Finally, a heat-to-electricity device powerful enough for the old-school energy giants

Startup Alphabet Energy is billing its new product, announced on Tuesday, as the world’s first industrial scale thermoelectric generator, which means it is powerful enough to be used at remote oil, gas and mining sites. Called the “E1,” the device uses the latest in material science and nanotechnology to capture waste heat from the exhaust stack of a diesel generator, and the material inside converts that heat into usable electricity.

When installed at a generator, say, up in the Canadian tar sands and far off the grid, the device can significantly reduce the amount of diesel fuel used. The company said it can produce 25 kilowatts electrical per a 1,000 kilowatt electrical engine, which would save a little over 50,000 liters of diesel fuel per engine annually.

Alphabet Energy's E1 electric generator that cuts diesel fuel use.

Alphabet Energy’s E1 electric generator that cuts diesel fuel use.

The startup, which makes a “thermoelectric material” that is at the core of the generator, was founded in 2009 by entrepreneur Matt Scullin at Lawrence Berkeley National Laboratory. Thermoelectrics are semiconductors that can convert heat to electricity when heat induces a change in temperatures of the thermoelectric material, causing the electrons to move from the hot to the cold side. The difference in the temperatures is what causes the material to produce electricity.

Thermoelectrics have been under development since the 1950s, but the problem has always been that many use rare and expensive materials. But innovations in nanotechnology and the use of new low-cost materials like silicon have enabled Alphabet Energy to produce a much more inexpensive but powerful thermoelectric material.

The thermoelectric material that converts heat to electricity in Alphabet Energy's generators.

The thermoelectric material that converts heat to electricity in Alphabet Energy’s generators.

The biggest issue for a startup like Alphabet Energy is that it’s a small venture-backed player and must convince huge oil, gas and mining companies to take a chance on buying a brand new product. But Alphabet Energy said it already has several customers that are testing and using the devices in the field.

Canadian natural gas giant Encana is one of Alphabet Energy’s lead investors. Other investors include Claremont Creek Ventures (Oakland-based VC firm), TPG’s venture arm TPG Biotech, and CalCEF Clean Energy Angel Fund. To date, Alphabet Energy has raised over $35 million in funding.

Scullin thinks thermoelectric materials are hitting a tipping point and could revolutionize the energy industry. If Alphabet Energy can scale and start selling these industrial electric generators in large volume, perhaps some day those materials could really change things.

And yes, we know what you’re thinking: selling energy efficiency products to the fossil fuel and mining industry isn’t without concessions when it comes to fighting climate change. But reducing diesel fuel usage does lower carbon emissions, though more importantly to oil and gas companies, it saves them money on fuel costs. However, Alphabet Energy’s materials could be used in a variety of cleaner applications some day. This huge energy market is just its entry point.