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Tom Heintzman: Welcome to The Sustainability Agenda, a podcast series focusing on the evolving complexities of the sustainability landscape. I’m your host, Tom Heintzman. Please join me as we explore today’s most pressing issues with special guests that will give you some new perspectives and help you make sense of what really matters.

Rob Alexander: If we stay focused on allowing the innovation to go at the fastest pace possible, there’s no doubt in my mind that we can in fact continue to grow our economies and leverage tools like AI, but also do so in a way that is not going to hurt our planet. It can also do it in a way that distributes that wealth and that improvement globally.

Tom Heintzman: Welcome to our multi-part series on the role of electrification in the transition to clean energy. Like last year, we’re producing a number of episodes in the lead up to CIBC’s 2nd Annual Electrification Summit taking place on April 23rd, 2025. Throughout each episode, we’ll explore key issues enabling our electrified future, as well as the opportunities and challenges for participants along the electrification value chain. On today’s episode, we’ll discuss battery storage systems and the critical role they play in electrification and the energy transition. As we’ve discussed previously, there are a lot of changes happening at the edge of the grid. The rise of renewable energy, electric vehicles, and smart technologies are leading to a more decentralized and dynamic energy system. This adds complexity to how electricity grids are managed. At the same time, the increase in renewable energy, which in the jargon of the industry is intermittent as opposed to firm or baseload, creates issues for grid operators as they cannot be sure how much generation will be available at a given time. Battery storage systems enable the efficient use of energy resources by storing energy when it is not needed and releasing it when it is, which improves grid reliability, which improves grid reliability and stability. Today, we’ll explore the advances in battery storage technology, the use cases for zero emissions, long duration energy sources to meet rising electricity demand and where the industry is headed. I’m very delighted to welcome my guest, Rob Alexander. Rob is the founder and CEO of AlumaPower, a Canadian based clean tech startup. Rob has over 30 years of experience in the automotive and finance sectors with a focus on startups and turnarounds. His engineering and technical subject matter expertise has naturally led him to product development in technology intensive sectors. Prior to his time in automotive, Rob worked as a blue chip company consultant from McKinsey and investment banking on Wall Street. Rob’s a long time friend. Good morning, Rob, and welcome to the show.

Rob Alexander: Thanks, Tom. It’s great to be here.

Tom Heintzman: Rob, let’s start by setting the stage for our listeners. Could you begin by giving us an overview of the battery technologies that are widely deployed today, including their challenges and limitations? I know that’s a lot to cover in just a few minutes, but if you could help give us a high level categorization of the various technologies, that would be helpful.

Rob Alexander: Sure, I wouldn’t call myself an expert in all of them, but I’ll try. I think what most of us are familiar with today is lithium ion batteries. That’s the battery that’s in our phones and our EVs and in our laptops. And lithium ion is a rechargeable battery. Basically, you plug it into a wall and you get your electrons out of the wall. It’s been around for about 35 years now, and we’ve pretty much perfected it both from a performance-wise perspective and also cost-wise. Now there are applications that lithium ion is not suited for. Because it’s rechargeable, it relies on you having a grid connection. The other issue is duration of your phone, your EVs and your laptops. Typically they only last for four to five hours before you need to recharge. And another issue that everybody knows about lithium is safety. If it catches fire, it’s extremely difficult to extinguish that fire, which is one of the reasons why they limit lithium ion on planes. Now there are many applications that require days to hundreds of hours of duration. So what we really need is new chemistries that can get to that next level of performance and lower costs, lower duration and higher safety. Now I’m not going to go into some of the improvements in lithium ion. There’s a chemistry called lithium iron phosphate, which is safer, but not as energy dense. There’s sodium ions, there’s solid fuel cells, and they’re basically incremental improvements in that duration and potentially in cost. The category of batteries that show the most promise, in our opinion, are metal air. And what’s different about them is they have an anode that’s made out of metal. So the three that are on the market today are iron, zinc, and of course, I’m going to talk about aluminum. And they’re very similar in many ways to internal combustion engines because these batteries breathe air. And so by using air as an input, you get much higher performance and much lower costs because one of the reactants that you’re using actually doesn’t cost you anything. You get it for free in the form of oxygen from the air. And this is what we’re doing with our aluminum air technology. And in particular of those three options, iron, zinc and aluminum, aluminum is the most energy dense. So it actually has two and a half times more energy than the equivalent volume of gas and diesel.

Tom Heintzman: Okay, Rob, so let’s double click on that. You mentioned that aluminum power’s breakthrough technology reinvents the aluminum air battery as a zero emissions, long duration energy source. How exactly does it work? Could you explain how you extract electricity from aluminum and what advantages this technology may have over others?

