How Heat as a Service can accelerate the heat transition

Obtaining climate-neutral heat at stable prices without making any investments or taking any risks – sounds too good to be true? But that’s exactly what Heat as a Service solutions can do!

“Just as power purchase agreements have transformed the ability of businesses to source electricity from renewables, Heat as a Service enables businesses to access renewable heat solutions without having to make the initial investment”, summarizes Mariana Heinrich, Director Energy, World Business Council for Sustainable Development (WBCSD).

While 52% of electricity in Germany was already generated from renewable sources in 2023, according to the Federal Environment Agency, no more than 19% of Germany’s heat supply came from renewable energies. The situation is even worse for process heat, which is required for industrial production and accounts for around two thirds of energy consumption in German industry. Just six percent of the energy required for process heat is currently covered by renewable energies.

Why are green heat solutions still lagging behind?

The slow implementation of the heat transition is not least due to the fact that renewable heating solutions for companies or municipalities usually mean high investments, high operating costs and high risk. For example, investments have to be made in expensive and highly complex technology as well as in maintenance and servicing. In addition, staff have to be hired and trained for operation. And last but not least, the few options for green heat that are already available to companies are far from easy to implement for every industry. For example, very high temperatures are required for process heat in industry or food production, where many renewable heating technologies fail.

This is where climate-neutral Heat as a Service (HaaS) solutions come into play. The World Business Council for Sustainable Development published a detailed practical guide that explains the principle of HaaS and highlights the extensive benefits that such models offer companies. It describes HaaS as an “innovative business model and financing mechanism that companies can use to integrate green heat solutions into their operations without having to make the upfront investment”.

How exactly does Heat as a Service work?

It involves two parties entering into a HaaS partnership: A company or municipal utility that wants to decarbonize its heat supply or heating network and an energy service provider such as Novocarbo, which produces and provides climate-neutral heat. In Novocarbo’s HaaS model, this means that we take care of the design of a suitable heat solution, cover the investment costs, the construction and operation of the systems and feed the heat into the existing heat network.

Probably the biggest obstacle for companies when switching to green heat – the high investments that have to be made – is eliminated in the course of a HaaS partnership. And it also offers another advantage, which is particularly important in view of the highly fluctuating energy prices: the heat can be offered at stable prices under long-term contracts.

Sounds good in theory, but what does HaaS actually look like in practice?

Novocarbo specializes in carbon removal technologies and offers companies and municipalities a climate-neutral HaaS solution based on pyrolysis technology. This enables companies to use this complex method of heat generation without having to build up new expertise.

Green heat through pyrolysis is particularly climate-friendly: in the pyrolysis process, biomass is carbonized, producing biochar and regenerative surplus energy. The carbon present in the biomass is bound and stored in the biochar. This allows CO₂ to be removed from the atmosphere in addition to heat production. This also explains why the surplus heat we generate is climate-neutral: as Novocarbo actively captures and stores carbon from the atmosphere, this is then netted against the emissions generated in the process, which is why the overall balance of our production facilities is CO2-negative.

Novocarbo specializes in the distribution of biochar, which means that we ensure that the captured carbon is added to a permanent sink, such as agricultural soil or concrete. We also take care of the biomass supply: we only use plant residues from regional sources. If biogenic residues are available in the company on site, these can also be used under certain conditions. We work closely with leading mechanical engineering companies and therefore have direct access to state-of-the-art pyrolysis plants. This enables us to provide rapid implementation – usually within 12 months. “Our sites combine circular economy with green heat production and can be built decentrally at almost any location worldwide,” explains Caspar von Ziegner, CEO of Novocarbo.

Heat generation at the Carbon Removal Park Baltic Sea

Find out more about two field-proven HaaS partnerships from Novocarbo:

Eco-friendly heating to decarbonize an industrial giant

Thanks to the collaboration with Novocarbo, a pyrolysis plant has been in operation at the site of Thyssenkrupp rothe erde in Lippstadt since fall 2022, enabling the company to switch almost half of its site heating requirements from fossil fuels to renewable heat generation. The climate-neutral heat is used as hot water for the heating circuit and thus heats offices and production halls as well as the shower water in the employees’ social rooms. Thyssenkrupp rothe erde is using the pyrolysis plant as part of its climate targets to reduce CO₂ emissions from Scope 1, i.e. emissions directly caused by production. “We are delighted that this brings us a step closer to our goal of climate neutrality,” emphasizes Natallia Schönnagel, Head of Technical Coordination & Operational Excellence at thyssenkrupp rothe erde Germany.

Municipal utility cooperation for a greener district heating network

Since autumn 2023, the Carbon Removal Park Baltic Sea has been operating in Grevesmühlen in Northwest Mecklenburg, removing around 3200 tons of CO2 from the atmosphere each year, producing 1,700 tons of biochar and generating 6600 MWh of climate-neutral heat. The plant was developed in collaboration with the Grevesmühlen municipal utility company (Stadtwerke Grevesmühlen), which feeds the green surplus heat into the town’s district heating network. This makes the supply of around 1,800 connected households greener and increases the share of renewable energy from 60% to 75%. “By using Novocarbo’s climate-neutral surplus heat, we can save on natural gas as an energy source and make district heating greener for the region. We see great potential here, especially for small and medium-sized municipal utilities, because Novocarbo’s decarbonization technology is easy to adapt and scale. The energy supplier only installs the heat transport pipeline and saves on additional investment costs, which enables short-term implementation,” says Jens Wilms, Project Development at Stadtwerke Grevesmühlen.

Who should consider a HaaS partnership?

“Our Carbon Removal Parks, which have already successfully been tested in practice, show that green heat solutions as HaaS partnerships do work for companies and municipalities. We now need businesses that have a pioneering spirit, are open to innovative technologies and want to actively promote climate neutrality,” summarizes Novocarbo CEO Caspar von Ziegner.

In general, any municipal utility or company with continuous heat consumption should consider a HaaS partnership as part of its decarbonization strategy. Novocarbo’s climate-neutral HaaS solution can be provided in the form of warm water, hot water or process steam depending on demand and can therefore also cover the high temperatures required for industrial production. The condition is a suitable plot of land of at least 4,000 m² in the immediate surroundings for the pyrolysis plants, which Novocarbo is helping to find.

The fact that more and more companies with a pioneering spirit are integrating HaaS models is demonstrated by the latest cooperation with the municipal utilities of Bochum (Stadtwerke Bochum), which will be sourcing climate-neutral heat from Novocarbo’s new Carbon Removal Park Bochum (Germany) all year round as of 2025, thereby making the district heating network of the metropolitan region with 26,000 connected households greener. This makes them the first municipal utility in a major German city to source climate-neutral heat from biochar production for its district heating network using the HaaS model – an important step for the heating transition in Germany that will hopefully be followed by many other climate pioneers.

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