Sustainability Atlas
Clean Energy·14 min read··...

Operational playbook: scaling Industrial heat & high-temp electrification from pilot to rollout

A step-by-step rollout plan with milestones, owners, and metrics. Focus on retrofit workflows, grid impacts, and incentives that move adoption.

Industrial process heat represents one of the most significant yet underappreciated opportunities in global decarbonization. In 2024, industrial heat accounted for more than 20% of global energy consumption, with approximately 80% still generated by fossil fuels (IEA Renewables 2025). The global industrial electrification market reached $43.95 billion in 2024 and is projected to grow to $95.79 billion by 2034 at a CAGR of 8.1%—yet electricity's share of industrial heat consumption remained at just 4% in 2024. The path forward is clear: the International Energy Agency projects this share to triple to 12% by 2030, representing a massive transformation in how factories, refineries, and manufacturing plants generate the heat essential to their operations. This playbook provides procurement teams, sustainability officers, and operations leaders with a structured framework for moving from pilot demonstrations to full-scale rollout.

Why It Matters

Industrial process heat is responsible for approximately 18% of global greenhouse gas emissions annually, making it the largest single source of industrial carbon footprint. In the United States alone, the industrial sector produced 23% of gross GHG emissions in 2022, with low-temperature industrial heat (<200°C) contributing 171 million metric tons of CO₂—representing 3.5% of all U.S. energy-related emissions (DOE Industrial Decarbonization Roadmap).

The economic case for electrification has strengthened considerably. McKinsey estimates that electrifying all process heat under 300°C with clean electricity by 2050 could reduce total industrial GHG emissions by approximately 30% in the United States. Heat pump-based solutions alone could prevent 2.2 gigatonnes of CO₂ emissions by 2050 under net-zero pathways. Beyond environmental benefits, volatility in natural gas prices has created compelling operational cost advantages—industrial heat pumps use one-third to one-fifth the energy of conventional boilers while providing greater price predictability.

For procurement teams, the transition represents both risk mitigation and competitive advantage. Companies that delay electrification face increasing exposure to carbon pricing mechanisms, supply chain pressure from customers with Scope 3 reduction targets, and potential stranded asset risk as fossil-fuel heating equipment reaches end of life.

Key Concepts

Understanding the technical landscape is essential before initiating any electrification program. Industrial heat requirements vary significantly by temperature range, and technology maturity differs accordingly.

Temperature Segmentation

The U.S. industrial sector's heat requirements break down as follows: 19% below 100°C, 25% between 100-200°C, and approximately 50% below 400°C. Technologies for different temperature ranges are at varying stages of commercial readiness.

Temperature RangeApplicationsPrimary TechnologiesMaturity Level
<100°CFood processing, brewing, textilesHeat pumps, electric boilersCommercial
100-200°CPulp and paper, chemicals, light manufacturingHigh-temp heat pumps, MVR systemsCommercial/Early commercial
200-400°CChemicals, steam systemsAdvanced heat pumps, electric boilers, thermal storagePilot/Early commercial
>400°CSteel, cement, glass, petrochemicalsElectric arc furnaces, thermal batteries, resistance heatingDemonstration/Pilot

Core Technology Categories

Heat Pumps: Leverage thermodynamic cycles to extract low-grade heat and upgrade it to higher temperatures. Modern industrial heat pumps can achieve coefficient of performance (COP) values of 3-5, meaning they deliver 3-5 units of heat for every unit of electricity consumed. In 2024, heat pumps accounted for a considerable share of low-temperature industrial heating installations, with capacity to meet 44% of industrial process heat demands requiring temperatures up to 160°C.

Thermal Energy Storage (TES): Systems like those developed by Rondo Energy and Antora Energy store renewable electricity as heat in materials such as insulated bricks or carbon blocks, delivering temperatures from 100°C to 1,500°C. These "heat batteries" enable industrial facilities to time-shift electricity consumption to low-cost periods while providing continuous heat supply.

