Process heat and steam

For insight into the energy efficiency of your process heating and steam systems, see the Industrial energy tools. Based on answers to a series of questions, a report will detail opportunities and key actions you can take to save energy.


Process heating and steam production consume large amounts of energy in industrial and commercial sub-sectors. There are substantial opportunities to improve energy efficiency, especially in older facilities.

While process heating has previously relied on the combustion of fossil fuels, there are now many viable renewable alternatives.

Quick wins

Metering and monitoring

Installing a detailed metering and monitoring system, including gas flow meters, will help to:

  • quantify process heating efficiency improvements
  • inform a waste heat recovery plan
  • track energy performance from upgrades
  • maintain operational tuning of equipment.

To read more, see the Metering and monitoring guide.

Adjusting system settings and controls

Quick fixes for efficiency can be achieved by optimising settings and controls, such as:

  • temperature and pressure set points
  • air-fuel ratios
  • equipment sequencing.

Staging the operation of heating equipment so separate units are kept at optimal efficiency as loads change can bring large energy savings. Running equipment under optimal conditions also helps extend the life of key components.

For more complex manufacturing systems, optimising settings and controls are best supported by detailed analysis of consumption, output and product quality data.


Insulating areas of high heat loss can deliver substantial savings and a return on investment within 3 years. Insulation options include ceramic and fibre-based products for a range of applications and temperature extremes.

Common areas of heat loss that may benefit from insulation retrofits include:

  • steam, hot water and condensate piping
  • flues and chimneys
  • thermal bridges in equipment and mounting structures

Reducing lengths in the distribution system can sometimes provide a more cost-effective alternative to insulation.


Process heating and steam systems can decline in energy efficiency and productivity over time. Establish a regular maintenance schedule to keep systems working at their best.

Common maintenance issues requiring attention in process heating systems include:

  • leaks in seals and at component junctions
  • blocked burner jets
  • faulty steam traps
  • dirty exhausts and ductwork
  • sticky valves and actuators
  • worn fans and pumps.

Upgrade & optimise

Ovens, kilns and furnaces

Older ovens, kilns and furnaces can be inefficient. They can usually be upgraded or retrofitted cost-effectively. Due to their energy intensity, even savings of a few percent can pay back within a few years. Poor insulation is responsible for most heat loss in older equipment and can be partly addressed through a retrofit.

More efficient burners can also save energy and enable better control of production, especially when combined with electronic controls. Where heat demands are variable, allow for very low turn down and responsive ramp up, as well as precise control of temperatures.

When purchasing new equipment, invest in the most efficient models available.

For insight into the operational and energy efficiency of your furnace, see the Furnace energy tool. The tool was developed for cupola, electric arc, gas-fired and induction furnaces.


Boilers often represent a large proportion of heat loss in manufacturing facilities. Opportunities to save energy in older boilers include:

  • fitting an economiser to the boiler flue to preheat incoming water
  • recovering flash steam high-grade heat from blow down traps
  • compressing lower grade steam vapour to raise heat levels or use for low-grade heat applications such as space heating.

Modern condensing boilers make use of flue waste heat and can give a faster return on investment compared with adding economisers. Replacing a single large boiler with smaller modular boilers can provide more flexibility and efficiency. Adding a dedicated waste heat boiler may also be worthwhile, especially when expecting a future increase in hot water or steam production.

When upgrading or replacing a boiler system, it is worth considering if alternative technologies, such as heat pumps may be a viable alternative.

For insight into the operational and energy efficiency of your boiler, see the Boiler energy tool.


Dryers are an essential part of many manufacturing processes including in the food, chemical, and paper industries. Hot air and hot gas drying are the most common drying techniques.

Some options to improve efficiency in the drying process are:

  • pre-treatment and drying
  • low temperature evaporation
  • waste heat recovery and heat exchangers
  • purpose-built efficient heat pump dryers and dehumidifiers
  • solar, infrared, and microwave-assisted drying.

For insight into the operational and energy efficiency of your dryers, see the Dryer energy tool.


Blanching is used in food manufacturing to help preserve product quality and keep it free from dirt and micro-organisms. Some tuning of existing blanchers may be possible, such as accurate temperature control and exposure durations.

Upgrading to efficient new equipment and alternative approaches can substantially reduce energy costs, increase product yield, quality and reduce wastewater.

Upgrade options include:           

  • highly insulated equipment enclosures including seals to reduce evaporation
  • steam blanchers and steam injection to heat ‘make up’ water entering the system
  • integration of heat recovery technology and multiple smaller units or compartments
  • automated, flexible and precise system control              
  • microwave alternatives.

Heat pumps

Heat pump systems can efficiently generate heat from ambient conditions, or upgrade recovered waste heat. The main benefit is they produce more heat output than they consume in input energy.

The latest high temperature electric heat pump systems can produce boiling water and steam. Heat pump cycles may also be driven by thermal energy, using absorption to generate cooling from heat.

Heat pump water heaters can significantly reduce energy consumption, but the benefits are contingent upon good design and implementation. 

The Australian Alliance for Energy Productivity (A2EP) has released its Heat Pump Estimator tool designed to help plan industrial and commercial heat pump projects.

