Investment decisions in industry usually follow conservative rules and long-term horizons. So when a project promises a return on investment in just over twelve months, scepticism is initially a healthy reaction. But this scenario is no longer mere theory in the paper industry with power-to-heat. A current reference project from 2025 proves that the electrification of process heat pays off rapidly under the right conditions. The key here lies not only in the technology, but also in intelligent cross-market optimisation.
The Gas Trap: Why Waiting Is Now the Most Expensive Option
The paper industry is under more pressure than almost any other sector. Energy costs account for a significant proportion of its turnover. For years, natural gas was the seemingly safe haven for the supply of process steam, but this haven has become uncomfortable. Volatile markets and rising CO₂ prices make traditional heat generation an incalculable risk. Many industrial companies are feeling the pressure. Decarbonisation is no longer just a question of image. It is a sheer economic necessity.
Studies repeatedly show the enormous potential of electrification for process heat. Anyone who still relies exclusively on fossil fuel combustion is knowingly manoeuvring themselves into a cost trap. The good news, however, is that the solution is not only green – it also pays off extremely quickly. Relevant analyses, such as Agora Industry’s publication ‘Direct electrification of industrial process heat’, show in detail that direct electrification using power-to-heat can cover 90 per cent of the heat demand that has not yet been electrified.
Highly Flexible Power-To-Heat Systems as Game Changers: More Than Just Boiling Water
Power-to-heat (PtH) is often still misunderstood. People think of a simple kettle in XXL format. Technically, this is not entirely wrong in the case of an electrode boiler, but economically it falls far short. In a modern energy system, a PtH plant is one thing above all else: a flexible battery in the electricity grid.
This is the ideal lever for the paper industry, which requires enormous amounts of steam around the clock. Instead of inflexibly burning gas, we utilise load flexibility for industrial plants. When there is an abundance of electricity in the grid, for example when renewables produce peak loads on a stormy day, prices are at rock bottom or even negative. This is precisely when the electrode boiler steps in. It absorbs the cheap electricity and converts it into process heat. This relieves the grid and reduces costs. This is classic demand response, but on a new level. The BDEW explains very clearly in its dossier (German only) how this technology works as the key to the energy transition and what technical potential it unlocks.
Return on Investment in 1.3 Years: A Reality Check
The figures speak for themselves and demonstrate the enormous potential. In a recent consulting project, we simulated the use of a 75 MW electrode boiler in the paper industry. The framework conditions were anything but trivial, as they took into account complex steam requirements, price forecasts and grid restrictions, as well as regular grid fees without privileges (e.g. according to §19.2).
The results are clear:
- Enormous cost reduction: In the optimised scenario, energy costs fell from €16.83 million for natural gas to €12.83 million per year. This represents a saving of 23.7% compared to conventional generation.
- Lightning-fast return on investment: With specific investment costs of €175/kW, the static payback period is only 1.3 years.
- Special grid fees are not yet included in this figure. Intensive or atypical grid usage and the future reform of industrial grid fees will further improve the case by several months.
Even under complex conditions, the payback periods are between one and two years. The key to this lies in the way the plant operates on the market.
Cross-Market Optimisation: The Secret Behind Returns
An electrode boiler that only runs when the spot market price is low wastes enormous potential. Our analysis showed that pure day-ahead optimisation only delivers part of the savings.
The real return booster is cross-market optimisation. We use our algorithms to sequentially place the plant on different markets:
- Spot markets: Taking advantage of favourable prices in day-ahead and intraday trading for industrial plants.
- Control reserve markets: This is where it gets exciting. By providing aFRR (automatic frequency restoration reserve), additional revenues can be generated that massively leverage the business case. In our scenario, optimised aFRR power trading alone improved the result by a whopping 18 percentage points.
Our software decides in real time whether it is more lucrative to provide balancing energy or to purchase electricity directly on the spot market. This automated load control ensures that you reduce energy costs for your industrial plants without jeopardising production. We intelligently shift capacities between markets and use every price fluctuation to your advantage.
Conclusion: The Courage to Embrace Flexibility Pays Off
The days when energy procurement was purely a cost factor are over. With the right strategy, your process heat can become a revenue driver. The combination of modern power-to-heat technology and our expertise in trading on control reserve markets turns a necessary investment into a profitable asset.
Anyone in the paper industry who still hesitates today is losing money. The technology is mature. The markets are ready. The payback periods are so short that the risk is practically zero. Let’s take a look together at the potential that lies dormant in your plant. Would you like us to analyse your flexibility potential without obligation?
