(Bloomberg) -- A new partnership between a global energy company and a battery startup that relies on hot bricks could help address Europe’s energy crisis and cut carbon emissions. 

Rondo Energy has developed a “heat battery” that converts renewable energy into the high temperatures that can power industrial processes. The startup has signed a deal with Portugal-based energy company EDP, which has agreed to power up to 2 gigawatts of heat battery installations from Rondo across Europe starting in 2025.

“This is a slingshot moment for us,” Rondo’s founder and chief executive John O’Donnell said. 

Bay Area-based Rondo superheats clay bricks using the same elements found in a toaster. The bricks can reach up to 1,500C (2,700F) and one of them can hold as much energy as a Tesla Model X. Building a system at scale can provide enough heat energy to power a factory or run a steam generator. 

The industrial sector is one of the hardest to decarbonize because it’s heavily reliant on fossil fuels to generate high heat needed to make things like steel and cement. Heat batteries could help break that bond, and Rondo says its technology can cut industrial emissions by 80% while also providing grid stability by making use of and storing excess renewable power.

The company’s batteries can unlock renewable energy’s potential by storing energy over time, making an industrial solar project 10 times more powerful, O’Donnell said. Rondo has received backing from Microsoft Corp., Rio Tinto and Aramco, among others. The partnership with EDP will be the company’s biggest deployment — what O’Donnell calls “bringing this new tool in the toolbox to scale.” 

EDP will develop decentralized and large-scale solar and wind parks that will be co-located with a Rondo battery to supply thermal energy to existing customers

Heat batteries could help insulate the manufacturing sector from the crisis sparked by Russia’s war in Ukraine, which has driven up energy costs. The technology can help smooth price volatility and bring predictability to companies’ budgets, said Vera Pinto Pereira, an EDP executive board member. 

The industrial and energy sectors face an uphill battle to reduce reliance on fossil fuels. Together, they account for more than half of all greenhouse gas emissions globally, according to the research firm Rhodium Group. The industrial sector in particular has few good options available currently.

Rondo’s technology is still relatively unproven at scale, with only one facility in California that supplies two megawatts of thermal energy to an ethanol plant. Hydrogen could be a competitor to heat batteries since it can be burned and produced without greenhouse gas emissions. It too still has a number of hurdles to being produced and deployed at commercial scale, though. 

O’Donnell said EDP and Rondo were “made for each other” with their decarbonization aspirations. EDP has pledged to be 100% renewable by 2030. The partners are currently deciding which contracts they will supply first, but priority will be given to energy-intensive customers. The companies have not specified how much costs could decrease.

“This really is a new avenue of growth by supplying clean industrial heat at a large scale with affordable energy that is powered by renewable sources such as the wind and sun,” said Pinto Pereira. “It really makes industrial decarbonization possible and profitable.”

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