Renewables now provide about 22 percent of U.S. electricity, with wind and solar alone accounting for about 14 percent.

But there's a challenge.

Wind and solar depend on the weather, making energy storage critical.

Enter thermal batteries, a reimagined technology that stores excess energy from renewables when production is high and releases it when needed.

Intermittent wind and solar power are becoming the cheapest forms of energy that humans have ever known.

And all kinds of energy storage is now being used to harness that to drive transportation, to drive the electricity grid.

Heat batteries are a fundamentally new way of storing energy at a small fraction of the cost.

A thermal battery is a device that stores electricity as heat in a variety of materials like graphite or bricks, keeping it hot for hours or days until it's needed to be released as electricity.

They can reach various temperatures going over 3,000 degrees Fahrenheit, depending on the technology and materials, making it perfect for powering factories.

This simple technology helps store energy from renewable sources like wind and solar when wind and solar generation is intermittent.

By using materials like clay and iron alloy instead of rare resources like lithium or cobalt, thermal batteries avoid the supply chain constraints of other technologies.

What a thermal battery does is it allows you to soak up those clean inexpensive electrons from wind and solar, store them as heat and then deliver that energy later to an industrial customer on demand and cost effectively.

But thermal battery companies must prove that they can scale their systems to replace fossil fuel heat in a variety of industries, which requires significant investment and infrastructure upgrades.

CNBC talked to some of the companies leading the charge in thermal batteries to understand why they're going all in on this technology.

Thermal batteries could be the solution to decarbonizing heavy industry.

There are many, many companies, many, many people around the world racing to try to develop an energy storage technology that's cheap enough to enable that to fully displace fossil fuel based power production.

And the reason this is a race is because it really comes down to the fact that the current technology we have, which is lithium ion batteries, is too expensive.

One report that examined long duration energy storage projects around the world found that the capital costs for a fully installed lithium ion battery system were $304 per kilowatt hour compared to $232 per kilowatt hour for thermal energy systems.

Heat batteries are a critical tool to decarbonize industry, which otherwise is on track to be way more than half of all our greenhouse gas emissions by 2050.

Intermittent electricity is cheaper than burning fuel.

If we can have very low cost energy storage to deliver energy the way industry uses energy as heat, we can lower the cost of making everything from steel to baby food and we can cut world CO2 emissions, total world CO2 emissions, 20 percent.

Here in California's Central Valley, the San Francisco Bay Area startup Rondo Energy has built its first commercial thermal battery.

It stores power from solar panels at CalGren Renewable Fuel's biofuel facility to produce high temperature heat 24-7.

A Rondo heat battery is a box that on the one side has an electrical connection where it's taking electricity some of the time when the wind blows, when the sun shines, and delivers steam all the time.

Meeting the needs of an industrial facility that's running all year long.

Thermal storage isn't new.

It's been used for years, but now it's being reimagined in a whole new way.

This is a 200-year-old technology.

Rondo found a way to take that process and that material to build the world's lowest cost, simplest energy storage.

Wind and solar are now the cheapest energy sources.

Making thermal storage of this type of energy an attractive option.

The fact that you can hold the energy for months means that you could charge up a battery when the sun is plentiful, when the wind is plentiful, and you can hold on to it for days, weeks or even more than that and for months until you're ready to get it back on the grid.

And so this flexibility to be able to insulate a system and hold the energy for a long period of time allows us to really look at relying on this form of energy storage for a range of the needs on the grid.

Thermal batteries offer a low-cost, scalable way to decarbonize.

And unlike lithium-ion batteries, which store electricity, these systems store heat, essential for industries like steel, cement and chemicals.

Lithium isn't exactly rare, but it does need to be mined and processed before going into a battery.

We use unrefined raw materials, brick made from clay, that we store energy by heating it to over 1,000 C, over 2,000 Fahrenheit.

And a pound of brick stores more energy than a pound of lithium-ion battery at less than 10 percent the cost.

