The signed term sheet with KALL Ingredients builds on the letter of Intent (https://www.kyotogroup.no/news/hungarian-food-ingredient-producer-aims-to-utilize-kyotos-heatcube) reported by Kyoto on a no-name basis on 10 January 2023. The term sheet outlines the commercial conditions for the heat purchase agreement that the parties aim to sign by the end of October.

"This marks a significant commercial milestone for our Heat-as-a-Service business. In collaboration with our partners, Kyoto offers a very attractive thermal storage solution for KALL Ingredients, as well as numerous other companies within the food and ingredients industry. Recognizing the sector's substantial need for reliable, high-quality process heat, Heatcube meets KALL's requirements while actively contributing to their ambitious objectives of reducing CO2 emissions," stated Tim de Haas, Chief Commercial Officer of Kyoto Group.

KALL Ingredient's Heatcube will replace the current natural gas supply and is designed with 56 MWh of storage capacity, offering an annual capacity of more than 30 GWh. This will result in a CO2 reduction of up to 8,000 tons annually.

Ádám Sass, Strategic Director of KALL Ingredients Kft, says: "Our aim is to rely entirely on sustainable energy in the future while ensuring lower energy costs. Kyoto's Heatcube will provide us with a stable and cost-effective supply of sustainable process heat, and we are excited to get started with this project."

After the signing of this term sheet the partners will establish a Hungarian legal entity (SPV) that will enter into the Heat-as-a-Service agreement with KALL, with Kyotherm as the majority investor, Energiabörze, as the minority investor, and Kyoto Group as the solution provider. The SPV will simultaneously purchase the Heatcube from Kyoto Group.

"Thermal energy storage solutions are key in the energy transition, and Kyoto's Heatcube is an exciting solution to decarbonize industrial heat demand," added Arnaud Susplugas, CEO of Kyotherm.

Heatcube at KALL Ingredients will operate as an asset in the flexibility markets and utilize intermittent renewable energy whenever available while supplying a constant flow of steam for industrial production.

"In Hungary the share of renewable energy supply continues to increase significantly, which requires a rise in storage capacity. Kyoto's Heatcube provides a technical solution for steam storage that will allow us to act on the reserve market as well as benefiting from intra-day trading to reduce the energy costs for the industry," says András Vinkovits, CEO of Energiabörze Kft

The parties aim to sign the commercial contract by the end of October and to install Heatcube within 2024.