MGA Thermal has secured AU$3.25 million (US$2.31 million) in funding from the Australian Renewable Energy Agency (ARENA) to conduct up to five front-end engineering design (FEED) studies for its thermal energy storage (TES) technology.
The funding, provided under ARENA’s Powering the Regions: Industrial Transformation Stream, will subsidise FEED study costs to reduce early-stage financial barriers for industrial and manufacturing customers exploring opportunities to transition away from fossil fuels using MGA Thermal’s technology.
At the core of MGA Thermal’s system is its patented MGA Block technology, which stores energy as latent heat, enabling long-duration thermal storage. Renewable energy is converted into heat and stored in the MGA Blocks before being dispatched on demand as high-grade process heat suitable for industrial applications.
ARENA CEO Darren Miller said the project aims to address one of the most challenging areas of decarbonisation.
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“Decarbonising industrial process heat is critical to Australia’s net zero transition, but it remains one of the hardest problems to solve,” Miller said.
“By supporting detailed FEED studies, this project could give industrial customers greater confidence in the technical and commercial viability of TES, helping move promising projects closer to investment and deployment.”
The FEED studies will advance five commercial opportunities with strategic customers, producing detailed technical designs, cost estimates, delivery schedules, risk assessments and commercial strategies to accelerate project investment readiness and wider thermal energy storage adoption across Australia’s industrial sector.
MGA Thermal CEO Mark Croudace described the funding as validation of the company’s technology and its role in Australia’s industrial transformation.
“This funding represents continued traction for MGA Thermal and provides an opportunity for industrial partners looking to decarbonise their operations,” Croudace said.
“ARENA’s backing gives industry the capacity to move forward with technical and commercial certainty, enabling investment in thermal storage projects. We’re excited to work with forward-thinking industrials who are ready to lead their transition.”
As previously reported by Energy-Storage.news, the company completed the world’s first industrial steam heat energy storage demonstrator in Australia, demonstrating the technology’s capability to store renewable energy and dispatch it as industrial-grade steam. That project validated the technical feasibility of the MGA Block system for industrial applications.
The FEED studies will focus on industrial facilities with significant process heat requirements, where thermal storage can displace fossil fuel consumption.
The programme will enable detailed engineering, costing, and integration assessments for thermal storage systems across a range of industrial heat applications, supporting Australian industrials in reducing both energy costs and carbon emissions.
Speaking at the Energy Storage Summit Australia 2025 in March, Croudace noted that the scale of the opportunity to decarbonise the industrial sector presents a test for energy storage technologies.
“It’s going through enormous change, and it’s at the very start of it. In contrast to the residential sector, the industrial sector is at least 400% bigger in terms of energy and opportunity,” he said.
The CEO highlighted that the successful demonstration plant shows the technology “isn’t just a concept – it’s a commercially viable solution ready for deployment.”
He added: “As we gear up for full-scale commercialisation, our focus is on partnering with forward-thinking industries, both locally and globally, eager to embrace a sustainable future. The potential for significant emissions reduction is immense, and we are on track to abate 30 million tonnes of CO2 by 2030.”
MGA Thermal’s pathway to full-scale commercialisation
One of this technology’s target markets is the use of heat in industrial processes, which is notoriously tricky to decarbonise and is also being addressed by various other thermal energy storage providers.
MGA Thermal’s investors include Shell, and MGA Thermal recently closed a funding round, having raised AU$8.5 million (US$5.47 million) as reported by Energy-Storage.news in 2023. It also secured AU$1.27 million for its megawatt-hour scale demonstrator from the Australian Renewable Energy Agency (ARENA).
However, the technology’s development has not been without its struggles. Indeed, in 2023, an overheating incident at the Tomago site led to emergency services being called to the 5MWh demonstration unit in the Hunter Valley after a “dangerous heat build-up” was declared shortly after 05:00 local time.
“It is a reminder that we are working on cutting-edge technology, innovating new large-scale energy storage, and the importance of in-house trials,” the MGA Thermal spokesperson said at the time of reporting.
Alongside MGA’s technology, specially designed bricks that retain heat, various molten salt-based thermal energy storage technologies and sand batteries, a technology primarily used in district heating networks but also applicable to some segments of industry, are among the technologies being commercialised to decarbonise industrial heat.
Perhaps the most common application of these technologies is industrial steam generation, and the higher the required temperature, the greater the difficulty in abating emissions.
MGA Thermal will commence the FEED studies in early 2026, with outcomes expected to inform final investment decisions for multiple industrial decarbonisation projects across Australia.
The Energy Storage Summit Australia 2026 will be returning to Sydney on 18-19 March. It features keynote speeches and panel discussions on topics such as the Capacity Investment Scheme, long-duration energy storage, and BESS revenue streams. ESN Premium subscribers receive an exclusive discount on ticket prices.
To secure your tickets and learn more about the event, please visit the official website.
