In today's episode, we are joined by Matthew Ciardiello, the CEO and co-founder of TerraStor Energy Corporation, a company working in the field of compressed air energy storage (CAES).
Matthew discusses the company's work in developing compressed air energy storage, a technology that provides large-scale energy storage for renewable energy sources.
He also speaks about the challenges and opportunities in the field, his vision for TerraStore, and offers advice for those interested in entering the clean tech sector.
We are excited to delve into the current challenges and opportunities in the energy market that TerraStor is addressing.
🎧 Listen to & watch the episode
🕑 KEY MOMENTS
➜ [00:01:14] The Introduction of Terrastor
➜ [00:03:33] Compressed Air Energy Storage (CAES) Explained
➜ [00:05:46] Inspiration behind Terrastor
➜ [00:11:35] Longer duration storage needs for renewables
➜ [00:11:59] Obstacles and roadblocks in compressed air storage
➜ [00:14:40] Financing challenges for large-scale projects
➜ [00:22:59] Closing Remarks
💡 EPISODE DISCUSSION POINTS
- The role and importance of compressed air energy storage in supporting renewable energy sources.
- The challenges and roadblocks in implementing this technology, especially in terms of finding suitable geology.
- The role of government policies and regulations in promoting renewable energy storage.
- The future developments and growth plans for TerraStore.
- Advice for individuals interested in pursuing a career in clean tech.
👤 INTERVIEW WITH MATTHEW CIARDIELLO
What is Compressed Air Energy Storage (CAES)
Dunja Jovanovic: To kick things off, could you share a bit about yourself and the challenges TerraStor is addressing in the energy market?
Matthew Ciardiello: I'm Matthew Ciardiello, CEO, and co-founder of TerraStor Energy Corporation. TerraStor specializes in compressed air energy storage (CAES), a technology that tackles the challenges posed by intermittent renewable energy sources. My background spans both finance and the oil and gas industry, providing a unique perspective on CAES.
DJ: Could you explain CAES to our listeners who may not be familiar with it and its practical applications?
MC: Of course. While renewable energy is fantastic, it has a drawback—intermittency. Wind and solar energy only generate power when the conditions are right. CAES solves this problem by storing excess energy as compressed air and releasing it when needed. Think of it as a large-scale, long-duration battery system. It's the missing link to making renewable energy more reliable.
Brand Development and Impact on the Energy Landscape
DJ: What inspired you to create TerraStor and work with this specific technology?
MC: Three key principles guided our journey. First, we believe in working with what nature provides. CAES leverages natural resources like compressed air and subsurface geology. Second, the oil and gas industry should support the energy transition by applying its engineering expertise. CAES, with its geological components, aligns well with this. Finally, to make a real impact on the energy transition, we need solutions that work at scale. CAES fits this criterion perfectly.
DJ: Can you share any use cases or success stories that showcase the impact of Terra Store's technology?
MC: CAES isn't entirely new; it's been used in industrial applications for over a century. In the 1970s, it was deployed to address the inflexibility of nuclear and coal power plants. Projects in Germany and Alabama still operate today, highlighting the technology's durability. CAES has a bright future as it's well-suited for long-duration storage.
DJ: Great to hear about its longevity. Can you provide key metrics that demonstrate CAES's effectiveness compared to other storage technologies?
MC: CAES excels in long-duration storage, typically over eight hours, while technologies like lithium-ion batteries are better suited for shorter periods. As renewables grow, the need for extended storage becomes crucial, and CAES becomes cost-effective in this space.
Overcoming Challenges: TerraStor's Vision for CAES Growth
DJ: You've outlined a promising future for CAES. What obstacles have you encountered along the way?
MC: The primary obstacle is finding suitable geological locations for CAES facilities. These sites, often in salt formations, are not widespread. Financing large-scale projects like CAES is also challenging. These projects require significant capital, making it essential to gain investors' trust in their long-term viability.
DJ: Given these challenges, what's Terra Store's long-term vision for growth?
MC: Terra Store aims to develop and own multiple CAES projects over the next decade. We want to be actively involved in construction and operation as these projects transition into their operational phases.
DJ: How do government policies and regulations impact your operations and the renewable energy storage industry?
