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Heat Pumps for Industry – A Guide

Large high-temperature heat pumps are essential for the decarbonization of industry. The technology is established, and the market is growing. However, integration into production processes is complex. For an optimal solution, this guide offers valuable support and background information.

Manuel Gräber

Manuel Gräber

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August 22, 2025

Heat Pumps Industry

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The following section provides a detailed and comprehensible explanation of the necessary theoretical foundations and background for the successful integration of an industrial heat pump. If you have limited time for reading, we offer manufacturer-independent consulting and system design for heat pump solutions and are happy to discuss all topics with you directly. For more information, see Industrial Energy Consulting or contact us directly.

What is a Heat Pump?
A heat pump is a technical device that transfers heat from a lower temperature level to a higher one, in much the same way that a water pump moves water from low to high pressure. While some electrical energy is required for this process, it is significantly less than the amount of usable heating energy produced. As a result, a heat pump is far more efficient than direct electric heating or the combustion of raw fuels.

Industrial Demand Profiles Differ from Residential Use

Gas boiler out – heat pump in? In residential buildings, it really is that simple. Gas boilers can be replaced one-to-one with heat pumps. The heat source (the low-temperature level) is free environmental heat, either from the outdoor air or from the ground. And for the vast majority of houses, a maximum supply temperature of 65 °C is sufficient, even in the coldest winter. The market already offers a wide range of heat pumps designed precisely for this purpose, which can be purchased off the shelf.

For industrial facilities, however, the situation is quite different. In principle, one could also use free geothermal energy or ambient air and raise the temperature level with a heat pump to the 200 °C required by the existing steam network. But such an approach will not lead to economically viable solutions. Both investment and operating costs (electricity costs) are far too high with such a blunt method. Heat pumps are technically more complex than gas boilers. Their optimal and cost-effective integration into an industrial energy system is only possible through a comprehensive energy analysis. More on this in the following sections.

Typischer Temperaturbereich der Prozesswärme in der Industrie

In addition to the required temperatures, there is a second major difference between industry and residential use: the specific energy demand. No matter which reference value is chosen – for example, usable floor area – energy consumption in industry is significantly higher. This leads to different assessments when it comes to the cost-effectiveness of efficiency measures.

You are probably familiar with the widespread myth: for a heat pump to function in residential buildings, a deep energy retrofit is required. This is simply not true, since a heat pump can, of course, also heat a poorly insulated older building. However, it must be sized accordingly, which makes it more expensive to purchase, and in operation it naturally consumes more electricity than in a well-insulated building. (See Fraunhofer study „Wärmepumpen in Bestandsgebäuden“, 2020)

From a purely economic perspective, insulation often does not pay off. Payback periods of 30 years are not uncommon. This means that the simple solution — gas boiler out, heat pump in — actually makes sense here.

In industry, the situation is somewhat different. The same physical principles apply as in residential buildings:

  • If the heat pump is large enough, it can replace the gas boiler on a one-to-one basis.
  • With increased energy efficiency, a smaller heat pump is sufficient.
  • Higher energy efficiency leads to lower operating costs.

But the conditions are different. Industrial facilities have a very high and continuously occurring energy demand. As a result, operating costs carry more weight relative to investment costs. Payback periods for investments in energy efficiency are therefore much shorter. Especially in cases where efficiency has been neglected for years because natural gas was very inexpensive, savings of 30 % with payback times of <2 years are not uncommon.

If you are already considering the use of a heat pump, you should also carefully examine the efficiency of the entire heating and cooling supply system. First, there are often low-hanging fruit to save both energy and money. Second, this prevents you from installing an unnecessarily large and inefficient heat pump.

You should make use of this potential. The challenge, however, is that the most significant efficiency opportunities can only be identified by zooming out and systematically analyzing the overall heating and cooling demand of the entire system. Small-scale individual measures, such as replacing light bulbs with LEDs or utilizing waste heat from compressed air systems, may make sense on their own — but they do not necessarily address the main drivers of efficiency.

