Exergy3 Raises $12.6M to Turn Surplus Power into Clean Heat

Jan de Vries · 2026-04-21

Exergy3, a CleanTech startup based in Edinburgh, just closed a $12.6 million Seed round to tackle one of the biggest challenges in the energy world: turning wasted renewable electricity into clean, usable heat for heavy industry. The company's ultra-high temperature thermal energy storage tech is designed to solve two problems at once—industrial decarbonization and grid balancing. ### The Funding Details The round was led by Axeleo Capital, with backing from Bavaria-based public VC Bayern Kapital and Singapore's Kibo Invest. Existing investors like Scottish Enterprise, Zero Carbon Capital, and Old College Capital (the University of Edinburgh's venture fund) also chipped in. That's a solid mix of European and international support, which says a lot about the potential here.  ### Why This Matters Heavy industry accounts for over 20% of global energy consumption, and most of it still runs on fossil fuels. That's a huge chunk of emissions. But here's the twist: renewable energy like wind and solar is often generated when demand is low, leading to curtailment—basically, we pay to waste clean power. At the same time, industries need high-temperature heat around the clock. Exergy3 bridges that gap. Guillaume Sarlat, Venture Partner at Axeleo Capital, put it well: "Decarbonising heavy industry... is arguably one of today's most compelling climate hardware venture capital opportunities in Europe." He highlighted how Exergy3 uses curtailed or even negative-priced renewable electricity to store heat at ultra-high temperatures, then delivers it as low-cost, zero-carbon heat to factories. ### How It Works Exergy3's modular thermal energy storage units are surprisingly compact. They take surplus renewable electricity—like wind power that would otherwise be wasted—and convert it into heat, storing it at temperatures ranging from 122 degrees Fahrenheit all the way up to 2,192 degrees Fahrenheit. That's enough to cover everything from steam generation to direct industrial heating. And because the units are modular, they can be installed quickly with minimal infrastructure changes. ### The Bigger Picture In the UK alone, grid balancing cost $3.2 billion in 2024/25, largely because of the mismatch between renewable supply and demand. That's a lot of money spent on managing waste. Exergy3's approach turns that waste into a resource. Markus Rondé, the CEO, summed it up: "Industry needs reliable, high-temperature heat, while large amounts of renewable electricity are going to waste. Exergy3 brings them together." ### What's Next With the fresh capital, Exergy3 plans to scale manufacturing, double its headcount by the end of the year, and open a Munich office this quarter as it expands into Germany. The goal is to move from pilot projects to commercial deployment as quickly as possible. - **Key takeaway:** This isn't just about one startup. It's about a smarter energy system where renewables and industry finally work together. - **Why you should care:** If you're in clean energy, manufacturing, or climate tech, this is a trend worth watching. Monika Steger, Managing Director of Bayern Kapital, added, "The decarbonisation of industrial heat is one of the most critical challenges in the energy transition. Exergy3's technology offers a scalable, cost-effective solution."