Vision vs. reality – why political intervention is essential to unleash heat pumps energy savings potential in industrial and commercial applications.
Buildings need a comfortable indoor temperature and air quality, temperature levels in industrial processes needs to be regulated to the point, goods in storage and transport require a controlled atmosphere – these are only a few examples where heating and cooling is essential in a modern society.
Far too often both services are still addressed separately. Boilers are installed to heat up, air conditioning and refrigeration equipment to cool down. Rarely are both seen as two sides of the same coin. As a consequence, energy stored in waste air or water is discharged to the environment and thus lost for further use.
If in a building, hot water is heated by a boiler and an a/c system is used to cool down the indoor air temperature, energy is wasted. If in an industrial process, fossil energy is burned to provide heating in step one and then an intermediate or final product is cooled down, energy is wasted. If industrial production facilities are cooled by cooling/refrigeration equipment or close-by offices are heated by separate appliances, energy is wasted. In short, whenever heating and cooling requirements are solved independent of each other, without taking a system perspective, the likelihood of wasted energy is high. Heat pump technology provides heating and
cooling at the same time, always. It is a matter of proper system design to make use of both sides and thus turn the one-way road of energy use into a circular energy economy. The potential of closed cycles is particularly high in industrial applications. In 2015, the industrial and commercial heat pump working group (ICHP) of the European Heat Pump Association has studied the potential of non-domestic heat pump applications for heating and cooling. The authors of that study, Philippe Nellissen and Stefan Wolf have dubbed the report „potential for an industrial revolution“ .
Heat pump technologies are recognized for the fact that they contribute to the EU energy and climate targets. They
- reduce energy demand and CO2 emissions.
- integrate renewable energy and help decarbonize the system.
- can make use of waste heat.
- provide demand response potential and help stabilize the electric grid.
- provide local employment and keep know-how in R&D
- use local energy and reduce import dependency.
Heat pump technology is widely accepted as a feasible solution in the residential sector where they mainly use renewable energy from air, water and ground to provide heating and hot water. Much less known is the opportunity to valorise waste heat streams by upgrading their temperature and thus utilize them to cover heat demands of users located close-bye. This applies wherever cooling and heating are needed simultaneously for example in many industrial processes in the food, paper or chemical industries.
Heat pump technology can increase or lower the energy level of these sources to the desired level of another application, thus connecting individual energy loops into a cascade which can eventually be closed again. While the residential heat pump market is dominated by electric compression heat pumps, a variety of heat pump technologies are used in industrial and commercial applications (see fig. 1).
Figure 1: Classification of heat pump technologies. Source: Wolf/Nellissen 2015 
With the currently available technology, heat pumps can provide heat on temperature levels up to 100°C with a spread between source and sink temperature of approx. 50 K per stage. This is important to note, as two stage heat pump installations can cover a larger spread.
The use of heat pumps for applications with a heat demand above 100°C is still a challenge. While the underlying principles for such heat pumps are known and prototypes for these temperature levels exist, they are not yet available in standard products. The current level of research and development projects as well as increased interest by new players to engage in the segment of large heat pumps leaves room for optimism. In the coming years, a number of new products is expected in the market.
Without existing solutions for heat pump applications for temperature levels above 150°C this segment has not been included in the current potential assessment. With this in mind, available data from Eurostat for was evaluated to determine the potential for the application of heat pumps in these industrial sectors:
- Iron and steel/non-ferrous metals
- Chemical and petroleum
- Non-metallic minerals
- Paper, pulp and print
- food and tobacco machinery
- Wood and wood products
- Transport equipment
- Textile and leather
2012 data for EU-28 reveals, that the industry is using 3200 TWh of final energy and a demand for heat of approx. 2000 TWh. Figure 2 shows the split of this heat demand per sector analysed and temperature range covered.
Figure 2: Distinction of heat demand in industry by sector and temperature range. 
This assessment reveals a practically reachable potential for heat pumps in the temperature range up to 100°C of 68 TWh, mainly in the chemical, paper, food/tobacco and wood industries (see blue shaded bars in fig. 2). Adding the sectors of hot water and space heating reveals an additional 74 TWh (see orange shaded bars in fig. 2). With technical progress, an additional potential of 32TWh in the temperature range from 100 to 150°C can be made accessible (see darkest blue bar in fig.2). In total, 174 TWh or 8.7% of all heat demand in industry can be provided by heat pumps.