Critical for Efficiency: the Temperature Lift

To successfully integrate heat pumps into industrial processes, a basic understanding of the underlying physical principles is essential. This is precisely what we aim to convey here using the previously introduced analogy between a heat pump and a water pump.

If you want to pump water to a height of 50 meters, you need a larger, more powerful pump than if you only want to pump it 2 meters high. For the same volume flow, the larger pump requires significantly more input power.

What the height is for a water pump, the temperature lift is for a heat pump. A residential heat pump in the backyard must, on an average winter day, raise ambient heat from outdoor air at 0 °C to the 40 °C required by the heating system. That corresponds to a temperature lift of 40 K. If we were to raise the same amount of heat to a temperature of 200 °C, it would require significantly more electrical energy.

The temperature lift of a heat pump is therefore analogous to the delivery height of a water pump — it is the decisive factor when it comes to the required energy input. Naturally, the energy input also increases with the required heating capacity. To obtain a dimensionless comparison value, the useful output (heating capacity) is set in relation to the input (electrical power), resulting in the so-called COP (Coefficient of Performance). The higher the number, the better.
A COP of 1 corresponds to the direct conversion of electrical energy into heat. That is nothing special — it can be achieved very simply with an electric heating rod. For that, a heat pump is not needed.

Let us examine how the COP changes with increasing temperature lift:

Wärmepumpen Industrie COP vs Temperaturhub

With small temperature lifts, very high COP values can be achieved. But already at a temperature lift of 50 K, the COP falls well below 4, and at 100 K it is around 2. This means that every degree of reduction in the target temperature and every degree of increase in the source temperature directly leads to lower electricity costs. Question existing temperature requirements: does the process really need steam at 200 °C, or would 150 °C be sufficient?

The Major Efficiency Opportunity

What are the major opportunities to increase efficiency in heating and cooling supply, and thereby save investment and operating costs with a smaller heat pump?

Industrial production processes require large amounts of energy. Of the energy input (electricity and gas), only a fraction leaves the plant as stored energy in the product. The principle of energy conservation applies. This means that the majority of the input energy is released into the environment — for example, through exhaust streams, cooling towers, ventilation air, or uncontrolled heat losses.

The reuse of waste heat generated in process steps is by far the greatest opportunity for improving energy efficiency. Legislators have also recognized this and, with the Energy Efficiency Act (EnEfG), have introduced the obligation to systematically record and utilize waste heat streams.

However, making effective use of waste heat is not nearly as simple as it sounds. Industrial processes involve a wide variety of heat sources and sinks at different temperature levels. The highest overall efficiency can only be achieved by intelligently interconnecting these heat flows.

The EnEfG states it as follows:
"In order to achieve the greatest possible efficiency gains, recovered waste heat should be reused multiple times in a cascading sequence […] at decreasing temperature levels."

To make this clearer for non-thermodynamic experts: with heat flows, it is not only the quantity (energy in kWh) that matters, but above all the temperature. With 1 kWh of waste heat at 300 °C, much more can be achieved than with 1 kWh at 50 °C. Therefore, the waste heat from one subprocess should always be used at the highest possible temperature in the next subprocess. This then produces waste heat at a lower temperature, which can be used in a third subprocess.

That this approach makes sense and leads to the best overall efficiency is easiest to understand again with the analogy between water and heat. Imagine waterwheels at different heights, driven from above by water. The simplest solution would be to supply all waterwheels directly from a common water source. That works, but reusing the water from higher to lower waterwheels results in a system that consumes significantly less water overall. And the most efficient system is achieved only if no potential is wasted and strict attention is paid to cascading interconnections.

This means that before integrating a heat pump into your energy system, you should systematically examine heat demands and waste heat streams (Pinch Analysis). A heat pump should only generate the heat that remains after direct waste heat utilization.

What is a Pinch Analysis?
Pinch analysis, developed in the 1970s by Bodo Linnhoff and others, is a proven method for optimizing energy consumption in industrial processes. It identifies points of maximum heat exchange in order to improve energy efficiency and reduce costs. The main steps are data collection, creation of composite curves, identification of the pinch point, and optimization of heat exchange.

