Edinburgh’s Exergy3 raises €11.4 million to turn surplus renewable power into clean industrial heat

Exergy3, an Edinburgh-based CleanTech startup specialising in ultra-high temperature thermal energy storage solutions, has raised €11.4 million (£10 million) in Seed funding to scale its proprietary technology, addressing industrial decarbonisation, grid balancing and energy security.

The round was led by Axeleo Capital, with participation from Bavaria-based public venture capital investor Bayern Kapital and Singapore-based Kibo Invest. Existing investors Scottish Enterprise, Zero Carbon Capital and Old College Capital, the University of Edinburgh’s in-house venture investment fund, also participated in the round.

Guillaume Sarlat, Venture Partner, Axeleo Capital, said, “Decarbonising heavy industry – accounting for over 20% of global energy consumption and still largely fossil-based – is arguably one of today’s most compelling climate hardware venture capital opportunities in Europe. Exergy3 uniquely leverages curtailed and negative-priced renewable electricity, storing it at ultra-high temperatures to deliver low-cost, zero-carbon heat to industrial customers.”

Founded in 2023, Exergy3 is a CleanTech spinout from the University of Edinburgh. The company is on a mission to revolutionise the clean heat market by providing scalable, affordable and sustainable sources of clean industrial heat that enable the global transition to a low-carbon future.

According to the company, the strain on the European energy system is intensifying. “In the UK alone, £2.7 billion was spent balancing the grid in 2024/25 – driven by a growing mismatch between supply and demand, as renewable generation increasingly exceeds what the system can absorb in real time. The result is a costly paradox: large volumes of low-carbon electricity are curtailed, even as system costs rise. At the same time, industry faces mounting pressure to secure reliable, affordable energy while reducing emissions,” mentioned the company in the press release. 

It states that industrial heat accounts for a significant share of global energy demand and emissions, yet remains structurally difficult to decarbonise because it requires high, continuous temperatures across a wide range of processes. At the same time, more renewable electricity is being curtailed as the system finds it challenging to integrate generation in real time.

Exergy3 claims to address this mismatch. Its technology converts surplus renewable electricity, such as curtailed wind power, into high-temperature heat for industrial use. This turns excess generation into a usable energy source rather than a waste of energy.

Markus Rondé, CEO of Exergy3, said, “These are two sides of the same problem. Industry needs reliable, high-temperature heat, while large amounts of renewable electricity are going to waste. Exergy3 brings them together – turning surplus renewable power into reliable, low-cost heat for industry. That means lower emissions, lower energy costs, and a more resilient energy system. This funding allows us to move rapidly from pilot to commercial deployment.”

Exergy3 mentions that its system is designed for rapid integration across industrial environments. The modular thermal energy storage units convert renewable electricity into high-temperature heat, delivering process temperatures from 50°C to 1,200°C while remaining compact and easy to install with minimal infrastructure requirements. 

This flexibility enables the technology to suit various industrial processes, from direct heat applications to steam generation, thereby making it suitable for a wide range of energy-heavy industries.

With the fresh capital, the company intends to scale manufacturing capacity, expand the team, and enable broad deployment across industrial sites. Exergy3 plans to double its headcount by the end of the year. It will also open a Munich office later this quarter as part of its expansion into Germany. 

Monika Steger, Managing Director of Bayern Kapital, said, “The decarbonisation of industrial process heat is a key lever for the transformation of energy-intensive industries and at the same time a highly relevant growth market for climate tech in Europe. Exergy3 is developing a technologically promising solution at the intersection of energy, industry, and decarbonisation.

“As a VC investor, we see significant commercial potential here. The fact that Exergy3 intends to further develop its technological potential from Munich in the future also underlines Bavaria’s attractiveness as a location for industrial innovation.”

In May 2023, Exergy3 spun out from the University of Edinburgh and secured €4.1 million (£3.6 million) in grant funding from the Department of Energy Security and Net Zero to build a full-scale demonstrator at Annandale Distillery.

In 2024, the company announced the closure of its €1.1 million (£1 million) pre-Seed funding round led by Zero Carbon Capital with participation from existing investors Old College Capital and Scottish Enterprise.

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