MC: Government policies play a crucial role. In the US, recent policies provide substantial subsidies for energy storage projects, benefiting CAES and other technologies. This levels the playing field and accelerates the adoption of energy storage solutions.
DJ: Any upcoming features or developments on Terra Store's horizon?
MC: Our focus is on the development phase of several CAES projects, with announcements coming soon as we begin development.
📝 EPISODE TRANSCRIPT
Welcome to the Green New Perspective
, your go to podcast to learn about clean tech,
nature, tech and agritech breakthrough
solutions and the marketing strategies
used to accelerate growth. We invite you to
learn from and be inspired by the game changers,
the disruptors and the pioneers who are
redefining our future. This episode is
proudly sponsored by New Perspective and Next
Gen marketing agency. Hailing from Boston,
Massachusetts, working with clean tech clients.
So if you want to learn more about our sponsor,
please check out the info below this episode. So
today we are talking about Terrastor, a company on
a mission to help electrical grids go fully green.
Well, how do they do that, you ask? Well, they
got some cool tech up their sleeves. Of course,
Terrastor is creating massive, long lasting energy
storage systems that make it possible for grids
to rely on 100% renewable energy. They do this,
but by using advanced compressed air energy
storage technology to build gigantic mechanical
batteries and get this, they use free and abundant
air and natural geology to make it all work.
So it's clean, simple and budget
friendly solution that's changing the game. So if
you want to learn more, tune in to this episode
and enjoy. Hello, Matthew. And first of all,
thank you for being my guest on the Green
New Perspective podcast. For starters,
can you introduce yourself and tell us a bit about
your company, Terrastor, that you co-founded?
Sure. Yeah. Thank you. So again, my
name is Matthew Yellow. I'm the CEO and one of
the three co-founders of Terrastor Energy
Corporation. And Terrastor is a developer
of a not very common, but in other ways
not very new technology called compressed
air energy storage. I will use the acronym
Kase, Kas. That's kind of a weird acronym,
but KS and KS is a really great technology that
works for energy storage. A very large scales. Um,
maybe just backing up my, my, my career has
been spent roughly half and half between the
finance industry, where I focused on
energy and infrastructure projects,
including power, power, distribution,
energy distribution, pipelines, etcetera.
And then for the last ten years I've
been in the upstream oil and gas industry where
I've had finance and operational roles and got a
very good grasp through those roles of subsurface
engineering as it relates to oil and gas,
compressed air energy storage, as you will come to
learn through this talk, is a power or electricity
storage technology that relies on subsurface
engineering that's similar to skill sets used in
the oil and gas industry and then of course, on
power systems. So you have facilities that a cave
system really looks like a power plant at surface,
but it's situated above certain subsurface geology
that we use as a storage tank for compressed air.
So all to say that in in putting Terrastor
together a couple of years ago, I really was
drawing from my backgrounds and my career both
in the oil and gas side and the power side for.
Our listeners who are
not informed about compressed air
storage. So what does that mean
and what how can we use that?
Okay, sure. So obviously
renewable energy is a good thing.
And the world or, you know, countries
around the world are deploying lots of renewable
energy on grids. And that's a that's a great
thing. The problem with renewable energy is
in most cases, it's fundamentally intermittent.
So the wind only blows when it blows and you can
only make electricity when the wind is blowing.
You can't make electricity at night with a solar
panel. You also can't use solar very well if
there's an unexpected storm and cloud cover. Um,
when you have 5 or 10% of the electricity on
your grid coming from those intermittent sources,
that's not a very big challenge. But when you
start getting to 30% or 40% of your electricity
coming from renewable sources, that becomes
a very big challenge for grid operators to
manage. It becomes uneconomic for solar and
wind in a lot of cases. And it's just it's
not a sustainable situation. You'll never be
able to get to 50% or greater of your energy
coming from renewables unless, of course,
you have big batteries on your grid that can
absorb electricity when it's generated
and then dispatch it when it's needed.
And that's because it's a sort
of a unique feature of electricity markets,
is that your your supply of electricity
and your demand for electricity have to
be perfectly balanced. So that supply always
has to be adjusting, you know, every second
of the day to match the demand on the grid. And
so you really need big batteries if you're going
to have lots of renewable energy. Compressed air
or KS is a big battery technology. You make these
facilities or they're they're most economic.