Founded in 2020 with backing from Bill Gates, Rondo currently produces 2.4 gigawatt hours of heat batteries annually and plans to scale to 90 gigawatt hours by 2027.

That's enough to cut 12 million tons of CO2 emissions, equivalent to 4 million gas cars off the road.

Its batteries are made at a Siam Cement Group factory in Thailand, which is undergoing a 40-fold expansion.

Once complete, it will surpass Tesla and GM's lithium-ion plants to become the largest battery factory by output.

Since June 2023, Rondo has announced 11 commercial developments.

This includes eight projects over $140 million in funding and four key partnerships.

Together, these represent more than 3 gigawatt hours of heat battery development opportunities.

These projects span five industries, food and beverage, cement, fuel, chemicals and textiles.

The products produced range from fine grade whiskey and ready-to-drink cocktails to sustainable aviation fuel, cement, recycled plastics and biogas.

We really have an enormous amount of demand coming from industrials to work with us because they see us in many cases as the only platform that can really address the need at the scale and the speed that they need to address it.

One of those deals is Eastman Chemical, a $10 billion specialty materials company to provide energy storage at a recycling plant in Texas.

It was really an opportunity to lower greenhouse gas emissions and do that in a way that enabled ongoing safe, reliable operation of the plant.

Clothing giant H&M is also investing in Rondo.

The retailer plans to use its heat batteries to decarbonize its clothing factories.

Rondo isn't alone.

Almost 30 companies are racing to develop thermal storage solutions.

One of them is Antora Energy, based in Sunnyvale, California.

Founded in 2018, Antora uses carbon-based blocks to capture and store heat.

The company is also working to convert that heat back into electricity with thermophotovoltaic technology.

Antora has raised $150 million to commercialize its design and scale production.

What we've done at Antora is develop a whole new way to store energy in a thermal battery.

And it's using techniques that have been around for centuries, which is basically just take an inexpensive material like a solid block of carbon and heat it up.

But the way that we've constructed our product, the way that we're manufacturing it in a modular way here in a U.S. factory, all of that is new and will dramatically accelerate the deployment of this technology.

Forthpower in Boston is another one.

Its systems use superheated graphite blocks and thermophotovoltaic cells to convert stored heat into clean power.

A recent $19 million funding round is helping it build a 10 megawatt hour power plant to test out the technology.

We take energy from renewables, solar or wind, the actual energy is stored in graphite blocks.

And we convert the heat back to electricity using a special kind of solar cell that we call a thermophotovoltaic cell, an extremely high temperature heating element very similar to an incandescent light bulb.

For thermal batteries to transform industrial energy, several challenges must be overcome.

The biggest challenge today is that almost no one knows that this new kind of energy storage is now here.

But that's starting to change.

In Europe, thermal batteries are gaining traction with an ecosystem of utilities and developers emerging.

Meanwhile, in the U.S., the focus has been on other green energy projects.

In the United States today, a lot of the focus, rightly so, has been on electric vehicles and decarbonizing the grid.

But this is the next giant opportunity in addition to those things.

And one of the limits on how fast this can grow is how fast can the market be educated that this is now here?

The nature of thermal energy storage projects also makes them more difficult to develop.

One of the challenges will just be, as we scale up, actually attracting the capital that it takes to actually do these deployments early on and then seeing the costs actually come down.

Integration with existing systems is also an obstacle.

Eastman Chemical is working to decarbonize its methanolysis process.

Whereby hard-to-recycle polyester is recycled into new materials.

We are integrating this technology with our co-gen technology that already exists at the facility.

And we'll be leveraging a combination of solar power and green energy credits from the grid.

And it's the integration of those two technologies into a single cohesive system connected to our methanolysis facility is the more challenging aspect of this.

Despite these challenges, thermal batteries have a cost advantage over many energy storage technologies, positioning them as a key player in decarbonizing industrial energy.