Heat pumps are key to helping industry turn electric

• New report shows how industry can decarbonize its heat consumption and make industrial heat pumps a commercially attractive proposition.
• Industrial heat is essential to decarbonize, accounting for 29% of global energy demand and 15% of all greenhouse gas emissions.
• Commercially available heat pumps could supply 37% of industrial heat demand.
• Report reveals key market and policy trends driving heat pump uptake, and how light industry, in particular, can turn its process heat electric in a cost-effective way. 

Geneva, 21 September – A new report from the World Business Council for Sustainable Development (WBCSD) and DNV, a leading decarbonization advisory firm, calls on companies to move their manufacturing operations away from fossil fuels toward electrification by seizing the opportunity provided by heat pumps.

This report highlights market developments and policy trends that signal an increasingly compelling business case for heat pumps. It shows business leaders how to select markets ready for heat pump deployment and key actions to help companies scale up industrial heat pump installations profitably – from combining heating and cooling to leveraging innovative financing mechanisms.

Decarbonization of industrial heat through electrification is key to tackling the climate crisis. Heat used to run industrial processes accounts for 29% of global energy demand and 15% of all greenhouse gas emissions. At a time of geopolitical instability and a steep rise in gas prices caused by the war in Ukraine, there is a growing urgency to move away from fossil fuel consumption and a great opportunity to electrify heat and reduce exposure to volatile natural gas prices.

Heat pumps are the only heating technology with potential thermal efficiencies above 100%, meaning they can significantly reduce energy use, operational costs and emissions – and provide circular solutions so that one company’s waste heat can support another company’s heat needs. Commercially available heat pumps, which are currently limited to heat supply of up to 200°C and therefore primarily used within light industry, could supply 37% of the current industrial heat demand.

Key actions to strengthen the business case for heat pumps

The report addresses how low uptake of heat pump technology can be resolved through the following approaches:

• Use scenarios for future utility and carbon prices to understand the lifetime costs of all options and the policy and market risks associated with fossil fuel-based heat;
• Seek opportunities to couple heating and cooling applications within or outside the business and leverage existing waste heat streams;
• Pursue opportunities to make use of variable electricity tariffs and potential revenue generation opportunities by providing grid-balancing services;
• Embrace alternative business models and financing mechanisms such as Heat as a Service;
• Seize opportunities to minimize disruptions and capital costs by installing heat pumps during planned outages and at sites with no or limited additional grid connection costs.

“The electrification of heat is critical to decarbonize industrial manufacturing operations: Heat pumps are one of the few commercially available and commercially viable solutions that can be implemented at scale this decade.” Mariana Heinrich, Director, Energy, WBCSD

“Even prior to recent gas price inflation, clear market trends were making the business case to employ heat pumps in industrial heating applications ever clearer. Innovation in technology is making heat pumps capable of achieving higher temperature and, therefore, applicable to a wider range of industries.  Innovation in applications is also creating unique business opportunities, through coupling of heat and cooling loads internally and externally – connecting to other businesses as well as district heating systems.” Marcel Cremers, Principal Consultant, DNV

 “Significant emissions reduction opportunities can be realized by replacing gas-fired industrial heating applications with heat pumps. Further energy efficiencies can be leveraged by coupling on-site cooling applications with the heating system through heat pumps.” Scott Tew, Vice-President of sustainability for Trane Technologies

“The heat pump will help us to electrify the generation of thermal energy, as well as to valorize low-quality industrial waste heat. One step further for the decarbonization of our industry.” Josep Maria Moragas, Senior Engineering Project Manager, Danone

The new report is published as part of WBCSD’s Energy Pathway, in which two dozen member companies collaborate on renewable heat in industry by building capacity to overcome barriers and unlock value using new technical, commercial and financing solutions. We invite all companies, initiatives and sector stakeholders to join us to tackle this systemic challenge.

If you are interested in learning more about our work, please contact Rutger van der Zanden, Manager, Energy Transformation.

We would like to thank the member companies who contributed to this document as part of the Industrial Heat workstream: Arcadis, Danone, DNV, Dow, Enel, Engie, Givaudan, Google, Inkga Group, Novartis, Philips, PMI, Shell, Solvay, Trane Technologies, Total Energies and Unilever.