When you make very large scale facilities,
sort of power plant scale in terms of power
output and with long durations of storage
so that you can take, say, a power plants worth
of power output and dispatch it for eight hours
with a compressed air facility. So think of KS
is really just big mechanical battery systems.
What inspired you to create your
company, Terrastor and to work on that technology?
Really three, three things.
There's sort of three principles that me
and my partners live by. Um, one is
that if you're going to do anything,
whether it's an oil and gas power or anything
else, you need to work with what nature gives you.
You're not going to fight against
nature. You're not going to win. You're not
going to win economically anyway. So if you're
looking for solutions to do renewables or support
renewables, look for things that nature
gives you already compressed air. As said,
it's a mechanical battery technology. It relies
on pressure. It relies on using geology as a
storage. Tank and it uses air, which is free
and very abundant. So it checks that box for
us. Another principle. That I like you know,
think for too often the oil for too long,
the oil and gas industry has kind of not
participated in the energy transition,
kind of been skeptical of it, let's say, and
think that rather than having that attitude,
the oil industry should use the skill sets that
it has to support the energy transition because,
you know, of all the industries on earth, this
is an industry that knows how to engineer large
scale projects, and those skill sets are valuable
to to other aspects of the energy transition. So
compressed air certainly draws heavily on oil
and gas skill sets with the subsurface geology.
And then think my third or
inspiration guess is that size really does
matter. And so you need to look for solutions
if you want to make a big impact on the energy
transition, which is an enormous challenge
that's probably going to take the better
part of two centuries to to accomplish, you need
solutions that work at scale and compressed air
is one of the solutions that works at very
large scales. So taking all those together,
when I found out what compressed air energy
storage was about three years ago, I said,
Boy, that's that's really interesting.
It draws a lot from oil and gas and it
works at scale. And and that's kind of what
inspired me. I looked around the industry.
There really was very little to no activity
and compressed air. And my partners and I saw
an opportunity to take what we knew from other
industries and go out and start this company.
And are there any
specific use cases or success
stories that you can share that highlight
the impact of their stories technology?
Sure. As I alluded to
before, this really isn't something new.
We didn't invent compressed air
at different scales. It's it's a you know,
using compressed air as a battery has been
used in industrial applications for over a
century. But it grid scale there's two
cases we can point to. Back in the 70s,
the world had a lot of nuclear power
plants and coal power plants on its grids,
and they needed it. Those those power plants
are not very flexible. You can't turn them up
and down very quickly. They're not designed for
that. And so the the world needed a technology
that could shift power that was made by a coal
plants in the middle of the night to middle of
the day without too much efficiency loss. And
so compressed air was looked to at that time
as a technology that could could do that.
So there was a plant built in Germany and
there was another plant built in Alabama, in the
United States, um, you know, power plant scale,
compressed air projects using subsurface geology
as a storage tank for compressed air. And those
two plants still operate today, which, you
know, after 30 and 40 years respectively.
So those give a lot of comfort.
Think to lenders to to stakeholders and projects
that compressed air can have a future. The
designs of compressed air plants today are
a little bit different at the surface
than than those plants. But nonetheless,
I think the fact that those plants have
worked well with their geology for 30 and
40 years goes a long way to de-risking this
and are huge success cases. As it turns out,
the the the availability of cheap natural gas and
the designs of combined cycle power plants kind
of conspired to eliminate the need for compressed
air after those plants were built. And so for 20
or 30 years, there's been no new compressed air
plants built in the world. But that's changing
again. Now the world is looking for emission less
technologies that can that can deliver that time
shifting energy storage and so compressed
air think has a bright future ahead of it.
Can you share some
key metrics or proof points that
demonstrate the effectiveness of. This solution?
Yeah, I think, you know,
there's lots of types of batteries.
There's lithium ion is
obviously one we think about or see
a lot about in the press. And to date, most
of the energy storage on our grids has been
in the form of large lithium ion battery
installation. Um, however, the challenge
with lithium ion is that it's it's it's really
good in the 2 to 4 hour duration. You know,
storage is a function not only of power capacity.