Electric Boilers and Resistance Heating: Direct conversion of electricity to heat through resistive elements. While less efficient than heat pumps in thermodynamic terms, electric boilers offer simplicity, reliability, and the ability to achieve very high temperatures (up to 2,500°C with specialized systems).

What's Working

Several deployment models and technical approaches have demonstrated clear success in moving from pilot to commercial scale.

Drop-in Product Approaches

AtmosZero's modular electric boiler system exemplifies the "product not project" philosophy that accelerates adoption. Rather than requiring custom engineering for each installation, their standardized units can replace gas-fired boilers with minimal facility modification. Their installation at New Belgium Brewing in Colorado in May 2025 delivers 1 ton/hour of steam, targeting 30-40% of the brewery's total steam needs. The company opened an 83,000 square foot manufacturing facility in Loveland, Colorado in 2025, demonstrating the scalability of this approach.

Energy-as-a-Service Models

Skyven Technologies has pioneered an energy-as-a-service model that removes the primary barrier to adoption—high upfront capital costs. Their bus-sized industrial steam-generating heat pumps, capable of producing steam at 200-400°C, are deployed through service agreements where Skyven retains ownership and shares operational savings with the host facility. The U.S. Department of Energy selected Skyven for funding up to $145 million for deployment at Western New York Energy's facility, validating the model's commercial viability.

Thermal Storage for Grid Flexibility

Rondo Energy's deployment of a 100MWh "Heat Battery" in October 2025 demonstrates the synergy between renewable energy integration and industrial heat. By charging during periods of low electricity prices (often when renewable generation peaks) and discharging heat continuously, these systems achieve cost parity with fossil fuels while enabling grid balancing. Their partnership with Siam Cement and memorandum of understanding with Aramco for GW-scale deployment indicate the technology's trajectory from demonstration to infrastructure-scale.

Government-Industry Partnerships

The DOE's Industrial Demonstrations Program has catalyzed deployment by de-risking first-of-a-kind installations. The Diageo project, with funding up to $75 million, pairs Rondo Energy heat batteries with electric boilers at two beverage facilities in Kentucky and Illinois. The project targets approximately 14,000 metric tons of CO₂ reduction annually while generating operational data that will inform subsequent deployments.

What's Not Working

Despite progress, significant barriers continue to impede widespread adoption.

Electricity-to-Gas Price Ratios

In many U.S. regions, electricity remains taxed and priced at levels that make electrification economically challenging without subsidies. While heat pumps are thermodynamically more efficient, the price differential between electricity and natural gas often erases this advantage. Policy interventions such as carbon pricing or adjustments to utility rate structures are necessary to level the playing field.

Grid Infrastructure Constraints

Industrial facilities often require substantial electrical capacity for full electrification—capacity that existing grid connections cannot provide. Interconnection queues in many regions extend 3-5 years, creating project timeline uncertainty that conflicts with industrial capital planning cycles. The DOE's $6 billion Industrial Demonstrations Program was oversubscribed, indicating demand far exceeds available infrastructure and funding support.

Equipment Lifecycle Timing

Industrial heating equipment (boilers, furnaces, kilns) typically operates for 20-40 years. Companies are understandably reluctant to retire functional assets early, especially when replacement technologies are perceived as higher risk. This "technology lock-in" means that electrification decisions made today must account for decades-long capital planning horizons.

High-Temperature Technology Gaps

While solutions for temperatures below 200°C are commercially mature, applications requiring temperatures above 400°C—including steel, cement, glass, and petrochemical production—remain in demonstration phases. Electric arc furnaces are proven for steel, but electrified cement kilns, glass furnaces, and steam crackers for chemicals are 2-5 years from commercial deployment.

Workforce and Supply Chain Constraints

The specialized workforce required to design, install, and maintain industrial electrification equipment is limited. Similarly, supply chains for components like high-temperature compressors, specialized refrigerants, and seals rated for extreme conditions are not yet scaled to meet projected demand.

Key Players

Established Leaders

Siemens Energy: Offers comprehensive industrial electrification solutions including electric heating systems, heat pumps, and grid integration services. Their digital twin capabilities enable optimized system design and predictive maintenance.