Rob Alexander: Yeah, sure. You know, if you think about where we produce, where we smelt aluminum in Canada, it’s largely beside hydro power dams in Quebec. And the reason for that is you’re injecting a large amount of electricity into the aluminum, so much so that the industry actually calls it solid electricity. The ability to extract that energy from aluminum was actually invented back in the 60s. And essentially what you’re doing is you’re electrochemically reversing the smelting process by corroding away the aluminum with the help of a water-based electrolyte and then that air and those two release the energy. So the aluminum is actually being consumed in the process. Now the traditional aluminum air battery relied on a stationary plate of aluminum. This design never really commercialized because it required very high purity aluminum, which is really, really expensive. It also had usability issues. You couldn’t start it again after you stopped it. And it was really, really difficult to refuel. The key to AlumaPower’s invention is that we take that aluminum and we formed it as a fuel disk, which then spins inside of our device. This allows us to use a much lower grade impure form of aluminum, actually post-consumer scrap. And so that gets us to a cost that now is very, similar to gas or diesel. We’ve also, by spinning this anode, we’re able to stop and start this at will and made it very easy to refuel our devices. It’s kind of like putting a CD in a CD player or toast into a toaster. Pretty much, if you think about it from the point of view of internal combustion engines, we knew gasoline was explosive, but wasn’t very useful to us until we invented the internal combustion engines. We essentially view ourselves as having done that, inventing the galvanic generator, which now can harness all this energy that’s available.

Tom Heintzman: Rob, when the electricity gets taken out of the aluminum, what’s left over and what do you do with that?

Rob Alexander: Great question. The byproduct is something called aluminum trihydrate, AlOH3. And what’s nice about that is it has a lot of value. And so it’s used, you know, our first installation was in Toronto last summer. We used it as a flocculant for wastewater treatment, but it has even higher value uses like making ceramics and glass, also as a fire retardant. So that’s our off product and the way we’re approaching the market, that actually helps us be even more cost effective because it has high value uses in multiple areas.

Tom Heintzman: Fascinating. Okay, let’s get really tangible. So where are you seeing the early use cases for your technology where it can be deployed and delivers, you know, the benefits that other types of batteries would not be able to provide?

Rob Alexander: Well, if I can survey, we really have, we call these galvanic generators a platform technology because it’s very similar to internal combustion engines. And so it can be used for cars, it can be used for boats, and it can be used for stationary power. So for EVs, it essentially is a range extender. It would allow us to get over a thousand kilometers in our vehicles, which then in turn allows us not to have to build as much charging infrastructure. In marine, it is very compelling because not only in marine can we use the oxygen from outside, but we can actually create our electrolyte from either salt or fresh water. So in marine, one of the challenges for becoming cleaner and electric is the resistance of that boat goes higher as you get higher speed. And so you really need a power plant like our galvanic generator in order to make that possible. The other advantage we have is aluminum is basically infinite energy storage. So you can store our fuel disks for 10 years and they’ll work just as well after 10 years. And that’s really different from something like diesel, which does expire and only has a lifetime usually of about a year. So we’re really seeing a lot of demand for remote power generation for our technology. And that’s likely to be the place we go first.

Tom Heintzman: What about backup power? Where to replace a diesel generator, you could have a big hunk of aluminum sitting where you have your current diesel generator and it could provide the electricity in the case of a blackout.

Rob Alexander: Exactly. That is a perfect application for us because again the fuel lasts forever. We have no issues operating remotely and it’s a very simple plug and play application. And we’re seeing lots of opportunities for that, especially as we see these major transitions going on for electrification in the market.

Tom Heintzman: Okay, I’d love to test another use with you and that’s data centers. Electricity demand is forecasted to increase exponentially or at least significantly driven by electrification trends and the rise of AI and data centers. In the US alone, data center energy use between 2024 and 2030 is expected to increase by 400 terawatt hours at a CAGR, an annual growth rate of 23% according to your alma mater and mine, McKinsey. This demand growth creates pressure across the electricity value chain to meet the AI energy supply gap. Can AlumaPower’s platform technology help address this gap? Could it provide either backup or operating power for data centers? And if so, when would you expect it to be cost competitive for hyperscalers?

Rob Alexander: The answer is yes and yes and yes. So this is our primary market right now is to use our galvanic generators as backup power for data centers. And what’s happening is it is explosive demand. And the issue what’s really driving people is time to market. It’s about getting your model out there and deployed so that you can gain a large market share. And the issue is, even if you wanted to go to the grid right now and build some of these gigawatt scale data centers, your five plus leads to connect to the grid. Your over four years now for natural gas turbines. So what’s happening is these hyperscalers are really turning to other options to get these data sites up quickly. Now, the fastest today, the fastest option is actually solar. And solar with a, call it a four hour battery energy storage system, like a lithium ion system or lithium ion phosphate system. And these are quite cost effective. They can be deployed in one to two years. But of course, they lead to another issue. The sun doesn’t always shine. And there are weather events that will cause potentially the sun not to shine for three, four, or five days. And if I’ve only got four hours of battery storage, that’s not going to work because we have this wonderful demand for ChatGPT. You can’t let the lights go out in these data centers. And so, AlumaPower and our galvanic generator provides zero emissions, long duration backup to fill in when that solar under produces or when there’s an outage. We essentially take the long tail of demand and allow these data centers to cost effectively operate 24-7, 365 days a year. And what it means for the hyperscalers and for the data center providers is a huge cost reduction because if they were to actually try and just build enough solar or add enough battery electric storage, they would about 30% more overall for their energy costs versus moving to us. And you might kind of be surprised because, you know, we just started production of this last year. What helps us is our device is largely injection molded. Coming from the automotive industry, it’s a very well-known process. And what’s nice about injection molding process is you can come down the cost curve very, very quickly. So in essence, our overall system for the hyperscalers now will be very cost competitive with a natural gas generator, but with zero emissions and will be available a lot faster than the four to five year lead time that exists for natural gas generators.