So how many megawatts can a system put out,
but also it's a function of how many hours or
how much time it can put that power out for. And
lithium ion is very economic. In the 1 to 4 hour
time frame, as you start moving beyond four hours,
it becomes very expensive to site lithium ion
installations and that's where compressed air
comes in. We're really not a technology
that's looking to compete with lithium
ion in those shorter durations. It's not a
it's not. Well suited for that economically,
but it is well suited for longer durations. You
know, eight hours up to multi-day storage is
really where compressed air shines both
on a cost basis and performance basis.
And so I think that's where I
would point to look or have you look is it
longer duration storage? And as it happens,
as you have more renewables talked about
needing storage on the grid, when you have
renewables, the more renewables you have
and the less fossil fuel power plants you want
to have on your grid, the more you really need
these longer duration assets that can deploy
power for eight hours, 12 hours, 24 hours.
And you mentioned that there's
a bright future for this technology,
but what are the obstacles and
roadblocks that you encountered?
Yeah, the the the
primary fundamental roadblock
was compressed areas that you can't
do it everywhere you need. You know,
you're taking atmospheric air with a compressed
air system and you're pressuring your consuming
electricity to pressure up large amounts
of air to very high pressure. And then you
send that down into the ground to be stored.
The best way to do that or the best geology
to do that in is a is a subsurface salt
formation. And I'm talking about table salt.
Salt that you can, you know,
consume. These salt formations exist here
and there throughout the world. And they're
really, in most cases, remnants of ancient oceans
that are long since gone and evaporated.
But they leave behind these really nice,
thick layers of salt. And you can drill into
that salt. You can drill a well similar to
an oil and gas well and start circulating
fresh water and leach out a void space deep
down below the earth's surface. Something,
you know, 1000ft deep, 3000ft deep. And you
can make a void that's maybe the size of a
skyscraper building. So a few hundred feet
tall, a couple of hundred feet wide. And what's
wonderful about putting that so deep in the
ground in salt is that you can hold very high
pressure air, you know, upwards of, you know,
100 bar or more in pressure without any risk of
leak off. And you can't really make a manmade
structure that can hold such vast quantities of
air and do it at high pressure. So that's great.
But the problem is those salt
formations do not exist everywhere. You
tend to find them in areas where you find oil and
gas. It's the same sedimentary geologic processes
create them. But that's to say they're really
not everywhere. So the biggest obstacle with
compressed air is finding the right geology to
site these facilities and finding that geology
in a way that or in a suitable location vis
a vis the the local grid. So do you have
electricity infrastructure nearby? Do you have
an electricity market that needs long duration
storage at this time? And lining those up
is really a process of it's a process of
elimination and it's serendipity when you find
locations that kind of check all those boxes.
And those little
blocks do you see for the future?
that's one I think, you know,
we will find locations. We have found
locations. I think that there's dozens
of locations in the US that are going to be
development ready. Another another roadblock
is really getting when you have a technology
like this, again, it's not rocket science.
We didn't invent anything,
but these are very large scale projects,
so they don't really lend themselves to small
pilot projects. You're going to find a facility
and you're going to build it. But to get that
built, you really have a lot of challenges on
the financing side, getting equity investors and
lenders comfortable that you're going to build a,
you know, inexpensive, large scale project
that's going to operate effectively for 25
or 30 years and get them comfortable enough
that they're willing to write you checks to
be able to do that. So financing is
a big challenge. It it shouldn't be,
but of course it is. It always is for
any big project, but particularly when
you have a technology that can't point to
25 examples of this can point to 2 or 3.
If you pass those roadblocks,
how would you how do you see your long
term vision for growth and expansion?
Yeah. Terrorist store. Think
you should. The best business model that
we should point to or think about for
terrorist or is really an independent
power producer which is a is a acronym
for a type of company that was common,
maybe started to be common 30
years ago in the United States.
These are really developers of
power projects. And by developer, I mean it's
a company that goes out, finds a location
to site, a facility puts capital at risks,
you know, several million dollars of capital
at risk and lots of time and resources to get
a site permitted, get a site engineered, get
the facility engineered line up investors,
and then, you know, and that process can
take several years on a single project.
It doesn't always work out. You know, there's
lots of permitting roadblocks that could stop
up a project before it ever gets off the ground.
But really getting a project to the point where
it's financed and ready to be constructed.