Danfoss: A global leader in high-temperature heat pump technology with extensive deployment experience in European industrial facilities. Their compressor technology enables temperatures up to 150°C in commercial applications.

GEA Group: Major provider of steam-producing heat pumps for food and beverage, dairy, and pharmaceutical applications. Their systems achieve COPs of 4-5 in typical industrial settings.

Emerson Electric: Provides control systems and automation technology essential for integrating electrified heating into existing industrial processes. Their Ovation platform enables real-time optimization of hybrid heating systems.

Emerging Startups

Rondo Energy: Pioneer in high-temperature thermal energy storage using insulated brick systems. Their Heat Battery technology stores renewable electricity and delivers heat up to 1,500°C. Recently deployed 100MWh system and secured partnership with Aramco for GW-scale development.

AtmosZero: Developer of modular electric boilers designed for drop-in replacement of gas-fired systems. Raised $21 million Series A in 2024 and opened dedicated manufacturing facility in Colorado.

Skyven Technologies: Creator of energy-as-a-service model for industrial heat pumps capable of 200-400°C steam production. Selected for up to $145 million DOE funding.

Antora Energy: Developed solid-state thermal batteries using carbon blocks with thermophotovoltaic conversion for electricity generation. Stanford-backed company has raised $237 million and achieved 35% TPV conversion efficiency verified at NREL.

Karman Industries: Focused on electrified industrial thermal energy systems. Raised $7.5 million seed extension in January 2025 (total $11.5 million raised).

Key Investors

Breakthrough Energy Ventures: Bill Gates-backed fund with substantial investments in industrial decarbonization technologies, including thermal storage and heat pump companies.

Evok Innovations: Led Zero Industrial's $10 million Series A in April 2025 for thermal energy storage replacing fossil fuels in industrial applications.

Prelude Ventures: Active investor in breakthrough industrial decarbonization technologies with portfolio companies across heat pumps, thermal storage, and process electrification.

Suma Capital: European fund that closed €210 million SC Net Zero Ventures I fund in 2025 specifically targeting industrial decarbonization scale-ups.

Sector-Specific KPI Benchmarks

SectorKey MetricCurrent BaselineTarget (2030)Leading Indicator
Food & Beverage% steam from electric sources5-10%40-60%CO₂ per ton product
Pulp & PaperThermal energy intensity (GJ/ton)12-18 GJ/ton8-12 GJ/tonFossil fuel consumption
ChemicalsSteam system efficiency70-80%90-95%Peak demand charges
GlassFurnace electrification rate<5%20-30%Scope 1 emissions
MetalsElectric arc furnace share70% (steel)85%+Energy cost per ton

Examples

Diageo: Integrated Heat Batteries at Beverage Facilities

Diageo, the global beverage company, partnered with Rondo Energy and the National Renewable Energy Laboratory (NREL) on a DOE-funded project at two facilities in Kentucky and Illinois. The project combines Rondo Heat Batteries with electric boilers to replace natural gas-fired systems used in spirits production. The deployment targets 14,000 metric tons of annual CO₂ reduction while generating operational data for broader industry adoption. The project exemplifies how government funding can de-risk first-mover investments while creating replicable deployment templates.

New Belgium Brewing: Drop-in Steam Electrification

New Belgium Brewing, an employee-owned craft brewery based in Fort Collins, Colorado, installed AtmosZero's modular electric boiler system in May 2025. The installation produces 1 ton/hour of steam, addressing 30-40% of the brewery's steam requirements. The project demonstrates that drop-in solutions can achieve meaningful emissions reductions without requiring complete system overhauls. The remaining steam demand provides a clear pathway for subsequent phases of electrification as technology continues advancing.