Tom Heintzman: That’s fascinating. Well, if AI is one hot topic these days, another is tariffs. So I’d like to talk to you a bit about that. Your technology requires aluminum. In October 2024, Canada imposed 25% tariffs on steel and aluminum products from China. And more recently in the past month, President Trump imposed 25% tariffs on Canadian aluminum and steel with the potential for increased tariffs. Notably, tariffs are altering the economic landscape for these metal products with significant implications for supply chains. Do these tariffs alter your business model and how is AlumaPower future-proofing its business?

Rob Alexander: Yeah, we’re actually quite fortunate in this dimension. And the reason is the way we view our ecosystem working is very localized closed loop ecosystems. So we’ll be taking scrap locally from the local market and then using that as a fuel. We don’t see much of a model where we’re transitioning or we’re trying to ship fuel across borders. Moreover, if you go to the US, and I just got back from ARPA-E Conference last week for the Department of Energy. What US is talking about in Canada is energy security. And right now, the US is exporting a huge amount of their scrap to China. And essentially what we’re proposing to them right now is, hey, redirect that towards our galvanic generators, and you’ve got enough energy to build 20 of these gigawatt scale data centers, all within your own borders, and all in a way that is cost effective and also has zero emissions.

Tom Heintzman: Wow, honestly, this is all so fascinating. So I’d love to keep going, but in the interest of our listeners’ times, this is the last question. I’d just like you look into the future and where do you see storage headed in the next five to 10 years? And what do you and your industry peers need to enable that vision, whether it’s from a government policy perspective or a financing perspective or any other contingencies to your vision?

Rob Alexander: There’s a huge race now to develop and commercialize new battery chemistries that will feed the next leg of global green growth. We think that metal air will be a winning category. And depending on the choice of that metal, there’ll be different use cases and there’ll be multiple winners. I think one of the things that’s key is for governments and policies is we need to adopt an all of the above approach to meet the massive demand growth that we’re going to see. I think we’ve got to be very careful not to try and pick winners in the air and make sure that we’re using fundamental physics and practicality to drive what we’re doing. I think some governments in some places, we’ve decided to try and turn hydrogen into a dominant player. Hydrogen has a place, but we’ve got to be careful that we don’t try and make something out of something that’s not possible happen from a safety perspective, from a cost perspective. Personally, I am massively encouraged. My kids ask me, what about climate change? It’s doomsday. I just got back again, as I said, from ARPA-E, there are so many fantastic, cost-effective technologies that are coming to bear right now. And if we stay focused on allowing the innovation to go at the fastest pace possible, there’s no doubt in my mind that we can in fact continue to grow our economies and leverage tools like AI, but also do so in a way that is not going to hurt our planet. It can also do it in a way that distributes that wealth and that improvement globally. So that’s probably the subject of another whole podcast, but I’m encouraged and stay tuned. You’re going to see a lot of breakthrough technologies that are cost effective coming to market, not unlike ours.

Tom Heintzman: And Rob, you mentioned ARPA-E a couple of times there. For our listeners, ARPA-E is the VC arm for energy of the US government. And many people may have heard of DARPA, which was the defense equivalent and resulted in many innovative breakthroughs in the defense industry. And ARPA-E is the equivalent for energy and ARPA-E had its annual conference last week in Washington. So Rob, thank you so much for taking time to join the show today and thank you to the listeners for tuning in.

Rob Alexander: Thank you, Tom. Really appreciate the opportunity.

Tom Heintzman: If you would like to learn how electrification trends will impact your business, join us for CIBC’s second annual electrification summit on April 23rd, 2025 in Toronto. The summit will bring together leaders from across the electrification value chain, including developers, generators, utilities, heavy consumers, some of the largest investors and lenders in the space, as well as government and regulators. To register, please contact your CIBC relationship manager. Please join us next time as we tackle some of sustainability’s biggest questions, providing you different perspectives to help you move forward. I’m your host, Tom Heintzman, and this is The Sustainability Agenda.

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Battery storage systems: The innovations empowering our clean energy future

Tom Heintzman

MD & Vice-Chair, Energy Transition & Sustainability

CIBC Capital Markets

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