Steam made by heat pumps can help clean up industry and manufacturing

Can electric-powered heat pumps replace the fossil-fueled boilers that account for about 7 percent of the world’s greenhouse gas emissions? Sure, says Addison Stark, CEO of AtmosZero — as long as they’re designed to be cost-effectively deployed in boiler rooms where steam is used to generate heat.

On Tuesday, AtmosZero unstealthed with a heat-pump boiler meant to fill this niche in the industrial decarbonization landscape. The Fort Collins, Colorado–based startup, backed by $7.5 million from investors led by Energy Impact Partners and $500,000 from the Department of Energy’s ARPA-E program, also announced its first pilot project: a 650-kilowatt boiler being installed at the Fort Collins headquarters of New Belgium Brewing in partnership with heating and cooling engineering giant Danfoss.

It’s a novel application of a technology that’s rarely been used for industrial process heat. Most people think of heat pumps as tools for warming air and water inside buildings, not generating steam at 150 degrees Celsius and at pressures needed for industrial applications, as AtmosZero’s systems are designed to do.

But ​“the only reason heat pumps have not delivered boiled water before is that no one has built heat pumps to boil water before,” Stark said. Technically speaking, there are few barriers to making steam with the same technology that has now improved enough to keep homes and buildings comfortably warm during subfreezing winters.

To be clear, industrial heat pumps do exist today. Major manufacturers such as Danfoss, Emerson and Siemens make systems primarily for use in larger-scale industrial settings. But according to an October report from think tank Energy Innovation, industrial process heating made up less than 2 percent of the $53 billion to $68 billion global heat-pump market in 2021.

The main reason heat-pump manufacturers haven’t gone bigger into mass-market industrial heat pumps is that customers haven’t been asking for them, Stark said. ​“Replacing trusty old gas boilers has not been a high priority” for most industrial-steam users to date.

Cheap fossil gas has also played a role. A 2022 report from the American Council for an Energy-Efficient Economy noted that U.S. industrial heat-pump developments from 1980 through 2000 were undermined by the increased supply and low cost of fossil gas in the wake of the U.S. fracking boom.

But in recent years, heat-pump technologies have improved, gas prices have become more volatile, and more companies are striving to hit increasingly aggressive decarbonization goals and government mandates. As a result of this confluence of factors, ​“the boiler needs to be reckoned with,” Stark said. The global industrial boiler market totals about $18 billion in annual equipment sales, he estimated, and ​“we’re planning on scaling up as aggressively as is feasible” to meet that need.

The steam-making heat pump

Manufacturing industries account for about one-fifth of U.S. energy-related greenhouse gas emissions, and process heating makes up about 30 percent of those industrial emissions. Half of that process heating comes from steam boilers, Stark said.

Today, the vast majority of those boilers burn fossil fuels. While electric-powered boilers do exist, they come in the form of lower-efficiency electric resistance systems — essentially electrically heated coils of metal that boil water — or higher-voltage electrode boilers for heavier industrial settings, which use electricity directly to flash water into steam.

Heat pumps, by contrast, extract and transfer heat from one location to another in the same way that refrigerators or air conditioners do with cold — in essence, they’re air conditioners running in reverse. Because they use energy to move existing heat, heat pumps are far more energy-efficient than fossil-fired or electric-resistance boilers, which use energy to make heat directly.

Heat-pump efficiency does decline as the differential between their hot and cold sides increases, Stark conceded. Typical residential heat-pump systems deliver about 300 to 400 percent as much energy in the form of heat as the energy they use to transfer it. AtmosZero’s heat-pump boilers can practically deliver about 200 percent of the same energy input as heat, he said. But that’s still about two and a half times more efficient than the energy conversion efficiency of burning fossil gas or using electric resistance systems to boil water, he noted.

High-temperature heat pumps also require specialized design and engineering, he said. Stark and AtmosZero’s co-founders, climate tech entrepreneur Ashwin Salvi and Todd Bandhauer, an engineering professor at Colorado State University in Fort Collins and director of the university’s Reach CoLab testing facility, focused their early efforts on innovations such as ​“heat recuperation strategies, optimized heat exchanger selection and sizing, and high-efficiency, high-temperature compressors,” as noted in the company’s ARPA-E project description.

Putting these heat-pump technologies into what Stark described as a ​“mass-manufactured system for mass-market replacement” is key to gaining broader acceptance in industries unfamiliar with them, he said. The relatively few applications of heat pumps for industrial process heat to date have been ​“largely project-to-project driven. I don’t want to call them experiments, but they’re bespoke designs for projects in the European market.”

But ​“when everything’s bespoke, systems are less resilient,” he said. ​“Nothing’s been subjected to hours and hours of testing.” Customers looking for fossil-fuel-free boiler options want mass-produced equipment that comes with standard replacement parts and maintenance service, preferably in configurations that can replace existing boiler systems on a like-for-like basis, according to Stark.

AtmosZero’s work with New Belgium Brewing represents one such mass-market application. New Belgium has pledged to be carbon-neutral by 2030, and it won a carbon-neutral certification for its well-known Fat Tire Ale through a combination of lower-emissions processes and supply-chain reconfigurations and the purchase of carbon offsets. Now it’s looking for ways to achieve even deeper emissions cuts, Stark said.

A major carbon-cutting opportunity 

Energy Innovation’s October report found that food and beverage industries represent a key market for industrial heat pumps, given their reliance on relatively lower-temperature process heating compared to high-temperature industries like steelmaking and cement production. Paper and pulp industries and machinery and vehicle manufacturing also use significant quantities of lower-temperature process heat.

An aggressive shift from fossil-fueled heating to heat pumps for these ​“low-temperature” (up to 165 degrees Celsius) industrial process heating needs could make a significant dent in industrial carbon emissions, the report states.

In the U.S., these low-temperature processes emitted roughly 344 million metric tons of carbon dioxide in 2021, equivalent to about 74 million gasoline-powered cars, 43 million homes, or 864 fossil-gas-fired power plants. Using heat pumps for these heating needs could reduce those emissions by 77 million metric tons in 2030 compared to a business-as-usual case. That shift could also increase gross domestic product by more than $42 billion and create 275,000 more jobs in manufacturing, construction, business services and other sectors in 2030.

Heat pumps do cost more than fossil-fueled boilers today, driving up the total cost of ownership based on 2021 gas and electricity prices, the report notes. But the long-term trends are strongly in electricity’s favor, according to Jeffrey Rissman, Energy Innovation’s industry program director and author of the October report. While gas prices are volatile and unlikely to fall significantly in the decades ahead, electricity prices ​“are on a long-term downward trend driven by the deployment of low-cost wind and solar generation.”

In a January interview, Rissman also highlighted how billions of dollars of federal incentives in the Inflation Reduction Act could boost the cost-effective deployment of heat pumps for process heating. Those include tax credits for manufacturing and installing heat pumps and grants for ​“advanced industrial technology” that together add up to nearly $16 billion.

“Heat pumps aren’t the only qualifying technology, of course,” he said. ​“But they could certainly get a piece of that pie.”