Backstopping renewables: cold storage beats battery storage?

Phase change materials could be a game-changer for energy storage. They absorb (and release) coldness when they freeze (and melt). They can earn double digit IRRs unlocking c20% efficiency gains in freezers and refrigerators, which make up 9% of US electricity. This is superior to batteries which add costs and incur 8-30% efficiency losses. We review 5,800 patents and identify early-stage companies geared to the theme in our new 14-page note.


Refrigerators and freezers comprise 9% of the US electric grid, of which half is in the commercial sector, across 4,200 warehouses, 40,000 supermarkets and 620,000 restaurants. This report argues that a new class of materials, Phase Change Materials (PCMs), can effectively store excess renewable energy as coldness in these fridges and freezers, improving their efficiency by c20% and without requiring power prices to increase.

The energy economics of cold storage are explained on pages 2-4, outlining the energy consumption of cold storage facilities as function of different input variables (which will also help you understand how to save energy at your fridge-freezer at home) .

Phase change materials are explained on pages 5-6, explaining what they are, how they work, and how they can lower energy consumption by c20% at a typical fridge/freezer.

The economics are modelled on pages 7-8, showing an 8.5% IRR under recent costs and power prices, rising into double digits with a CO2 price, and above 30% with recent deflation in the costs of PCMs.

A comparison with battery storage is provided on page 9-10, showing a clear preference for PCMs. Batteries decrease efficiency and raise electricity costs. PCMs increase efficiency and do not raise electricity costs. Batteries have further challenges.

Who are the leading companies commercialising PCMs? We answer this question on pages 11-14, by reviewing 5,800 patents. We find promising venture-stage and growth-stage companies in the space, plus listed companies in the capital goods, materials and automotive sectors.