Waste heat recovery


Waste heat minimisation and recovery is a significant opportunity to improve efficiency and reduce energy bills. It can also mean lower maintenance costs and improved equipment productivity as energy-using equipment can be operated less intensely.

There are often numerous opportunities in older buildings and plants to implement heat recovery strategies. The thermal energy from waste heat can be re-used directly for:

  • pre-heating
  • refrigeration processes
  • upgrading to a higher grade of heat
  • conversion to electricity.

As much as 80% of energy lost as heat in manufacturing processes can be cost effectively recovered. This means waste heat recovery is increasingly recognised as a key opportunity for businesses to improve their bottom line while reducing carbon emissions.

Quick wins

Metering and monitoring

Installing a detailed metering and monitoring system can help quantify easy opportunities for waste heat recovery and reuse. It also informs maintenance and operational tuning of existing waste heat recovery technologies.

To read more see the Metering and monitoring guide.

Assess waste heat generation and potential uses

Identifying sources of waste heat in a facility can indicate energy savings potential and help establish a business case for action. A waste heat assessment can also reveal opportunities to avoid creating waste heat in the first place.

It is important to evaluate variations in waste heat characteristics such as temperature, flow rates, and presence of contaminants. Common areas of heat loss include:

  • flue/exhaust gas structures
  • poor seals resulting in air infiltration
  • wall conduction and radiation
  • system pipes and storage 
  • motors and engines
  • wastewater and other effluents

The most cost-effective use of waste heat is often to improve the energy efficiency of the heating process. This can be done by pre-heating combustion air or hot water feeds. After nearby preheating needs are met, opportunities for transferring waste heat energy to other areas of the plant can be explored.

Making the best use of waste heat can be complex so it often pays to consult a relevant expert.

Reduce unnecessary heat generation and loss

Before investing heavily in heat recovery equipment, you should first take action to reduce unnecessary heat generation and losses. There may be several options to reduce waste heat in a facility including:

  • insulating areas of high heat loss such as pipes and exhaust stacks
  • equipment tune-ups such as optimising air fuel ratios
  • implementing automated controls

Older facilities typically have more heat loss issues. Large energy savings are often achievable by addressing these issues before heat recovery is implemented.

Maintain heat exchangers

Thorough maintenance of existing heat exchange systems can deliver quick wins by ensuring the equipment is performing to its potential. Substantial reductions in performance can occur gradually over time. Areas to pay attention to include:

  • cleaning heat exchange surfaces
  • cleaning dirt and obstructions from ductwork
  • ensuring proper operation of damper actuators and seals
  • unblocking valves and drains
  • adjusting control settings for optimal performance

Upgrade and optimise

Heat exchangers

Heat exchangers have become more efficient over time so you should consider replacing older ageing units. While some manufacturers claim up to 95% peak efficiency, the average range of efficiencies of heat recovery systems vary from between 50% to 80%.

A common upgrade is to replace large shell-and-tube heat exchangers for smaller compact plate heat exchangers. Plate heat exchangers are several times more efficient, lighter and use less floor space than shell-and-tube exchangers.


Boilers often represent a large proportion of heat loss in manufacturing facilities.

For older boilers, it is often possible to fit an economiser to the boiler flue which can be used to preheat incoming water. In some cases, it may be more economical to buy a more efficient boiler. Modern condensing boilers already make use of flue waste heat and can give a faster return on investment compared with adding economisers.

High grade heat from flash steam can be recovered from blow down traps. Lower grade steam vapour can be potentially compressed to raise heat levels or used for low grade heat applications such as space heating.

Adding a dedicated waste heat boiler may also be worthwhile, especially where a future increase in hot water or steam production is anticipated.

To read more, see the Process heat and steam guide.


The process of pressurising air for industrial tasks is relatively inefficient with most energy wasted as heat. Aftermarket heat exchangers for compressors are generally easy to retrofit. For many air compressors, waste heat can be captured at the compressor’s oil cooler and transferred for use in water or space heating.

Upgrading to new compressor units may be worth considering if the existing compressors are nearing their useful life, or after all other key areas of air compressor system efficiency have been addressed. Rotary screw compressors with integrated air-cooled or water-cooled cabinet designs are often the preferred replacement type for high efficiency as they provide a high level of heat recovery and operational flexibility.

To read more, see the Compressed air guide.


Refrigeration has a wide range of applications in industry and can be a large source of heat loss, especially in food manufacturing, storage and retail. In a supermarket, for example, waste heat from refrigeration can be enough to supply a large proportion of the site’s hot water demand.

Refrigeration is typically achieved using a vapour compression refrigeration cycle, consisting of a compressor, condenser, expansion valve, and an evaporator. In some refrigeration systems the condenser is already water cooled, making it possible to re-route the cooling water to where heat is needed. Otherwise, it is often possible to install a specialised heat exchanger ahead of the condenser in the circuit.

To read more, see the Refrigeration guide.

Heat transfer fluids

Special heat transfer fluids used in liquid-based heat recovery systems tend to degrade over time. Regular fluid changeovers should be ensured in order to maintain efficiency.

For existing heat exchangers that use mineral or synthetic heat transfer fluids, upgrading to a more optimal fluid and adjusting fluid system settings can achieve efficiency gains. Choosing the best fluid for the job can be complex and a range of factors should be considered, including:

  • chemical composition and compatibility
  • viscosity
  • optimal performance and durability at various operating temperatures.

