Kanin Energy's $100M Bet on the Heat Heavy Industry Throws Away

Heavy industry already owns some of the cheapest power generation in North America. Most of it leaves through the roof. Cement kilns, gas-processing plants, refineries and steel mills push high-temperature exhaust into the stack, and the heat that could spin a turbine is treated as something to get rid of.

The raise is not large by infrastructure standards. It is large for a category that has spent two decades as a footnote in every industrial energy audit. Waste-heat-to-power has always worked in principle, and almost never in project finance. What changed is the price of the alternative.

Rising power prices, grid congestion and reliability constraints are pushing industrial companies to rethink how they source electricity. Waste heat has largely been an unused answer, and the funds backing the company are betting that gap is structural rather than cyclical.

Why heavy industry is the last untapped power plant

Every industrial process that runs hot throws off usable energy. A gas compressor station, a cement line, a refinery flare system — each dissipates heat that a waste-heat-to-power unit can convert into baseload electricity with no additional fuel and no additional emissions. The unit sits behind the meter, feeds the host facility or a nearby offtaker, and removes a slice of demand from a grid that is increasingly expensive to draw from.

The technology is not the hard part. It builds around organic Rankine cycle (ORC) turbines — a compact power cycle that has been deployed for more than four decades — rather than a novel generator. The company describes itself as technology-agnostic, which is a deliberate signal to project financiers: this is an infrastructure play wearing a cleantech label.

That is the whole pitch.

An industrial host signs a contract, does no capital spending, and buys electricity below the rate its utility charges. The developer arranges the engineering, construction and operation, and keeps the spread. The host keeps its uptime. A university, a midstream operator or a refinery gets a lower power bill without touching its balance sheet.

The economics that finally work

Waste-heat projects died on the same rock for years: cheap grid power. When electricity cost $40 per megawatt-hour, the payback on a site-specific turbine was too slow to justify the engineering. The calculus has flipped. Industrial power prices have climbed, interconnection queues for new generation stretch for years in most markets, and a facility that can generate its own megawatts avoids both the tariff and the wait. As we wrote in September, turbine and transformer backlogs are booked well into the next decade — which makes a generator that needs no new equipment order unusually attractive.

The model has a track record to point at, thin but real. An operating project supplies zero-emission electricity to the University of Dayton. The Mewbourn project in Weld County runs with Phillips 66 as partner. A growing midstream pipeline sits behind those two. None of it is huge. All of it is financeable, which is the part that matters to a fund deciding whether a developer can deploy capital at scale.

What does not scale

Waste heat is not a universal fuel. It exists only where an industrial process already produces high-temperature exhaust, and it cannot be piped to a site that lacks one. A data center, a warehouse or a retail chain has nothing to capture. That caps the addressable market at the heavy-industrial footprint — refineries, gas processing, cement, metals, chemicals — and it makes growth a function of how many of those sites a developer can sign, not how fast it can manufacture units.

The output is also modest per site. A single unit typically delivers single-digit megawatts, so a 50 MW portfolio is the product of many contracts, each with its own host, offtake and interconnection arrangement. That is a sales and structuring business as much as an engineering one. Scale arrives through repetition, and repetition is slow.

Who else is in the room

It is not alone in the equipment layer. Ormat Technologies and Turboden, a Mitsubishi unit, both build ORC systems at industrial scale, and smaller suppliers such as ElectraTherm and Dürr Cyplan compete for the same exhaust streams. On the development side, the differentiator is financing capacity rather than turbine efficiency — the ability to fund, build and operate a project on the host's behalf. That is where an equity platform backed by a growth fund and a sovereign co-investor pulls ahead of a pure equipment vendor.

The demand signal comes from the hosts themselves. Phillips 66 and Tallgrass have already partnered with it on projects, and PaceZero Capital provided an earlier credit facility to bridge development. When refiners and midstream operators sign on, they are not endorsing a technology. They are buying a lower power cost with no capital outlay.

Comparison of on-site power options. Source: Company and industry data, 2026

What the operators are saying

"Rising power prices, grid congestion, and reliability constraints are pushing industrial companies to rethink how they source power. Waste heat has largely been an underused solution. We view this as a category with real staying power."— Marisa Sweeney, principal, S2G Investments

That framing sets how the deal should be read. S2G is not underwriting a breakthrough. It is underwriting a category that stayed small because grid power was cheap and capital was scarce. Neither condition holds today. Utilities are raising industrial tariffs, and interconnection queues make new supply slow to arrive. A developer that puts generation behind the meter, on a host's existing exhaust, sells a hedge against both.

"Kanin was built on the belief that industrial facilities already hold the solution to their own energy challenges, they just need the right partner to execute."— Janice Tran, co-founder and CEO, Kanin Energy

The company's structure reflects that pitch. It arranges the project financing, owns the asset, operates it, and sells the electricity. The host provides the waste heat and the site, and little else. For an operator whose business is refining or processing rather than power generation, that division of labor is the selling point. Building and running a turbine on its own balance sheet would compete for capital against the core operation.

Energy-as-a-service moves the risk to the developer and the returns to the funds. It also concentrates execution risk. A portfolio of single-digit-megawatt projects rises or falls on how many contracts a small team can structure and commission, and it remains a lean operation relative to the pipeline it is assembling. That constraint, more than turbine supply or sector economics, is what the new capital has to relax.

Signals to watch