Double Benefit: the Heat Pump as a Refrigeration Machine

From a technical standpoint, a heat pump is nothing more than a refrigeration machine. It has a hot side and a cold side. So far, we have only discussed using the hot side for generating process heat. With the cold side, however, we could — as in residential buildings — cool ambient air, soil, or river water, thereby utilizing free environmental heat. Or, even better, we could use it to cool a subprocess that already requires cooling. In this way, in addition to producing process heat, we also save on cooling that would otherwise be generated with electricity.

In residential buildings, such dual use could theoretically also work. A refrigerator, for instance, could serve as a heat source for the heating heat pump. In practice, however, the output of a refrigerator is far too low to make this worthwhile.

In industrial facilities, the situation is very different. Alongside process heat, significant amounts of cooling are often required. Whether it ultimately makes sense to use these cooling demands as a source for an industrial heat pump is far from trivial to answer. This question is closely linked to the waste heat utilization discussed in the previous section.

As a general rule: it is better to interconnect suitable heat flows directly — typically through heat exchangers. Only the remaining heat should be used as a source for a heat pump.

With Pinch Analysis, there is an established method for designing an optimal concept for waste heat utilization and heat pump integration. Such a systematic approach significantly increases the profitability of investing in a heat pump and a suitable heat recovery system.

Moist Exhaust Air as a Heat Source

When searching for heat sources for a heat pump, one option is often overlooked: moist exhaust air from drying processes.

The enthalpy of vaporization of water is very high. This means that during drying (= evaporating water), a large amount of energy is introduced into the process, which is then released unused into the environment with the moist exhaust air. By condensing the moisture contained in the exhaust air, this energy can be recovered — in other words, waste heat can be utilized. The lower the temperature at which the waste heat is used, the more moisture can condense and the more energy can be recovered.

If the recovered waste heat can be used at a sufficiently low temperature somewhere else in the overall process, this can be done directly via a heat exchanger. Otherwise, moist exhaust air is also very well suited as a heat source for a heat pump. The heat pump raises the temperature level, and the latent heat of condensation can, for example, be directly reused in the drying process. This is exactly what heat pump dryers do, consuming around 60% less electricity than vented dryers.

Are you still drying with exhaust air?

Using Modeling to Close Data Gaps

For a heat pump to be both economically and energetically efficient, a detailed analysis of heating and cooling demand as well as the available waste heat streams is required. This, in turn, requires data. In many industrial facilities, energy quantities are only recorded centrally at a few points by meters. As a result, both detailed temporal resolution and the allocation of energy flows to individual subprocesses are missing.

The new EnEfG requires the detailed recording and reporting of all waste heat streams. There is therefore already legal pressure to act, which you should take as an opportunity to address the issue and create a valuable data basis for significantly increasing energy efficiency.

Industrial measurement technology and data acquisition systems are expensive and complex to install. On the other hand, the trend toward home automation has produced inexpensive and easy-to-connect sensors. We have already successfully deployed such sensors for customers. Contact us if you would like to learn more about this.

In addition to new or existing sensors, mathematical modeling of the main consumers can significantly improve data quality. Mass and energy balances help reduce measurement errors and provide additional insights. The EnEfG explicitly allows the use of such modeling, as stated in the Guidance for the Waste Heat Platform on the Legal Regulations of §17 Energy Efficiency Act (EnEfG), Version 1.2:

"Modeling is therefore always permitted to the same extent as estimation. Furthermore, modeling must always be carried out in a plausible and traceable manner. A model is considered plausible if the underlying methods, calculations, assumptions, and input parameters reflect the actual circumstances as well as physical laws. In addition, the modeling must be traceable for third parties, for example in the event of a spot check."

System simulation and modeling are the core expertise at TLK Energy. We are happy to support you in filling data gaps with well-documented solutions.