BASF Ludwigshafen: Large-Scale Industrial Heat Pump

German chemicals giant BASF secured up to €310 million in funding through Germany's Carbon Contracts for Difference (CCfD) scheme for an industrial heat pump installation at its Ludwigshafen complex—the world's largest integrated chemical production site. The heat pump will generate steam for process applications, demonstrating that electrification is viable at the largest scales of chemical manufacturing. The CCfD mechanism provides revenue certainty that bridges the cost gap between electrified and conventional heating during the transition period.

Action Checklist

  • Conduct thermal energy audit: Map all heating loads by temperature requirement, capacity, and operating hours to identify electrification-ready applications (prioritize loads <200°C)
  • Assess grid interconnection capacity: Engage utility early to determine available capacity and timeline for upgrades; begin interconnection applications for capacity increases if needed
  • Evaluate total cost of ownership (TCO): Model 15-20 year TCO scenarios including carbon pricing trajectories, electricity price forecasts, and maintenance costs for both electrified and conventional options
  • Identify pilot candidates: Select 2-3 thermal loads for initial electrification based on technical readiness, operational importance, and visibility to stakeholders
  • Engage equipment vendors: Request proposals from established manufacturers (Danfoss, GEA, Siemens) and emerging startups (AtmosZero, Skyven, Rondo) to compare technical specifications and commercial terms
  • Explore funding mechanisms: Apply to DOE Industrial Demonstrations Program, state incentive programs (Pennsylvania Rise PA, California Indigo Program), and investigate CCfD-style arrangements where available
  • Develop workforce training plan: Identify required competencies for operations and maintenance of electrified systems; engage equipment vendors and community colleges for training programs
  • Establish monitoring and verification protocols: Define KPIs, measurement procedures, and reporting cadence to track pilot performance and build business case for scale-up

FAQ

Q: What temperature threshold determines whether industrial heat can be economically electrified today?

A: Applications requiring temperatures below 200°C are generally electrifiable with commercially available heat pump and electric boiler technology at competitive economics, particularly in regions with favorable electricity pricing or carbon pricing mechanisms. Roughly 44% of U.S. industrial heat demand falls in this range. Applications between 200-400°C are increasingly addressable with emerging high-temperature heat pumps, while temperatures above 400°C typically require thermal storage or direct resistance heating technologies that are still in demonstration phases.

Q: How do thermal energy storage systems like Rondo's Heat Battery achieve cost competitiveness with natural gas?

A: Thermal storage systems charge during periods of low electricity prices—often when renewable generation exceeds demand—and discharge heat continuously throughout production operations. By arbitraging electricity price differentials and avoiding peak demand charges, these systems can achieve levelized cost of heat comparable to or below natural gas, particularly when accounting for carbon pricing. The capital cost is offset by operational savings and, in many jurisdictions, by investment tax credits and other incentives.

Q: What is the typical payback period for industrial heat pump installations?

A: Payback periods vary significantly based on electricity and gas price ratios, operating hours, and available incentives. In favorable conditions (low electricity prices, high capacity factors, available tax credits), payback periods of 3-5 years are achievable. The DOE estimates that production tax credits and investment tax credits at highest support levels could increase cost-competitive heat pump adoption by more than 20x. Energy-as-a-service models like Skyven's eliminate payback considerations entirely by shifting to operational expenditure.

Q: How should companies sequence electrification investments across multiple facilities?

A: Begin with facilities having the most favorable grid access, lowest electricity prices, and highest-visibility sustainability commitments. Pilot installations should prioritize applications where technology risk is lowest (temperatures <150°C) to build operational experience and internal capabilities. Use learnings from initial deployments to refine procurement specifications, training programs, and monitoring protocols before scaling to more challenging applications.

Q: What role do government incentives play in the business case for industrial heat electrification?

A: Government incentives are currently essential for most industrial heat electrification projects to achieve positive net present value. The U.S. DOE allocated $43 million in 2024 specifically for industrial decarbonization technologies, while larger demonstration projects have received funding up to $145 million. Investment tax credits of 30% significantly improve project economics. As technology costs decline and carbon pricing increases, the role of incentives will shift from being essential to accelerating adoption timing.

Sources

Topics

industrialheatopexriskLCACfDinterconnection

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