The industry sector is mainly made up of small and medium-sized factories which are invariably the biggest polluters. This is mainly because most of them do not have the capability for clean and sustainable energy which major corporations do tend to have at their disposal. Spanish start-up Solatom is working towards bringing a well-known technology to small and medium-sized enterprises (SMEs). One that generates steam via solar energy, a system currently used almost exclusively by large factories.
Concentrated Solar Power (CSP) systems generate energy by using mirrors that track sunlight which is then absorbed in order to generate energy. However, due to the economies of scale this technology is cost-effective primarily for large plants. Focusing on steam generation, which most factories need for several types of processes, Solatom’s founders have come up with a way to make this clean technology commercially cost-effective on a smaller scale. Which in turn enables SMEs to reduce their energy pollution and costs.
Miguel Frasquet, co-founder of Solatom, spoke with Innovation Origins about the motivation behind the start-up and their goals
What motivated you to set up Solatom?
The thing is that half of the founders, including myself, come from the field of CSP technology. This technology generates steam, and that steam is fed into a turbine which generates electricity. We knew this was only being used by huge factories. The thing is that four out of ten factories – at least in Spain, but probably pretty much everywhere else I think – use steam for their industrial processing.
Most people don’t realize it, but you need steam for everything. For example, you need it at dairy and meat factories, for preserved products, to dye clothing and in the production of plastics and drugs. In short, you need steam for almost everything.
So, we knew that a lot of industries use steam and we knew that by using CSP technology they could generate steam in an affordable and clean way. But the problem was that CSP is only economically viable on a massive scale. Which meant that it could not be utilized in some factories because they are too small. That’s why we chose to focus on these smaller factories. Which, even though they’re perhaps less well-known than their major counterparts, do account for between 92% and 98% of the industry. Large corporations represent just 2%. After plenty of research and designs, we managed to bring this technology to SMEs in a way which is cost-effective for them.
Well, after all the research, the final result is a pre-assembled CSP module that fits into a shipping container. Please note that most CSP plants are usually around two to three square kilometers in size. Our module generates 15 kilowatts. Consequently, you need to connect multiple modules in order to be able to reach the energy capacity that’s required. They connect to each other like a Lego bridge. What we achieved with this, is that we are cost-effective for small scale use. Since we ship everything pre-assembled to the client, we don’t need to send too many materials, equipment, or personnel. So, it’s a very attractive solution for SMEs.
Why are CSP plants so big?
Those massive plants are built because scale economics are needed to ensure that they are economically viable. That means that when you want to use the same technology in a SME, those scale economics don’t count anymore because the factory it is simply way smaller than the CSP plant. Which makes it far too costly for small-scale factories. What we did – instead of doing what it is normally done in a CSP plant, as in, building everything on site – was to pre-assemble everything. Then all we had to do was ship it to the client for them to use. The greatest challenge of course was actually designing something that could be pre-assembled.
So, if clean technology like CSP is generally only cost-effective on a large scale, we can presume that SME plants produce the most pollution?
Exactly. The reason why is because, in Spain, for example, you consume vast amounts of energy if you happen to be Coca Cola or Heineken. Yet you are located very close to a city because you have heaps of employees, which means your location cannot be isolated. This allows these companies to burn natural gas. Of all the fossil fuels, this is the cleanest one.
But in the case of SMEs, they are usually not located close to cities. Moreover, most of them are isolated form the natural gas grid. So, they are burning other kinds of fossil fuels. Like diesel, which pollutes the environment way more than natural gas, and is also far more expensive. So, those industries are the ones that have a real energy problem. Since they aren’t able to burn less toxic fossil fuel because there is no grid available there. Which is why we want to bring this clean solution to those companies.
Was it difficult to set up the start-up?
Yes, well, in our case we faced many challenges from the outset. One, which might come across as being a bit strange, came from our family and friends. We all had very good jobs before starting Solatom. So, they were not sure that we were making the right move. But they are very supportive now. The second challenge one was securing funding.
With Solatom, we are not doing something digital. We are making something physical which entails having it built at full scale. So, it was really difficult to be able to have an MVP (minimum viable product). You know, something that we can show the industry and that you can test. This was the reason why we, the founders, had to put a lot of money in ourselves, approximately €60,000 between us.
After that we constructed our first module. We needed to try it out, but we didn’t have anywhere to install it. When you approach potential clients, they don’t necessarily trust you right away. In any case, we negotiated with one company. We could install our solar module on their location, and they would only pay us if it worked. So, it was very risky. However, looking back I think it was the only way to procure our first client. Fortunately, the module worked.
What’s in store for the future of Solatom?
At the moment, we are booking a lot of success in Spain and are growing very fast. At least we were before the coronavirus crisis hit. We are also starting to look at other markets. We are evaluating Africa, because their energy systems are virtually nonexistent. Which means most of their factories are using highly toxic energy sources which are also very expensive. Solatom could really help out there.
You can read more IO articles about start-ups here.
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