Pitch Day Transcript

Halliburton Labs Finalists Pitch Day: AtmosZero’s COO Ashwin Salvi

Thursday, March 14, 2024 — New Orleans, Louisiana. AtmosZero co-founder and COO Ashwin Salvi pitched Boiler 2.0 to the Halliburton Labs judging panel, then fielded questions on differentiation, business model, cold-climate performance, and what’s next after the company’s Series A.

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The Pitch

Moderator
Our first pitch comes to us from AtmosZero, a Fort Collins, Colorado‑based company. AtmosZero is decarbonizing steam production for process heat with its development of modular heat pumps to generate industrial steam up to 200°C, covering 50% of the industrial heat market. The modular design allows customers to eliminate on-site construction costs. Here is COO Ashwin Salvi to tell you more about it.

Ashwin Salvi, COO & Co-Founder, AtmosZero
Hi, I’m Ashwin Salvi. I’m one of the co-founders and the Chief Operating Officer of AtmosZero, where we focus on industrial-scale decarbonization. At AtmosZero, we’re delivering low-cost decarbonized steam for industry. We replace fossil-fueled industrial boilers with a drop-in electrified steam boiler that eliminates on-site carbon emissions.

So why steam? Turns out steam touches every part of our life — from the food and drinks we had at dinner last night to the clothes you’re wearing today. Steam is a ubiquitous energy carrier that cuts across many different industries. In fact, it accounts for 50% of process heat in industry, which results in 8% of global primary energy use, or 2.25 gigatons of emissions per year.

Steam drove the Industrial Revolution over 180 years ago. Since then, we’ve been making steam the exact same way: we burn fuel in a boiler, make heat, and transfer that heat to water to make steam, and then use that steam for a variety of different processes. It’s clear that if we want to achieve our climate goals and the benefits of an industrial society, we need to decarbonize steam. We’re doing so by redefining boiler room efficiency — our boiler is twice as efficient as today’s boilers.

If you consider how we make steam today, we’re generally using combustion-based boilers fueled by natural gas or fuel oil, and in some cases even coal, which has some amount of inefficiency associated with it. On average, today’s boilers are about 80% efficient. These combustion boilers, however, produce CO2 and other emissions on-site.

If you wanted to decarbonize these boilers, the only real solution out there today is electric resistive, or electrode, boilers. Yes, these are more efficient than traditional combustion boilers; however, they’re not efficient enough to offset the increase in fuel cost from the higher cost of electricity compared to fossil fuels. That being said, this technology is actually starting to see increased demand, with an expected CAGR of 15% through 2030, even with its higher operational cost.

What we’re doing instead — instead of incurring efficiency losses, we’re producing efficiency gains. We do this with a product we call Boiler 2.0. Boiler 2.0 is a modular, air-source, steam-generating heat pump that pulls in heat from ambient air and upgrades it, using AtmosZero’s proprietary heat pump, all the way to 200°C saturated steam.

One of the key enabling features of this technology is that no waste heat is required. What that lets us do is solve two main barriers to adoption for decarbonized steam: using our technology, we’re operationally efficient but also capital-light. We don’t require any sort of bespoke engineering per facility. What that lets us do is create a product, not a project.

By creating a standardized product, we can now mass-manufacture our technology and reduce the cost of our system compared to competitive technologies. In addition, because we’re now a standardized product, this device looks the same whether you’re in the U.S. or in the EU. So if you’re a manufacturer with multiple manufacturing locations globally, you can now standardize your decarbonization solution and have the product install, integrate, and run the same way in all of your facilities. This also standardizes the training to operate, service, and maintain the boiler.

Our first customer taking our product to market is New Belgium Brewing, in the first quarter of 2025. We’ll be replacing one-third of their steam demand with one of our units, making process steam in revenue service. After a successful demonstration, we’ll do a full deployment — not just replacing steam at their headquarters in Colorado, but also their three other locations. That’s the beauty of being a standardized product: we can deploy and integrate with a facility in exactly the same way at all the different locations.

We’re a company focused on climate action, and for impactful climate action, we need to scale for global impact. To help with this, we have prototyped and tested our first system, a 650 kilowatt-thermal system — the same one that will be deployed at our first customer site within the next few months. We have established key supply chain partnerships to help with technology development and manufacturing. We’ve also established world-class research through our partnership with Colorado State University.

Since we’re solving a global issue, we’ve also established a subsidiary in the Netherlands to continue commercializing our technology in the EU. What we’re doing next as a company is transferring our technology from proof of concept in our facility into our customers’ hands, while setting up for manufacturing. We’re looking for customers and partners that want to decarbonize industrial steam and execute on climate action.

The three co-founders each individually have over 15 years of industrial experience in the clean tech world. We know what it’s like to be in a startup, as well as what it takes to commercialize technology — and that’s why we’ve been able to scale our technology and get it out the door in less than three years from inception. We’re AtmosZero, and we’re driving the next industrial revolution. Thank you so much for your time.

Panel Q&A

Moderator
And now the panel welcomes Ashwin Salvi. Good to have you here.

Ashwin Salvi
Hey, thanks.

Panelist
Welcome. I’m going to lead off — if you think about what could be argued a crowded space, what do customers tell you that’s different, or how do you see your product and solution differentiated?

Ashwin Salvi
Yeah, so we kind of mentioned this earlier, but the way that we integrate with facilities — the product we’re creating is a plug-and-play, drop-in solution, so it really minimizes facility downtime and the integration effort you’d see with decarbonized solutions today. Plus, it’s twice as efficient as today’s electric resistive boilers, so the operational cost — what’s most important is operational cost throughout the year — ends up being significantly lower for our solution.