Selecting the Right Heat Pump

Strictly speaking, the term heat pump is very general and encompasses a wide range of technologies for raising heat from lower to higher temperatures. Here, however, we limit ourselves to compression heat pumps. This by far most widespread technology is based on the compression of gases. Differences arise from:

  • Working fluid (refrigerant)
  • Cycle configuration
  • Compressor technology

The most efficient configuration differs depending on the application. Key parameters are the temperature levels (heat source and heat sink) as well as the so-called temperature spread on the secondary sides. This is the temperature difference of the heat transfer fluids. For example, from a thermodynamic perspective, it makes a big difference whether air is heated from 20 °C to 120 °C or, with the same amount of energy, water is heated from 110 °C to 120 °C. For large temperature spreads on the hot side, CO₂ (R-744) is an excellent refrigerant.

The market for industrial heat pumps is currently developing rapidly. On the one hand, there are established manufacturers from the refrigeration sector, and on the other hand, new start-ups are developing heat pumps. If you need assistance in comparing offerings and selecting the right system, it is best to seek advice from manufacturer-independent experts.

Energy Storage Will Be Economically Viable in the Future Energy Market

With the growing share of renewable energies, the electricity market is becoming increasingly volatile. Prices fluctuate strongly over the course of the day and throughout the year. At the same time, significant investments are being made in the development and cost reduction of electrical batteries. These global megatrends will intensify in the coming years, making energy storage increasingly attractive for industrial enterprises from an economic perspective.

Energy procurement and the electricity market are complex topics that go beyond the scope of this guide. In summary, the following opportunities exist to save or even generate revenue with energy storage:

  • Reduce demand peaks and thus connection capacity
  • Shift energy consumption to periods of lower (or even negative) prices
  • Sell flexibility to the grid operator
  • Feed electricity back into the grid during periods of high prices

With the installation of a heat pump, two fundamental aspects of energy storage change:

  1. Significantly more electricity is required.
  2. Electrical energy can be efficiently stored in thermal storage systems.

Point 1 is easy to understand: after all, large portions of natural gas consumption are replaced by electricity. Point 2, however, may be less obvious. The heat pump converts electricity into heat. Instead of storing the electricity in batteries before this conversion, the heat can just as well be stored after the conversion. And if the cold side of a heat pump is used, a cold storage system also works perfectly. Ice storage systems, for example, have been used for decades in the food industry to avoid peak loads of refrigeration machines.

The simplest solution for thermal storage systems is large water tanks. For unpressurized water tanks, the temperature is naturally limited to 100 °C. For higher temperatures, several start-ups are already developing suitable technologies.

The difference between electrical and thermal storage is that electrical storage can also feed energy back into the power grid, whereas stored thermal energy can typically only be used internally.

In addition to the technical options, the future development of the electricity market is crucial for the economic viability of energy storage. But the global trends and the physics are clear: on the path to 100% renewable energy, supply will fluctuate more and more. Storage will pay off.

We are happy to support you in evaluating various technical options for different scenarios through simulation studies.

Conclusion: An Economically Viable Heat Pump in Industry Requires Pinch Analysis

For heat pumps in industry, fundamentally different framework conditions apply than in residential buildings. The economically and energetically optimal integration of heat pumps into industrial processes is therefore considerably more challenging. On the other hand, this also creates greater opportunities to develop an efficient overall system that quickly pays for itself through low operating costs. Pinch Analysis provides an established method to systematically address this challenge.

Manuel Gräber

Dr.-Ing.

Manuel Gräber

Managing Director

TLK Energy

Dr.-Ing. Manuel Gräber works on modeling, optimization and controlling of thermal systems since 2008. He received his PhD at TU Braunschweig after finishing his thesis on “Energy-Optimal Control of Refrigeration Processes”. As research assistant at TU Braunschweig and employee of TLK-Thermo GmbH, Manuel Gräber carried out numerous research and development projects with various partners from industry. His focus is the combination of a broad theoretical knowledge base in different disciplines with practical experience of concrete engineering projects.

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