Every tonne of steel, every bag of cement and most of the plastic around you started its life in a furnace. Industry runs on heat, and much of it is far hotter than anything in a kitchen: a cement kiln works at 1,450°C, a steam cracker in a chemical plant at around 850°C. More than 85% of that heat still comes from burning coal, oil or gas. Depending on how you count, industrial heat is responsible for roughly a fifth of global emissions, about as much as the entire transport sector.
Yet almost nobody talks about it. Electric cars have showrooms and heat pumps have subsidy programmes. The furnace behind a paper mill has neither. Heat is invisible.
Together with the cleantech strategy consultancy DWR eco, we have spent the past months working out how that changes and where the investable opportunities sit. The result is our whitepaper Fires to Wires. Here is the short version.
Temperature decides everything
Industrial heat is not one market. Pasteurising milk takes 72°C, melting glass takes 1,600°C, and the temperature determines which technologies work and what the heat ends up costing.
Below about 200°C, the answer already exists. A heat pump (a machine that moves heat rather than generating it, like a fridge running in reverse) turns one unit of electricity into three to six units of heat and beats a gas boiler on running costs. That market is solved and getting crowded.
At the other end, above 1,000°C, steel and cement need multi-billion plants and decade-long sales cycles. That is a job for infrastructure capital, not a seed cheque.
The interesting part lies in between. The band from roughly 250 to 800°C covers about a third of global industrial heat demand, from refineries and chemical plants to ceramics, food processing and paper. In the EU alone that is around 732 TWh a year, roughly what all of German industry consumes. The technology to electrify it has existed for decades. Hardly anyone is building the companies to deploy it.
Same brick, different bill
So why hasn’t it happened? Above 250°C, heat pumps stop making economic sense, and every alternative converts electricity into heat at roughly one to one. A resistance heater (essentially a very large toaster element) running on the average European industrial power price of around £100/MWh delivers heat at more than twice the cost of gas.
That changes once you add storage and buy power at the right time. Our whitepaper runs the numbers on a resistance heater charging a stack of refractory bricks that hold heat at several hundred degrees. Spread over its lifetime, the hardware adds only about £10 to each megawatt-hour of heat. Everything else is electricity. On a flat tariff, the heat costs £123 per MWh. Charge the bricks only in windy and sunny hours, when power drops to around £40, and the same system delivers heat at £55, below the roughly £59 that gas heat costs once carbon prices are included. In hours when wind and solar are being curtailed (switched off because the grid can’t absorb the power), the cost falls to £44.
Same bricks, same heater. The only thing that changes is when the electricity is bought. The hardware doesn’t decide whether a project wins. The dispatch does.
Don’t back the brick
That logic tells us where the value will end up. So far, most venture money has gone to the makers of hardware: hot bricks, carbon blocks, molten salt tanks. Thermal storage startups raised around $500 million across 2024 and 2025. The hardware matters, but once several companies can sell you a hot brick, the brick stops being a moat. Solar panels went down exactly that road.
The layer that is still almost empty in Europe sits between the equipment and the plant operator. We call these companies solvers. They fit a heat block into a forty-year-old plant without stopping production, finance it, buy power in the cheap hours, verify the carbon savings and sell the result as a contract: delivered heat at a guaranteed price, known as Heat-as-a-Service. A paper mill wants steam at six in the morning and has no interest in trading electricity. The solver takes that problem off its hands.
We have watched this pattern play out in our own portfolio. With grid-scale batteries, the value went to whoever ran the trading software rather than whoever made the cells, which is why our investment in Terra One was never really a hardware bet. Ample applies the same thinking to heat pumps and batteries in homes, financing them on the strength of their operating data. Industrial heat needs that machinery one order of magnitude bigger.
Our thesis in one line: don’t back the brick, back whatever makes the brick bankable.
Why now, and why Europe
No region has more reason to move. In the first 52 days of the Strait of Hormuz disruption, the EU paid an extra €24 billion for fossil fuel imports and received no additional energy in return. At the same time, record amounts of renewable power are being thrown away. Electrified heat with storage turns that surplus into a resource.
Policy is starting to follow. The EU’s Electrification Action Plan aims to bring the industrial electricity-to-gas price ratio down to two or below by 2030, and a second Heat Auction with a €1 billion budget opens in December. DWR eco’s chapter on EU policy works through the files that will decide whether this potential turns into deployment, from grid access to network charges.
We won’t pretend this is SaaS. Timelines run five to ten years, projects need real capital, and exits will look like acquisitions by utilities, engineering firms and equipment makers rather than IPOs. But pressure from carbon pricing builds through the early 2030s, and incumbents who wait until then will buy capability rather than build it. The companies proving the model today will be the obvious candidates.
Read the full paper
The whitepaper covers the full temperature map, an assessment of each technology, the economics of Heat-as-a-Service and an outlook to 2040, including the risks that could break our own thesis.