That's what a development company does. Now,
some development companies then stay in through
the construction phase and through the operational
life of the asset and as terrorists, or we
would love to do all of that. But fundamentally,
we're a developer and our hope is that over the
next, you know, ten years, we get ten projects
or more compressed air projects through the
development phase and into the construction phase
and have ownership and operational roles in those
projects as they move into their operational life.
Now, how do government policies and
regulations affects your operation and growth,
and what role do they have in the
renewable energy storage industry?
They have a big role now. The
government really wants to see renewables
rolled out, and to do that they need to see a
lot of energy storage go with that. And so the
the Inflation Reduction Act passed last year
in the United States provides a very healthy
subsidy to energy storage. You're able I think
most projects could count on probably a 30% tax
credit of their total capital cost being refunded
to the project through various mechanisms, um,
which is huge. And most importantly, the, the
IRA was, it was technology agnostic, meaning
whether it's a lithium ion system, a compressed
air system or some other battery technology,
as long as you didn't have fossil fuel emissions
in your system, you're able to qualify for that
credit. So it puts all of the technologies on the
same playing field, which is really healthy and
beneficial to us. Um, but of course it also means
all of our competitors also get that 30% credit.
So, you know, from a from that point
of view, it didn't, it didn't make compressed air
any more competitive particularly, but it does
make energy storage in general more attractive.
And are there any new features
or developments on the horizon that
users can look forward to from you?
I think the news you should look
for from terror stories, us announcing our,
um, our first project locations for the last year
and a half since we've been set up as a company,
we have been, uh, you know, looking at
the hundreds of sites in the US where you,
where geology allows you to site a project. And
then through our own efforts and through a study,
we've or a partnership we've commissioned
with consulting a consulting firm. Uh,
it was an engagement, not a partnership. Let me
just clarify that. But we have been working with
PR on the consulting side to narrow these
sites down and prioritize which sites are
really development ready, both from a physical
infrastructure point of view. So which ones have
nearby transmission that has availability on it
for a for a project to interconnect into? And then
from a market point of view, which markets can
really support the financing of a multi hundred
million dollar facility and not all markets in the
US can do that just based on the market structure.
So it's for instance, in the
desert southwest you'll have more success
probably getting a contract and offtake contract
for your energy storage facility that will support
a project financing than you would in Texas. In
the Ercot market, we've been sort of filtering
through and narrowing the list down to maybe
ten projects that are development ready. And
our efforts now have been on, uh, trying to get
right to develop projects on those locations
to get them into the development phase. So I
think our next announcements you'll hear from
terrorists are we have a project here, we have a
project there and we're ready to start developing.
Yeah. So we're coming to the
end of the conversation. So if someone
wants to reach out to you, maybe wants to
collaborate with you, how can they do that?
Always email me directly my
name or my email. Is Matt at Terrorist or
we have a website, we're on LinkedIn,
Twitter. So any of those features,
we'll we'll see any communications coming
in and happy to talk to anyone. You know,
if you have a geology you want to talk about,
we're always looking for new locations.
Um, so of course, and then
looking for partnerships various ways as
we get going here, we'll have need for lots of
different consultants, both on the engineering
and permitting side and then always looking for
investors. Of course, both current, you know, to
come in currently or investors down the road who
would want to participate in a project financing.
We are going to link all of
your social media and your website in the
description of the video. So everyone
who is watching or listening to us,
you can check out the description below and
find out what their story is doing and map
for the end. I would like to ask you what
advice would you give for people who want
to start working in cleantech? And of course, if
you have anything more to add, now is the time.
I guess as far as advice, I would
absolutely think that this the clean tech,
the energy transition space is huge. Think
it's the probably the biggest challenge the
world has faced and it's going to take hundreds
of years to to really make it happen, in my view.
-So getting into this space is,
you know, from a career perspective is a wise
choice. Think there'll be no shortage of need
for professionals, whether, you know, it's on the
engineering accounting or, you know, if you're
an oil and gas, for instance, being a land man
has a lot of value to projects that are wind
and solar projects. So, yeah, absolutely think
it's a wise choice. And I would encourage you to
focus on technologies, as kind of said before,
that work at scale because scale is what's
needed here. And yeah, I'll leave it at that.
Thank you. Thank you once again
for being a guest on New Perspective podcast.
Thank you very
much. Appreciate your time. Bye.
Well, we've come to an end of
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