No Time or Energy to Waste: Powering Industry

In a typical European factory, a gas boiler somewhere in the basement makes high-pressure steam, because with cheap gas nobody worried about temperature. The steam runs through the whole site and is stepped down for each process, for cleaning and even for space heating. Heat pumps need the reverse, a low base temperature lifted for each use, and that integration is not solved and will not be for a while, said a participant from a network of industrial heat users. It helps explain why the first movers keep their gas boilers and add electric ones beside them.

Benjamin Wochner of Kopa Ventures and Birgit Handl of Aurum Impact framed the urgency as competitiveness more than climate. Europe's industry pays far more for energy than its rivals because it still imports so much fossil fuel. But the hosts wanted solutions that work with the grid as it is. Any bet on infrastructure that does not yet exist, whether grids or pipelines, will come too late for a venture fund's timeline. Flexibility, from batteries to heat storage, is investable today, one of the hosts said.

Steam first

Industrial heat is not one market, Benjamin said, "it's like a hundred markets", split by temperature, available energy and processes from drying to melting. The heat-user network participant disagreed. A pharma company can learn a lot from a food company, because both use steam at 100–250°C, and the band up to about 300°C is where solutions are mature or nearly so and mainly need scaling.

That heat comes mostly from natural gas, which leaves companies exposed to price shocks. Electricity supplies around a third of industrial energy in Europe, the participant said, mostly for machinery and fans. So the first movers run hybrids, electric boilers or thermal storage alongside their gas boilers. They use power when it is cheap and hedge against spikes such as the 600 euros per megawatt-hour seen in Germany, while still using the assets they have.

If we don't need it, we shouldn't do it.

A market bigger than the grid

One participant challenged the idea that electrification is the future at all. Industrial heat accounts for about 25% of all the energy used, they said, more than the whole electricity sector at about 20%. Electrifying it is possible but a huge strain on capex and above all on the grid. Sweden electrified its heating in the 1970s because that was the future, then found that on a cold day high prices put the whole society on the brink. Electricity, the purest form of energy, should go where it is really needed, such as very high temperatures. Some 40% of industrial heat is below 200°C, where biofuels, heat pumps or solar heat can do the job. "If we don't need it, we shouldn't do it."

The heat-user network participant was unconvinced. Solar thermal needs space that most industrial sites do not have, and geothermal needs ground conditions most sites lack, so they end up with electricity, used efficiently through heat pumps and storage. A participant from a family-owned industrial company had skipped the debate. To meet its own carbon targets it simply installs heat pumps and sometimes on-site solar, because that is what is available now.

The price of switching

The economics are the brake. A corporate investor from the heat-pump industry said a heat pump is about three times as efficient as a gas boiler, but in most European countries outside the Nordic region electricity costs about three times as much as gas, so uptake stays slow. New heat hardware pays back in about ten years, while factories expect three or four. They wait to see results elsewhere, so start-ups struggle to find sites to prove their technology. The investor wanted governments to break that circle with subsidies or public field tests.

Storage has the same problem. A corporate investor from the power sector said storing heat, cold or compressed air already works technically, but nobody has found a technology with capex low enough to be profitable. A thermal-storage founder said many industrial sites lack the grid connection to use storage at all. A long-duration storage founder described companies that generate more power than they use, sell the surplus to the grid for very little and buy it back at ten times the price.

For heavy industry, timing matters as much as the technology, an investor said. Electric furnaces for glass or concrete replace the core process, so they have to arrive when a sector renews its plants, and recent changes to the EU's emissions trading rules now help electrification.

The most concrete plan came from a founder developing carbon capture. A ceramics company that cannot go fully electric will first install the founder's system to recover heat for a new residential district, paid for by the municipality, and add the capture a year or two later. Many industries will keep burning fuels for decades, the founder said, because they lack a grid connection or still have process emissions left over. Capturing the carbon and the heat together is what makes the business case.

This Ripple was hosted by Benjamin Wochner (Kopa Ventures) and Birgit Handl (Aurum Impact) at The Drop 2026 on 16 September.