in the advanced stages right now get built in the next maybe five to seven years, that's a 25% increase in total US electricity consumption. Right. It's really wild. And just the natural gas just supply even though we do produce a lot of natural gas. And we can increase that, but the prices are going to go up for natural gas. So if you just think about how is the US going to meet that demand just from a pure kilowatt hours perspective, I'm a firm believer we need to all every energy source. And it can't, it's not going to be all natural gas because that's going to break the markets in terms of price. All right. Well, we always like to sort of round these conversations up with sort of a forward look time to 2026, would you believe? So I've got kind of twofold question. Bessie, where do you think energy is going to go say in the next six to 12 months? And secondly, will you be going to any football or soccer matches the next time? Okay. Oh, for sure. Okay. Yeah. First question. We're a very exciting inflection point. You know, we've now gotten our utility scale modules were demonstrating that. So that our pilots, our first pilots for these are going to go into the ground in 2026. The first one is a company. We have a few more lined up. And any customers interested, please reach out to us. So that's, you know, having that those systems in the ground, I think is going to draw a lot more attention to this and be really exciting. The second area is manufacturing. You know, this is something we can manufacture in the US. It's a simpler manufacturing process. The supply chain is abundant. We can source it in the US. And we are looking at sites right now for our first US manufacturing site. We'll be choosing that early next year and, you know, getting that started next year. So that'll be really exciting for us to then come online in 2027. And I, you know, I think that's also a point. I just want to emphasize, you know, we, in our facility, we take raw materials in and we have finished battery modules out. It's basically a complete supply chain in one plant. And when you think about lithium ion or sodium ion and what kind of supply chain the US would have to build out to really make those domestically, it's a huge difference in capital and complexity for that. And then I'm also looking forward in 2026 to going to more Dary County football again. So it's just that one last week, you know, we're a big fan. We're near Darby with big fans of the club and they've been getting some momentum this season. I hope it keeps up. Well, I'm going to piggyback on that. I know that was the last question. But the other thing that I want to make sure that I think is correct here that you're using technology that is not going to be exposed to the fee orchestrations for an entity of concerns that other batteries, lithium ion batteries, almost exclusively today are coming out of China which there's foreign and even concern issues with the deployment in the US in the future. And then it sounds like the manufacturing, there's a huge stimulus right now going into on-shore manufacturing starting in 2026 for manufacturing in the US. So it sounds like you really got some tailwinds in about 12 days. Yes, exactly. Yes, exactly. Thank you for pointing that out. Rules are changing incentives. The whole everyone in the US government wants us to be producing batteries domestically that don't rely on China. And this is one of the few battery technologies that we can do that with absolutely no materials, no support, no equipment coming from China. All right. Well, there's all that happens in 12 or 15 days. This will be going out in 2026. Great. So this will be the past then. Antonio, thanks so much for joining us. I'm really excited to watch and light and see what happens from here. Thank you. It's been a pleasure.