Air Conditioning Has a Big Climate Impact. This New Technology Could be a Game Changer

Last September, the Western U.S. was hit with a 10-day heat wave that broke temperature records across the region, including in California. Air conditioning surged and with it, a record demand in electricity that brought the state’s grid to its brink. Experts feared that the California Independent System Operator, CAISO, which runs 80% of the state’s electric system, would be forced to resort to rolling blackouts—with potentially life-threatening consequences. Instead, California managed to barely avoid that scenario by pleading with commercial and residential electricity users to cut their demand and relying on large-scale battery storage.

Extreme heat waves like this will continue to test the limits of the country’s electricity grid—posing both a threat to our energy systems and increasing our reliance on fossil fuels to meet demand. Buildings are the single largest energy-consuming sector in the U.S. They use 39% of the nation’s total energy and 74% of its electricity. On average, air conditioners and electric fans account for approximately 20% of a building’s total energy consumption. But with climate change, that is set to increase. Cooling is the fastest growing use of energy in buildings, with some estimates suggesting that energy demand for space cooling will more than triple worldwide by 2050—consuming as much electricity as China and India combined do today.

If—or when—the 2023 scenario repeats itself, two hotels in California will be among the last to suffer the perils of surging electricity demand from air conditioning. Normally, hotels use electricity to power large chillers that cool down water in real time and pump it through the buildings to lower temperatures—an energy-intensive process. Last summer, the Beverly Hilton and the Waldorf Astoria in California tried something new. They built a shared system to cool their buildings that not only lowers energy costs and reduces strain on the grid during peak hours, but also reduces the buildings’ carbon emissions.

The 1.4-megawatt-hour IceBrick™ thermal storage technology, developed by the startup Nostromo Energy, uses water to generate ice during periods of low energy demand, typically when the grid is being powered by renewable energy. The stored ice can then be utilized at times of peak demand like at night to cool the system, reducing the need to use energy-intensive chillers. The system is managed by cloud-based software that optimizes its operation in real time, and is a closed-use system, meaning the water is constantly recycled. Nostromo estimates that the hotels will save 30-50% on their cooling costs and reduce carbon emissions by about 200 metric tons annually—the equivalent of driving more than 512 thousand miles in a gas-powered car. And because cooling is supplied by the ice rather than electricity, the system also helps reduce strain on the grid during outages by not pulling from its limited power supply.

Part of the challenge of decarbonizing the grid is spreading out electricity use so that not everyone is using energy at the same time. Currently many electricity grids rely on so-called “peaker plants”—high-emitting power plants that provide electricity when demand surges. With increased demand for AC, more carbon dioxide is emitted from the grid during the summer than at any other time of year.

“Air conditioning is the enemy of climate change,” says Yoram Ashery, Nostromo’s CEO. “During peak hours around half of all electricity goes to AC, and we are holding onto a lot of these fossil fuel emitting power plants to be able to fuel this demand.”

Read more: AC Feels Great, But It’s Terrible for the Planet. Here’s How to Fix That

Simply having more renewable energy on the grid won’t solve this issue—that energy has to be stored for when it is needed. For example, energy demand tends to be at its highest during early evening hours when people return home from work, coinciding with a drop in energy generated from renewables. To bridge this gap, people have turned to storage solutions like lithium-ion batteries. But such batteries pose a fire and safety hazard, and extraction of lithium has well-documented environmental and human rights implications, says Xiaobing Liu, a research and development scientist who runs the thermal energy storage group at Oak Ridge National Laboratory. Plus, “even if we can use all the existing resources, there isn’t enough to even supply the needs in California,” he says.

Thermal energy storage—trapping heat or cold in materials like ice, bricks, or sand to use later—such as Nostromo’s IceBrick system, is a promising alternative solution. Adopting such systems can also provide big carbon savings. According to one study, adopting thermal energy storage systems in places like Flagstaff, Arizona could reduce the city’s carbon emissions by up to 34%.

“If you think about the big picture—more renewable power into the grid, more adverse weather events, more electrification of our economy—thermal energy storage plays a very significant role, and I think it could become a standard feature in the near future,” says Liu.

But it isn’t just warmer areas that could benefit. The 43-story Goldman Sachs headquarter building in New York City installed an ice-based thermal energy storage system in 2014 that makes ice during off-peak hours to chill the building. Goldman Sachs reported that the system is 30% more energy efficient, saving them $50,000 per month on summer energy bills.

Systems based on converting water to ice, like that developed by Nostromo, are just a small fraction of possible thermal energy storage systems, says Alex Campbell, director of policy and partnerships at the Long Duration Energy Storage council (LDES), a U.K. based nonprofit advocating for energy storage solutions to accelerate carbon neutrality. Companies are also looking into deploying solar-sourced heat on molten salt, specialized bricks, and superheated particles. According to a 2022 report by LDES and the consulting firm McKinsey, thermal energy storage is a much more cost-efficient and low-carbon way to heat buildings rather than conventional systems that rely on a steady electricity supply. “The size of the global prize is huge, and the decarbonization potential is massive,” says Campbell.

Read more: These 5 Charts Show Just How Much the U.S. Relies on Air Conditioning

Despite enthusiasm for thermal energy storage, the technology has been slow to get a footing due to a lack of funding, uncertain regulatory frameworks, and general unawareness of such systems, says Campbell, but this too could be on the brink of changing. As more renewables get added to the grid, energy prices are likely to start reflecting the intermittent nature of renewable energy, becoming cheaper when renewable energy is abundant and more expensive when it is not For companies who can spread out when they use energy to take advantage of low energy prices, things like thermal energy systems will also become economically much more attractive, he says.

The International Renewable Energy Agency has stressed the need for more investment in developing thermal energy storage technology and for measures to boost the market for these solutions. So far, large-scale commercial and industrial customers like office buildings, or warehouses, have been most likely to adopt these systems, says Campbell. That’s because in most places, like the U.S., commercial and industrial buildings’ electricity is often charged based on a time-of-use rate, which gives them significant savings when they shift their electricity usage to non-peak hours.

For now, Nostromo is in the final process of negotiating a $189 million loan from the U.S. Energy Department to install IceBrick systems in some 120 buildings over the next three years in California and other states. And last year, the IceBrick became the first thermal energy storage system to qualify as a demand response resource from the California Public Utilities Commission. Nostromo’s CEO Ashery imagines that in the future, including energy storage in building design will be as ubiquitous as parking. “Thermal energy for heating and cooling is half of the energy consumption of a building,” he says. “We believe it is going to be a standard in the future to include energy storage in buildings. There are so many benefits to it, it just makes sense.”