Where feasible, moving fluid through the system at a higher velocity can also improve heat transfer and result in useful energy savings.

Alternative approaches

Ventilation heat exchange

In businesses with a significant demand for space heating such as office spaces and leisure centres, waste heat recovery in ventilation systems can deliver substantial energy savings. In simple terms, this means channelling exhaust air past incoming fresh air to reduce the amount of energy needed for heating.

While newer facilities often include some form of heat recovery in their HVAC systems, many older facilities do not. Well planned ventilation heat exchange projects can repay upfront investment in around 5 years. 

Ventilation heat exchange can sometimes be challenging to add to existing HVAC systems. Careful project design and costing is advised where complexity or distance is an issue. For example, the cost of ducting over long lengths and potential need to upgrade fans should be considered.

Upgrade waste heat with heat pumps

Waste heat as low as 45°C can be recovered by special heat pumps to produce output temperatures in excess of 100°C. This is suitable for commercial and industrial applications traditionally dependent on gas for heating.

According to the Australian Institute for Refrigeration, Air Conditioning and Heating (AIRAH), the economics of heat pumps in the industrial context have improved due to early-stage economies of scale. The main benefit is they produce more heat output than they consume in input energy.

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.

Heat-driven refrigeration

Waste heat can be used to drive refrigeration processes leading to the production of chilled water and air. The most common approach is to implement an absorption cycle that uses 2 different coolants, where the heat-driven evaporative cooling in one coolant loop is absorbed into the other.

Where waste heat production is excess to local pre-heating needs, heat-driven refrigeration applications can provide another option to make use of available waste heat energy.

Combined heat and power (CHP)

CHP (also known as cogeneration and trigeneration) is a means to generate electricity onsite using a combustion engine, while simultaneously capturing the waste heat for re-use or conversion into cooling. CHP is most cost-effective when all the waste heat energy generated in the combustion process can be used on site. Correct unit sizing is important.

Care should also be taken to consider future possible fluctuations in gas price on overall project economics. While traditionally fed by gas from the public network, it is also possible to power CHP from biogas captured on site, which can result in both lower gas prices and lower lifecycle carbon emissions, as well as improved energy security.

Electricity generation from waste heat

While high grade waste heat can be used to generate electricity by spinning turbines (such as in a steam engine), low grade waste heat can also be used cost-effectively through the organic rankine cycle (ORC). This uses special heat transfer fluids capable of boiling at low temperatures. There are many examples of successful ORC 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 and can be stored for later use.


Materials innovation in heat exchanger design and manufacture

Innovations in materials and material forming processes are enabling more advanced heat exchanger design and cost-effective manufacturing. Advances include:

  • high thermal conductivity polymers
  • heat exchanger design including smaller weight, size and improved corrosion resistance
  • heat transfer surface geometries.

Improved electrical power from heat

Researchers have been working hard to develop more efficient means to generate power from waste heat. The inclusion of special flow expanders (including twin screw designs) in existing ORC systems can improve output across a greater range of operating conditions.

Another innovation is bipolymer systems that bend in a turning motion when exposed to heat to create force. This uses waste heat to generate a vortex of water vapour that can turn a turbine.

Waste heat storage and export

Waste heat re-use has traditionally had limited application due to location and time constraints. Innovations in waste heat storage and export are changing that.

Phase change materials (PCM) allow storage of large amounts of waste heat for long periods of time. Waste heat can be stored overnight for pre-heating equipment at the start of the next day, or used at peak periods to reduce energy costs. Optimal PCM parameters such as melting points can be selected using software modelling.

Thermal energy can also successfully be stored in hot water tanks, salts or metal alloys or converted to electricity for storage in batteries.

There are a growing number of examples globally of companies selling excess waste heat to other companies or government agencies. This is done through thermal transfer to nearby facilities or by electrical export via the grid.

Next steps

  1. Read more about how to conduct an energy audit.
  2. Research energy efficiency training options:
  3. See the Energy Efficiency Council website to find an expert or equipment provider.
  4. Explore financing options for your projects:

Case studies

Buttercup Bakeries: Cleaner production in breadmaking Australian Government

Bulla Dairy Foods: Converting waste heat into energy and steam Environmental Technology Solutions

How reusing waste heat can take aluminium one step closer to becoming a greener industry EEIP

Innovative Technology Captures Energy from Waste Heat Power Mag

Compact heat exchanger solution for dairy ingredient processor

Read more

Australian manufacturing - gas efficiency guide (PDF 2.51 MB) (CEFC) Australian Government

Renewable Energy for Process Heat Opportunity Study (PDF 746 KB) (ARENA) Australian Government

Heat Pump and Heat Recovery Technologies (PDF 652 KB) HVAC HESS

Heat pump water heaters in commercial and industrial applications (PDF 8.16 MB) A2EP

Heat recovery system efficiencies The Renewable Energy Hub

High temperature heat pumps for the Australian food industry: opportunities assessment (PDF 6.06 MB) AIRAH

Heat recovery systems (PDF 4.64 MB) TEES Valley Business

Heat recovery (PDF 4.0 MB) UK Carbon Trust

Waste heat recovery technologies and applications Thermal Science and Engineering Progress