The tool provides an estimate of your heating and cooling needs and how a heat pump might address them. Enter some basic figures to receive a size and cost estimate of the heat pump you need, which can then be provided to product suppliers for the purpose of a quote.

See other A2EP heat pump resources:

Low grade heat recovery

Waste heat can be used directly for pre-heating, refrigeration processes, or converted to electricity.  As much as 80% of heat lost in manufacturing processes can now be cost-effectively recovered.

Where lower grade heat is surplus to pre-heating needs, it can be directed to other site areas or exported to nearby facilities. Low grade heat can also be upgraded to higher temperatures through compression or by the use of heat pumps.

To read more, see the Waste heat recovery guide.

Combined heat and power (CHP)

CHP (also known as cogeneration and trigeneration) generates electricity and heat simultaneously onsite using a combustion engine. CHP is most cost-effective when all the heat energy generated in the combustion process can be used on site, so avoiding oversizing capacity is important.

When considering CHP, careful consideration should be given to possible fluctuations in gas price on overall project economics. While traditionally fed by gas from the public network, CHP from biogas/biomass captured on site may be an alternative.

To read more, see the Waste heat recovery guide.

Renewable energy

In 2019, the Australian Renewable Energy Agency (ARENA) commissioned the Renewable Energy Options for Industrial Process Heat report (PDF 5.40 MB) which outlines opportunities for industrial users to switch to renewable energy alternatives to provide process heat.

The report shows shifting to renewable energy to generate process heat is possible for industrial sites over short to long term.

Where renewable energy can be generated or captured on site, large energy and emission reductions are possible. For sites without access to renewable energy, establishing power purchase agreements may also present a cost-effective option.

To read more, see the Renewable energy guide.

Solar thermal

Solar thermal technologies can meet a large portion heat demand in industrial and agricultural food processes for hot water, steam production and product drying.

Solar water heating can easily generate temperatures above 80°C, high enough for a wide range of applications. Where solar thermal falls short of the required end-use temperature it can be used for pre-heating purposes.


Facility electrification

In recent years there has been substantial improvement in the business case for efficient electrical heating technologies such as high-temperature heat pumps, electric and microwave ovens. The case for greater facility electrification is further improved by the availability of variable speed drives (VSDs), efficient motors, and sophisticated controls.

A movement towards facility electrification offers a number of advantages:

  • less reliance on fossil fuels
  • better control and integration of processes and equipment
  • more flexible demand management and electricity tariff selection
  • more reliable and productive operation
  • opportunity for onsite solar PV
  • greater potential for using Industry 4.0 methods

While full-scale electrification can be costly, payback is often achievable within 5 to 7 years.

Heat to power

High grade heat is used to generate electricity by spinning turbines, such as in a steam engine. However, even low grades of waste heat can be used to cost-effectively generate power.

One of the solutions to generate electricity from low temperature heat otherwise dispersed into the environment is the organic rankine cycle (ORC). This uses special heat transfer fluids capable of boiling at low temperatures. With ORC plants available in a wide range of sizes, there are already numerous installations in cement, glass and metal sectors worldwide.

While generating electricity from waste heat is usually less efficient than direct re-use of the thermal energy, electricity is more flexible..

Product redesign

Reducing requirements for process heat and steam services can be achieved through product redesign. Advances in chemistry, materials science and engineering are increasing options for eliminating some heating processes or for carrying them out at lower temperatures.

Technical innovations include the use and production of enzyme-based detergents, micro-filtration, centrifuging, and new catalysts. Using non-metal materials such as plastics and composites in manufacturing processes is also reducing the need for high temperature production processes.

Next steps you can take

  1. Assess the efficiency of your process heating and steam systems with the Industrial energy tools.
  2. Read about how to conduct an energy audit.
  3. Research energy efficiency training options:
  4. See the Energy Efficiency Council website to find an expert or equipment provider.
  5. Explore financing options for your projects:

Case studies

Displacement of Gas by Thermal Energy Storage Lessons Learnt (ARENA) Australian Government

LM Hayter and Sons: at the cutting edge of saving energy (PDF 340 KB) NSW Government

Climate Change Research Strategy - Energy Efficiency Solutions (PDF 489 KB) NSW Government

Significant energy savings for Queensland meat processors (PDF 329 KB) Queensland Farmers’ Federation

Reliable energy from solar CSIRO

Zero Carbon Industry Plan - Electrifying Industry (PDF 3.50 MB) Beyond Zero Emissions

Heat load control on multiple boilers UK CIBSE

Read more

Renewable energy options for industrial process heat (PDF 5.40 MB) (ARENA) Australian Government

Australian Manufacturing Gas Efficiency Guide (PDF 2.51 MB) (CEFC) Australian Government

Reduce boiler, steam and process heating costs in your business Victorian Government

Hot water systems for businesses Victorian Government

Heat Pump Estimator A2EP

Process heat systems Energy Efficiency and Conservation Authority

Solar Heat for Industrial Processes - Technology Brief (PDF 5.64 MB) IRENA

Renewable energy options for Australian industrial gas users (PDF 9.10 MB) Institute for Sustainable Futures

Best practices for modular boilers operations and maintenance PNNL