FeX Energy raises $4.8 million CAD on bet that iron can power the energy transition

A McGill subsidiary is testing an iron reactor for renewable energy storage aimed at heavy industry.

A Montreal startup based out of a McGill University lab is building an iron-based energy storage reactor that it believes can reduce dependence on fossil fuels.

Fex Energy raised US$3.5 million ($4.78 million CAD) from Houston-based Fathom Fund, Toronto-based Amplify Capital and Singapore-based Antares Ventures. The all-equity round closed on September 5 and will help the company launch its first pilot for an undisclosed client in Ontario.

“We need all hands on deck to solve the energy transition.”

In an interview, FeX CEO Hayden Smith told BetaKit that the company's patented iron reactor reduces the need for fossil fuels by storing renewable energy and converting it into reliable energy at high temperatures.

The FeX reactor, located in a shipping container, operates through thermochemical reactions. Renewable energy, such as wind or solar energy, is chemically stored in the iron, increasing its energy levels through a reduction reaction. The energy is then released as heat. This exhaust is versatile, Smith said, and can be used to replace diesel and other relatively expensive fossil fuels.

The company targets heavy industries with a high dependence on fossil fuels, such as mining, naval shipping and building heating in remote areas. The business model is to sell its iron reactor to large customers looking to transition away from fossil fuels with an alternative high-temperature energy source.

Smith also positions the technology as a dual-use technology, as he argues that the energy storage technology could be used to power Canadian military operations in remote locations such as the Arctic. This summer, the company received a $1 million prize from the Canadian Defense and Security Innovation Challenge (IDEaS) for carbon-free energy storage in the north.

FeX has seven full-time employees and five contractors, and the company plans to expand the team with new funding. The capital will also begin its pilot project in Ontario, where an iron reactor will be used to heat several buildings using hydroelectricity as the primary source.

FeX Energy was founded in 2018 as a spinout of McGill University's Alternative Fuels Laboratory, led by Professor Jeffrey Bergthorson, and Montreal-based clean technology venture capital firm Hard Climate, formerly known as BXVentures Canada. Bergthorson, who is also FeX's chief scientific advisor, has spent nearly two decades studying the field.

CONNECTED: Deep Sky launches first direct carbon capture facility in Alberta

Mark Gilbert, founder of Hard Climate, told BetaKit that FeX's solution is one of the “dense, safe and stable” energy options, especially for heating processes in buildings and industry. Gilbert is also the company's co-founder, president and chairman of the board.

Smith has big ambitions for FeX. He hopes the firm will help cut carbon dioxide emissions by half a billion tons a year by 2050. However, he also argues that the climate is at a “point of no return” due to carbon dioxide emissions. Global average atmospheric carbon dioxide levels exceeded 420 ppm in 2024which experts say is a leading cause of extreme weather events, rising sea levels and other adverse climate impacts.

There has been a surge of interest among Canadian technology companies in carbon capture and storage solutions as a way to offset carbon emissions, including technology from companies like the Montreal-based one. deep sky. While FeX doesn't offer a carbon capture solution, Smith believes all sorts of parallel solutions are needed given the urgency of climate change.

“We need all hands on deck to solve the energy transition,” Smith said. “All decisions are justified and useful.”

Image courtesy of FeX Energy.

Leave a Comment