The higher temperature ranges shown in grey in the graph above remain inaccessible for heat pump technology.
The result of this assessment shows the realistic potential of heat pump applications. The technical potential is much larger, but can often not be fully used due to practical considerations. A more refined, model based analysis executed by Wolf and Blesl comes to the conclusion, that the technical potential of heat pump use in industry across the 28 EU member states is 1717 PJ (477 TWh), with only 270 (75 TWh) or 15% of it being accessible if economic and practical considerations are applied.  Thus the model based approach leads to a larger technical potential, but to a much lower economic potential.
Main factors influencing the economic perspective of heat pump operations are
- Cost of fossil fuels
- Cost of electricity
- Interest rate
- Efficiency of the heat pump system
- Simultaneous availability of heat supply and heat demand, simultaneous demand for heating and cooling
- Investment cost differences.
Operation cost savings from heat pump use are possible, if the relative cost of fossil fuels and electricity are smaller than the efficiency of the heat pump system. With a rather distorted energy price, this is more and more difficult, as many governments recover the cost of greening the electric system via electricity cost itself. At the same time the price for fossil fuels does not reflect the negative environmental impact of its use. Thus relative cost of heat provision points in favour of fossil fuels.
Figure 3: Industrial heat pump potential in EU-28 
Since there is a direct relation between energy demand reduction and CO2 emissions, extending the economic potential of demand reduction will also reduce CO2 emissions from the industrial sector. The study concludes a total CO2 emission reduction potential of 86,2 Mt with 21,5 Mt (25%) of it economically viable.
Obstacles, challenges and opportunities
Main obstacles limiting the use of heat pump in industry are as follows:
- Extreme requirements on a return of investment, often not more than 2 years are accepted. This is further complicated by a comparatively low price for fossil energy.
- Risk aversion, in particular vs. heat pumps which are not trusted, but perceived as a new, unproven technology.
- Limited or no availability of best practise examples that could create trust in new solutions.
- Structural barriers in the industry
High transaction cost for the conversion of processes, as many old processes are based on steam
Need to integrate competences and responsibilities to realise a systems perspective in order to energetically optimise industrial processes and commercial applications
Both the energy savings and CO2 abatement potential of heat pumps in industrial applications is still largely unused. Creating more favourable political framework conditions will allow to reverse this trend. These include
- Adding a price signal to the use of fossil fuel
- Reduce the burden from tax and levys on increasingly clean electricity
- Provide low interest rates and loan guarantees to energy efficient investments using low carbon emission technologies such as heat pumps
- Increase research and development on standardized heat pump solutions for the identified industrial sectors
- Provide more best practise examples.
There is a joint effort necessary from policy makers and industry alike to develop the technical and economic potential of heat pump applications in industry. It needs both to pull on the same string (and in the same direction) to fully unleash the potential.
Author: Thimas Nowak, EHPA
The author thanks Stefan Wolf, University of Stuttgart and the members of EHPAs ICHP group for the input provided.
 Nellissen, P.; Wolf, S.: Heat pumps in non-domestic applications in Europe: Potential for an energy revolution. Presentation given at the 8th EHPA European Heat Pump Forum, 29.5.2015, Brussels, Belgium .
 Wolf, S.; Blesl, M.: Model-based quantification of the contribution of industrial heat pumps to the European climate change mitigation strategy. In: 2016: Proceedings of the ECEEE Industrial Efficiency Conference 2016. Berlin, 12.-14.09.2016. Stockholm, 2016
Note on the European Heat Pump Association (EHPA) aisbl:
EHPA is a Brussels based industry association which aims at promoting awareness and proper deployment of heat pump technology in the European market place for residential, commercial and industrial applications. EHPA provides technical and economic input to European, national and local authorities in legislative, regulatory and energy efficiency matters. EHPA has recently introduced a working group on industrial and commercial heat pumps (ICHP) to increase recognition for this area of application and its contribution potential to the EU’s climate and energy targets.
About Thomas Nowak
Thomas represents the European Heat Pump Association (EHPA) as Secretary General in Brussels. His main responsibilities are the representation of the industry at the European institutions, networking with other stakeholders in the field of heating and cooling as well as the management of the association and its future development. Thomas has published several articles on heat pump technology and the integration of heat pumps in the energy system and has spoken in European and international conferences.