Techno-economic analysis of technologies for decarbonizing low- and medium-temperature industrial heat

Decarbonizing industrial heat is critical for achieving climate targets. This study evaluates the economic viability of technologies for decarbonizing industrial heat in Europe through a techno-economic analysis. High-temperature heat pumps (HTHPs) and electric, hydrogen, and biomass boilers are compared in terms of levelized cost of heat (LCOH) under various scenarios, including the impact of thermal storage leveraging dynamic electricity prices. In scenarios for the year 2030, we show that HTHPs leveraging free excess heat achieve LCOH values at least 30% to 60% lower than hydrogen boilers and up to 37% lower than biomass boilers. Integrating daily thermal storage reduces LCOH by up to 15% for heat pumps and 27% for electric boilers. By 2050, anticipated cost and efficiency improvements further enhance the competitiveness of heat pumps. These results highlight the economic advantage of HTHPs, particularly when integrating excess heat and thermal storage.