Waste Heat: The Next Big Thing?

 

 

 

Most people are aware that the U.S. is the world’s largest user of energy, but what isn’t widely understood is that we are also the world’s largest waster of energy.  In fact, we waste more energy (57%) than we use![i]

No, this isn’t a jeremiad about oil addition or over-consumption, but rather about the engineering inefficiencies in our industrial, utility, and transportation equipment.  Over half the energy input (in the form of natural gas, petroleum, coal, or electricity) used to drive factories, power plants, and vehicles is being lost, rather than being converted to useful energy, and this loss is broadly referred to as “Waste Heat.”  As one can imagine, this represents a massive potential market opportunity, and the waste heat space has seen numerous new entrants in the past few years seeking to develop a ‘killer app’ to improve our energy usage efficiency.

Waste heat recovery efforts can broadly be divided into two types.  The more traditional are fluids-based heat exchanger technologies that utilize a process known as the Rankine Cycle.  The Rankine Cycle is a closed loop system that converts heat from an outside source into useful work, which is usually used to generate electricity (see diagram below)[ii]

Rankine Cycle

Companies such as Ormat, Ener-G-Motors, ElectraTherm, and Recycled Energy Development are pursuing this market.  In recent new, in November, 2012, Renault announced that it was exploring the use of a Rankine-cycle systems to recover waste heat in long haul trucks to power auxiliary electronics.[iii]

Thermoelectrics is a newer approach to waste heat.  The thermoelectric effect refers to the phenomenon where semi-conductors use a temperature difference to create electric current.  In other words, thermoelectrics are just like solar panels, except they use heat instead of sunlight to create electricity.  This technology has been employed by the space program for many years—the radiation shields of space probes reach high temperatures and thermoelectric panels are placed behind them to generate power.

Thermoelectric

source: Dresser-Rand[iv]

Startups such as Alphabet Energy and Phononics Devices are seeking to develop low-cost applications for thermoelectrics that can be integrated into industry and transportation.  One challenge is that thermoelectrics require relatively high temperatures to be effective, eliminating some potential applications.  However, these devices are simpler than heat-exchanger systems and can be installed on a smaller, more modular basis.

Waste heat is still an immature market, and it is far from clear who the ‘winners’ will be in this space.  It will be interesting to see who is able to develop the best solutions to capture this market.

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