The idea of storing heat in sand to warm homes through winter may, on the face of it, seem too simple to work.

Drop a load of cheap builder's sand in an insulated silo, heat the sand with renewable electricity, and then tap the stored thermal energy for months on end.

In an age of green hydrogen, lithium-ion batteries and other high-tech energy solutions, it can't work, right?

Finland begs to differ. This month saw the Nordic nation launch the world's first commercial "sand battery".

About 230 kilometres north-west of Helsinki, in the town of Kankaanpää, homes, offices and the public swimming pool are being heated by thermal energy stored in a 7-metre steel container filled with 100 tonnes of sand.

So how does it work, what else can it be used for, and should we build them in Australia?

'It's really a typical silo'

The Kankaanpää sand battery is connected directly to the grid and runs when electricity is cheapest.

Hot air blown through pipes heats the sand in the steel container by resistive heating (this is how electric heaters work).

The sand is able to store heat at around 500–600 degrees Celsius for months, so solar power generated in the summer can be used to heat homes in the winter.

It can store up to 8 megawatt-hours of energy, which is the capacity of a large, grid-scale lithium battery.

The project was the work of Finnish startup Polar Night Energy and a local Finnish utility Vatajankoski.

Polar Night Energy's chief executive officer Markku Ylönen said the entire battery could be built in "any steel workshop".

"It's really a typical silo with nothing that special," he said.

To discharge the stored thermal energy, air is circulated through pipes in the sand where it's heated, then directed, to wherever it's needed.

Right now, that's mostly heating homes, but it could also be used for high-temperature industrial processes, Mr Ylönen said.

Very little energy is lost in this process, so long as the heat is not being transported very far, he said.

In theory, the stored heat could be used to drive a steam turbine to generate electricity, but this is far less efficient.

"The efficiency will be something like 20–25 per cent," Mr Ylönen said.

"Technologically speaking, there are no obstacles, but the economic case is harder to find than with heat-only projects."

What can it be used for?

Australia doesn't have the same domestic heating requirements as Finland, but there's plenty of potential for using stored thermal for industrial processes, said Andrew Blakers, director of the ANU Centre for Sustainable Energy Systems.

"There's an enormous storage market for these things and that is to replace gas in factories," Professor Blakers said.

About 16 per cent of Australia's emissions are due to burning of gas in industry for processes needing high temperatures (anything above 100C).

Heat pumps (the same technology used by reverse cycle air-conditioners), which can be powered by renewables, max out at about 100C, meaning they can't replace gas for these industrial uses.

But thermal storage can deliver temperatures of more than 1,000C, depending on the storage medium.

"You choose the storage medium to suit the temperature of the process," Professor Blakers said.

Sand is just one option. Others include crushed rock and molten salt.

Thermal storage 'cheaper than gas'

The idea of thermal energy storage, including the sand battery concept, has been around for years.

So why are we only building these heat batteries now?

Firstly, for many years it's been cheaper to burn gas to generate high temperatures.

Secondly, due to heat loss, thermal energy can't be transported as easily as pressurised gas, which can make it trickier to use.

But recently the economics have changed. 

Russia's invasion of Ukraine has disrupted the supply of gas to Europe and other markets.

In the first quarter of 2022, European gas spot prices were five times higher than in the first quarter of 2021.

These high prices led to Australian gas producers exporting their gas, rather than selling it domestically, driving up prices in Australia.

Thermal storage has become cheaper than burning gas for high-temperature industrial processes, Professor Blakers said.

"In the past three years, the price of solar and wind has fallen so far, and [in the past few months], the price of gas has gone through the roof.

But factories looking to switch to thermal storage won't be able to simply pipe in heat, like they do with gas.

Instead, they'll have to build their own thermal storage silos and heat them with cheap daytime solar electricity, from their own rooftop systems or the grid.

"A few thousand cubic metres of storage would be enough to keep a factory running," Professor Blakers said.

Or factories could wait for gas prices to fall.

"I think they'd be nuts if they waited," Professor Blakers said.

"Nobody can predict where the gas price will go, but the one thing you know is daytime solar electricity is going to stay at a low price."

What's next?

The Australian start-up 1414 Degrees has developed and patented a thermal storage system similar to the Finnish battery, but using molten silicon to store heat instead of sand.

It recently teamed up with another company, Vast Solar, to plan a solar thermal project in South Australia.

Swedish public utility Vattenfall is also building a 200MW-rated thermal energy storage in Berlin.

The heat storage tank can hold 56 million litres of water, which will be heated to 98C to warm homes.

Polar Night Energy has had plenty of interest in building more sand batteries, with the war in Ukraine putting the focus on alternative energy sources and storage methods, Markku Ylönen said.

Recently Moscow suspended the supply of gas and electricity to Finland due to its request to join NATO.

The next battery will be 100 times bigger, or about 20 metres in diameter and 10 metres high, with 1GWh of energy, Mr Ylönen said.

"With the economies of scale, if we go 100 times bigger, the price won't be 100 times larger. It will be 20–30 times larger.

"It will be in Finland, but we are already negotiating several sites internationally."

Once the first of these larger designs is built and tested, others could be built rapidly, he said.

"I would [eventually] like to say that we are building 10 next year."