Panelist
It’s great to have you. Quick question as you think about your business model — it looks like you want to build them and install them yourselves. You’re going to manufacture and get them in. Did you think about a different business model, like: great technology, I’ll license it and let someone else do all that hard stuff? How have you thought about the business model?

Ashwin Salvi
Yeah, that’s a great question. Certainly, we’re open to manufacturing our own assets today and selling those assets directly to the customer, but also licensing to third parties to either manufacture it for us, or as a service, where we can sell our asset to a company that can then go out and find a customer they can do performance guarantees for.

Panelist
Glad to have you here. One question I have is about your heat source — since you’re doing this as a heat pump, I had an experience during the Texas cold freeze where, with my heat pump, I couldn’t get my house above 50 degrees. So for an industrial process where reliability is so important, what’s required for air temperature for you to get to these levels of heat for industrial processes?

Ashwin Salvi
Yeah, I mean, being a Colorado-based company, it gets cold there, so we’re certainly designing our product to run down to very cold ambient temperatures. What’s most important in a manufacturing setting is making sure steam is available — if you don’t have steam, you can’t manufacture. So we’re designing our first system, going out next year with our pilot customer, down to minus 10°C, and then our full product, the year after that in 2026, down to minus 20°C.

Panelist
And what’s the heat source at that point — do you literally have enough differential at that temperature?

Ashwin Salvi
Yeah, ambient air is still our heat source at that point. To help with reliability, these systems can run in parallel with other assets on-site, or, if we want, we can even put in an electric boiler as a backup. So if it gets much colder than that — maybe one or two days a year — we still have steam.

Panelist
Ashwin, it’s great to have you here. Excited about what your team’s doing. Our team is excited about some collaborations we have at GTI Energy with you all, and this is a great example of drop-in equipment — like a drop-in fuel — being how we speed toward our energy transition goals. A key part of that is: how are you thinking about de-risking the prototype application for customers in the field? That’s a really important part of getting your technology used and useful.

Ashwin Salvi
Absolutely. Again, steam is critical to manufacturing processes, and therefore it must be a reliable and durable product. What we’ve done is create an at-scale prototype at our facility today — the 650 kW thermal unit we’re making as our first product is what we have in our facility, and the temperatures we’re achieving for that first product are what we’re achieving in our facility too. We’re running that full-out, making sure the parts and assemblies we’re building together can run reliably.

As we start deploying more units into the field next year with our customers in pilot configurations, we get more and more data points. We’re also creating test beds to make sure the devices in our system can continue to run at a durable set point — running these things 24 hours a day to see what the wear and durability look like, and working with our partners and suppliers to help mitigate any challenges that might arise.

Panelist
Great to have a CSU alum here, and a fellow founder. Andy, thanks for the shout-out earlier too. So, talk to us about the thermal battery companies out there that are also raising capital — the ones we’ve heard about and that we’re funding some of. They have the advantage of being able to manage intraday energy prices — how does AtmosZero address that?

Ashwin Salvi
Yeah, actually, we see ourselves as collaborative with those kinds of technologies — companies like Rondo and Antora are fantastic and doing great work in that space, providing extremely high heat for certain applications. If you look at cost tradeoffs — and I can get you the specifics, I don’t have them right here — for temperatures below 250°C, that’s where the efficiency of a heat pump really pays off. That’s where our levelized cost of steam is significantly lower than energy storage, even with extremely low pricing from the grid and from storage materials.

What’s really nice is that we can still partner — we can use stored heat to help source our heat pump throughout the day, but it’s not necessary for the economics to work.

Panelist
Congratulations on the traction you have with the brewery in Colorado. Can you help us think through all the other industrial applications where this technology might go next? What kind of feedback have you gotten from the marketplace, and what are you selecting for where you’ve found the best fit?

Ashwin Salvi
Yeah, there’s a reason we focus on steam — it’s this cross-cutting energy carrier, it’s multi-sector. As I mentioned in the video, it’s food and beverage, it’s chemicals, it’s pulp and paper, it’s textiles — everything we interact with on a daily basis is touched by steam. That’s 8% of global CO2 from the industrial side. On top of that is district heating — things like campus networks for steam, for the built environment, like buildings in New York, where Local Law 97 is now banning natural gas for boilers in multifamily or office spaces. These are all steam-driven systems, and so there’s a huge opportunity here.

We talked about food and beverage, with our brewery being our first customer that we’re going to market with next year. But there are actually two more customers that aren’t public yet, in the chemical space, both in the U.S. and in the EU. There’s a lot of opportunity where we can offer a plug-and-play solution — especially for folks with multiple locations globally who would otherwise have to do a bespoke engineered project for one facility, then do the exact same thing somewhere else, which ends up being extremely expensive and slow to deploy. What we have with a standardized product is drop-and-plug-and-play, off to the races as you go.

Panelist
Thank you. When we think about companies, and about Halliburton Labs — if you had to accomplish one thing next year, what would be the one thing you’d say, “Wow, you guys could help us with this”?

Ashwin Salvi
Yeah, so we just raised our Series A, and what we’re doing with the Series A is really translating from proof of concept to putting product in customers’ hands — that’s the most important thing right now. That’s what we’ve designed our company to do: go from a concept to making a real-world impact in less than three years.

At the same time, we’re planning a manufacturing facility so we can meet the demand we’re seeing from customers in the 2025–2026 timeframe. We’re also developing, simultaneously, plans for growing manufacturing to tens and then hundreds of units per year, to get these units out the door and make real-world impact. That’s where I think we can partner well.

Moderator
We’ve got to leave it there for now — please give Ashwin a round of applause. Thank you for being here with us in New Orleans, Ashwin. And for those in the audience — I know there are a lot of global industrial steam users, investors, and others who may be interested to get to know him — he’d be excited to meet you. Thank you, Ashwin.

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