Thinking ahead: Future prospects and market potential of high-temperature heat pumps.

This situation is unlikely to last much longer. A rising CO₂ price and increasing grid charges will further drive up the cost of fossil fuels. District heating plans and the electrification of industrial processes are already reducing the number of businesses connected to gas grids – leaving fewer customers to bear the rising network charges, which will only push prices higher.

Transformation of process heat

Additionally, the first gas grid operators are planning to decommission networks. In Mannheim, for instance, MVV Energie AG aims to shut down the gas network by 2035 as part of its strategy to achieve climate neutrality by 2045. Meanwhile, Bavaria, a heavily industrialized region, is targeting full climate neutrality by 2040. The message to industrial companies is clear: the time to find suitable solutions is now. "For industrial enterprises, the focus is on transforming process heat generation. There’s no one-size-fits-all solution," explains Ralf Klöpfer, MVV’s Chief Sales Officer. "Instead, customized approaches are required, tailored to the specific needs and processes of each company. A technology-neutral strategy is advisable, incorporating hydrogen, high-temperature heat pumps, power-to-heat solutions, waste heat recovery, biomass, and thermal waste utilization."

Will biomethane and hydrogen be economically viable in the future?

Despite the emphasis on technology neutrality, one fact remains clear: carbon-neutral or low-emission gases such as biomethane or green hydrogen will remain scarce and expensive for the foreseeable future. The city of Hamburg shares this outlook, anticipating the closure of gas networks as well. On its website, the city states: "Even in the foreseeable future, hydrogen will remain a scarce, valuable, and, in the medium to long term, expensive fuel." This raises the question of whether using such energy carriers where they are not strictly necessary will be economically viable. The German Association of Energy and Water Industries (BDEW) estimates that by 2030, prices for biomethane and hydrogen will range between 37.50 €/MWh and 134 €/MWh [2], with the upper end of this range being the more realistic estimate. For comparison, European Energy Exchange AG data shows that wholesale gas prices stood at around 50 €/MWh in early January 2025. [3]

High-temperature heat pumps as a key technology

A study by Fraunhofer ISE, simulating four future scenarios ranging from "technology neutrality" to "persistence," concluded that high-temperature heat pumps will be a key technology for process heat up to 200 °C. These systems have the potential to supply between 44 % and 64 % of low-temperature process heat by 2045.

Some of these trends are already evident, driven by geopolitical tensions, supply chain issues, regulatory shifts, and increasing political protectionism. In 2024, industrial electricity prices were about 30 % lower than the previous year, whereas industrial gas prices fell by only 20 %. While residual effects of the 2022 energy crisis are still noticeable, the trajectory is clear: natural gas will continue to become more expensive, and electricity prices are unlikely to rise at the same pace.[5]

And the industry sector? It must act now to proactively address these developments.

From the European Green Deal to Germany’s Climate Protection Act, which is aiming to decarbonize energy generation and process industry in line with the goals of the Paris Climate Agreement, policymakers are creating legal and financial incentives while simultaneously phasing out subsidies for climate-damaging fossil fuels: The rising CO₂ price in the context of certificate trading is a key pressure point, especially for companies with high energy consumption. Companies still relying on fossil fuels face rising costs and declining competitiveness, while those that embrace decarbonization early stand to benefit.

Generous funding opportunities at both the national and EU levels are helping to ease the transition. Germany’s Federal Funding for Energy and Resource Efficiency in Business program, for example, covers up to 55% of the costs for installing high-temperature heat pumps. Meanwhile, the EU’s Industrial Decarbonization Accelerator Act supports the shift away from fossil fuels while gradually phasing out subsidies for carbon-intensive energy sources.

For manufacturers, the message is clear: transitioning to climate-friendly technologies is inevitable – and the best time to act is now.

New synergies for renewable energy: Industrial heat pumps unlock integration potential

The use of industrial heat pumps enables vertical and horizontal integration levels that are simply not possible with fossil fuels.

Potential applications include:

• Efficient waste heat recovery and reuse
• On-site solar power generation and utilization for cost reduction
• Integration of waste heat from other processes (e. g. data centers, biogas plants)
• Combination with mechanical vapor recompression for steam temperatures above 200 °C
• Dynamic electricity contracts for grid stabilization and further cost reduction
• Combining industrial heat pumps with solar thermal and geothermal plants
• Utilizing synergies in combination with heat and battery storage systems for cost optimization and grid stabilization

Against this backdrop, high-temperature heat pumps offer the opportunity to turn the Industry 4.0 concept into a standard. Smart, interconnected technologies, big data, and intelligent manufacturing enable the development of smart factories where demand and supply, efficiency and flexibility, economic success, and sustainable production are balanced.

Conclusion: The future is electric – and it starts now

The decarbonization of industrial process heat generation is no longer a vague possibility or distant trend – it is already a reality. Regulatory requirements, rising CO₂ prices and economic advantages make high-temperature heat pumps both financially attractive and environmentally sustainable. The aim: an industry that is energy-efficient, resilient, and intelligent.

Companies that act now secure not only generous funding and long-term cost benefits but also position themselves as pioneers of climate-friendly and economically sustainable production.