When we last spoke with Terrajoule CEO Steve Bisset in 2011, he was on the hunt for $7 million in round A venture capital funding.

It's taken a while, but he got his funding (actually landing more than his original target), along with the help of an important strategic investor: Air Liquide. (He ended up proving out one of the themes of the next wave of greentech investing -- namely, that corporates are playing a very important role in the cleantech investment chain.)

Terrajoule, an energy storage and solar and waste-heat harvest startup, closed an $11.5 million funding round from strategic investor Air Liquide, along with NEA and individual investors Jim Bochnowski, Craig Winkler and others. NEA's Forest Baskett and Arno Penzias helped seed-fund the company in 2009. The Redwood City, California-based company unstealthed in these pages in 2011.

The twelve-employee startup called itself "a flexible technology platform for distributed energy generation, storage and efficiency" that "leverages a breakthrough in energy storage technology yielding 5X lower cost than batteries, with no degradation or cycle limitations over a 25-year system life" in a release.

That's some pretty salty language for the resurrection of a vintage World War II steam engine design called the Skinner Universal Unaflow. This positive displacement reciprocating engine was used in U.S. Navy ships. A car ferry, the SS Badger, is powered by such engines and plies the waters of Lake Michigan to this day. Bisset described it as "a very-well refined thread of steam engine technology" that has "little change in efficiency despite changes in output power" in an earlier interview.

The intention is to combine cheap energy storage with cheap solar power. The pre-revenue startup's initial focus is on powering industrial and agricultural customers that are now using diesel generators. Terrajoule has a test site that puts out 100 kilowatts up to 24 hours a day on an irrigated almond farm in California's Central Valley.

The firm generates steam with allegedly cheap parabolic trough solar concentrators, as used on a larger scale in CSP plants. The steam drives a steam engine, which turns a shaft and spins a generator. To hold on to the steam energy for later “dispatchable” use, the steam is condensed in a 30,000-gallon tank of pressurized hot water. When there is demand, the water flashes back to steam to supply the engine. The customer gets distributed, dispatchable renewable energy with no diesel and no pollution. And Terrajoule gets potential access to the worldwide distributed electricity markets that are powered by diesel, including islands, mines, factories, pipelines, townships, irrigation, and military bases.

The re-invention of this old steam engine design is the brainchild of Robert Mierisch, Terrajoule's Chief Engineer and the former Research Director of Thermal Systems at Ausra. Terrajoule's systems have a modular unit size of 300 kilowatts peak/125 kilowatts of typical output over the course of a day. Off-grid customers will need to use the system over 2,000 hours per year to get a strong financial payback, according to the company. Most agricultural irrigators in the western U.S. fit this profile, according to Bisset, but there are bigger and better applications. Islands such as Kauai are dependent on costly petroleum for over 80 percent of their power, but were limited (until now) in how much of that problem they could solve with solar, due to the intermittency of PV.

But the solar power/energy storage application isn't even why Air Liquide went big with Terrajoule. It's waste heat recovery to improve the efficiency of industrial operations that attracted the enormous industrial gases company.

Air Liquide’s investment was driven by Terrajoule’s potential ability to economically convert waste heat to electricity in its hydrogen production plants, using the same reciprocating power conversion engine that enables Terrajoule’s energy storage.

Bisset noted that on an earlier visit to Terrajoule, a VC acquainted with Air Liquide looked at the 135-degrees-Celsius temperature in the tank and said, "This is a waste heat recovery technology; I should introduce you to Air Liquide."

Forest Baskett of NEA pointed out that Air Liquide "has looked at everything" in the waste heat recovery field and added that Air Liquide's large factories must be as efficient as possible because they are manufacturing a commodity product. Baskett added, "Any kind of fractional percentage improvement is worth many, many dollars." He said that Air Liquide's investment was for "internal consumption of the technology" -- which could put the agenda of the VC investor at odds with the strategic investor. Air Liquide is less focused on earning venture returns than it is on changing the IRR of one of its scores of plants.

There is no semiconductor design happening at Terrajoule. This is about metal and steam and grease and selling productivity and efficiency to tough customers like farmers and factory operators. My grasp of thermal cycles and the motive force is shaky, but the physics of the design should pass muster given the due diligence of Air Liquide and Mr. Penzias. What remains to be proven is the real-world efficiency of the system, the economics of this approach, and the competitiveness of this solution versus the incumbent diesel technology -- or versus just doing nothing.

The Terrajoule team states that it is exploiting a long-established machine and piston supply chain in its partnership with engine design firm Roush Industries of Livonia, Michigan.

The CEO said, "This is not just a Silicon Valley story; it’s a story of revived innovation in Detroit."