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Boiler heat recovery: Economics and contracts

Low risk, fast payback, and a working service market

What this tab covers Economics and commercial structures: levelised cost of the recovered energy against the fuel it avoids, host-site risk, and service models such as heat-as-a-service.

Boiler heat recovery is low-risk, fast-payback efficiency, often paying back in under two years, and it is one of the few areas with a working energy-as-a-service market.

Levelised cost of heat or avoided cost

Favourable

In DOE's example, a 14.7 MW (50 MMBtu/h) gas boiler with a 260 C stack recovers about 1.35 MW (4.6 MMBtu/h) with an economiser; over 8,400 hours and gas at USD 8 per MMBtu (about USD 27 per MWh, calculated) that saves USD 386,400 a year of fuel at 80% boiler efficiency; DOE says economisers typically pay back in under two years. Returning an extra 4.5 t/h (10,000 lb/h) of condensate saves about USD 121,760 a year, of which USD 33,760 is water, sewage and treatment chemicals. A Cadmus review of utility-funded projects found hot-water recovery cost about USD 1 per tonne of CO2 with paybacks of a couple of months, and steam-side projects about USD 11 per tonne with paybacks near 1.6 years.1538

Economiser saving, DOE example USD 386,400 a year1 Condensate return saving, extra 4.5 t/h USD 121,760 a year5 Blowdown recovery saving, DOE example USD 68,000 a year3 Lifetime cost, hot-water recovery projects about USD 1 per t CO28

Host factory credit risk

Mixed

Boilers serve many industries, and recovery kit is cheap relative to its savings, so exposure is small. The risk is that the host closes, cuts steam demand, or replaces the boiler with a heat pump or electric boiler, leaving an economiser with nothing to recover. Condensate and blowdown recovery stay useful with any steam source.1

Typical payback limiting exposure under 2 years1

Heat-as-a-service and ESCO models

Favourable

Skyven Technologies runs an energy-as-a-service contract with California Dairies Inc. covering boiler heat recovery (about a 10% boiler efficiency gain), condensing economisers, smart steam traps and solar heat at two plants. Skyven installs and maintains the equipment, savings against previous gas costs are shared over 10 years, and the dairy can extend or take ownership at the end. Finance came from Skyven, Kyotherm, PG&E and SoCalGas incentives and a California Energy Commission grant. In January 2025 Skyven and Kyotherm agreed a USD 70 million co-development and project finance facility, with Skyven keeping majority ownership of projects.910

CDI contract term 10 years, shared savings9 Boiler efficiency gain from recovery about 10%9 Skyven and Kyotherm facility USD 70 million (January 2025)10

Sources

  1. Use Feedwater Economizers for Waste Heat Recovery, Steam Tip Sheet #3 (DOE/GO-102012-3412) US DOE Advanced Manufacturing Office, 2012
  2. Recover Heat from Boiler Blowdown, Steam Tip Sheet #10 (DOE/GO-102012-3408) US DOE Advanced Manufacturing Office, 2012
  3. Return Condensate to the Boiler, Steam Tip Sheet #8 (DOE/GO-102012-3410) US DOE Advanced Manufacturing Office, 2012
  4. Not Just Hot Air: Low-Cost Decarbonization through Heat Recovery (Zahlan and Talan, Cadmus), ACEEE Summer Study on Energy Efficiency in Industry ACEEE, 2021
  5. Skyven Technologies: Decarbonizing Industrial Process Heat through Public-Private Partnerships (implementation model) US DOE Better Buildings Solution Center, 2024
  6. North Texas' Skyven Inks $70M Agreement with France's Kyotherm to Advance Industrial Decarbonization (trade press report of company announcement) Dallas Innovates, 2025