# Heat exchangers and pinch integration: Economics and contracts

Factory savings that pay back in weeks, not years

Source page: https://www.materialinsights.org/energy/e_heat_exchangers/rc-econ/

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.

Liquid-to-liquid heat recovery is often the cheapest energy saving in a factory, with paybacks measured in weeks or months. It is rarely financed by third parties because projects are small and buried in plant piping.

#### Levelised cost of heat or avoided cost
Favourable

Cadmus reviewed 12 utility-supported US heat recovery projects. Over project life the average cost was USD 0.05 per therm saved, about USD 1.70 per MWh (calculated), against a gas price of USD 5.66 per MMBtu, about USD 19 per MWh (calculated). A plate-and-frame exchanger at a paper mill cost USD 0.41 per tonne of CO2 and paid back in under a month; a food plant plate exchanger on steam paid back in about 8 months; an exhaust-air exchanger at a paper mill in about 10 months. The average payback across all 12 was 1.31 years.^[4](https://www.aceee.org/sites/default/files/pdfs/ssi21/panel-3/Zahlan.pdf)^[2](https://www1.eere.energy.gov/manufacturing/intensiveprocesses/pdfs/waste_heat_recovery.pdf)
 Average lifetime cost of heat saved USD 0.05 per therm (about USD 1.70/MWh, calculated)^[4](https://www.aceee.org/sites/default/files/pdfs/ssi21/panel-3/Zahlan.pdf) Average payback, 12 projects 1.31 years^[4](https://www.aceee.org/sites/default/files/pdfs/ssi21/panel-3/Zahlan.pdf) Plate-and-frame, paper mill USD 0.41 per t CO2; payback 0.06 years^[4](https://www.aceee.org/sites/default/files/pdfs/ssi21/panel-3/Zahlan.pdf) Payback industry expects well under 3 years^[2](https://www1.eere.energy.gov/manufacturing/intensiveprocesses/pdfs/waste_heat_recovery.pdf)

#### Host factory credit risk
Mixed

The exchanger is tied to particular process streams. Capital is small, so stranding losses are small, but a product change can make a heat match disappear. Pinch-integrated plants are more exposed, since a single closed unit can unbalance the heat network.^[4](https://www.aceee.org/sites/default/files/pdfs/ssi21/panel-3/Zahlan.pdf)
 Payback, hot-water and plate exchanger projects 0.04 to 0.68 years in sample^[4](https://www.aceee.org/sites/default/files/pdfs/ssi21/panel-3/Zahlan.pdf)

#### Heat-as-a-service and ESCO models
Mixed

Most projects are paid for by the host or by utility efficiency programmes; the Cadmus sample averaged one third of the programme's cost benchmark of USD 0.154 per lifetime therm. Third-party ownership appears when exchangers are bundled into larger packages, as in Skyven Technologies' 10-year shared-savings contract with California Dairies, where Skyven installs and maintains the equipment.^[4](https://www.aceee.org/sites/default/files/pdfs/ssi21/panel-3/Zahlan.pdf)^[7](https://betterbuildingssolutioncenter.energy.gov/implementation-models/skyven-technologies-decarbonizing-industrial-process-heat-public-private)
 Utility programme cost benchmark USD 0.154 per lifetime therm^[4](https://www.aceee.org/sites/default/files/pdfs/ssi21/panel-3/Zahlan.pdf) Skyven and California Dairies term 10 years, shared savings^[7](https://betterbuildingssolutioncenter.energy.gov/implementation-models/skyven-technologies-decarbonizing-industrial-process-heat-public-private)

#### Sources

1. [Waste Heat Recovery: Technology and Opportunities in U.S. Industry (BCS Inc. for US DOE Industrial Technologies Program)](https://www1.eere.energy.gov/manufacturing/intensiveprocesses/pdfs/waste_heat_recovery.pdf) US Department of Energy, 2008
2. [Not Just Hot Air: Low-Cost Decarbonization through Heat Recovery (Zahlan and Talan, Cadmus), ACEEE Summer Study on Energy Efficiency in Industry](https://www.aceee.org/sites/default/files/pdfs/ssi21/panel-3/Zahlan.pdf) ACEEE, 2021
3. [Skyven Technologies: Decarbonizing Industrial Process Heat through Public-Private Partnerships (implementation model)](https://betterbuildingssolutioncenter.energy.gov/implementation-models/skyven-technologies-decarbonizing-industrial-process-heat-public-private) US DOE Better Buildings Solution Center, 2024

## Other sections

- [Summary](https://www.materialinsights.org/energy/e_heat_exchangers/index.md)
- [Overview](https://www.materialinsights.org/energy/e_heat_exchangers/overview/index.md)
- [Correlation](https://www.materialinsights.org/energy/e_heat_exchangers/correlation/index.md)
- [Science and thermodynamics](https://www.materialinsights.org/energy/e_heat_exchangers/rc-sci/index.md)
- [Engineering and integration](https://www.materialinsights.org/energy/e_heat_exchangers/rc-eng/index.md)
- [Impact and additionality](https://www.materialinsights.org/energy/e_heat_exchangers/rc-impact/index.md)
- [What to track](https://www.materialinsights.org/energy/e_heat_exchangers/tracking/index.md)
- [Relationships](https://www.materialinsights.org/energy/e_heat_exchangers/links/index.md)