A2EP report charts Australian industrial heat pump adoption

The Australian Alliance for Energy Productivity has published new research charting the adoption of industrial heat pumps as businesses seek alternatives to gas-fired process heating. Its Hot, here, now report estimates that the number of major heat pump installations in existing Australian industrial and commercial buildings has doubled since 2022, with further growth expected as additional projects proceed.

A2EP forecasts that more than 230 major Australian industrial sites and commercial buildings will have switched from gas to large-scale heat pumps by the end of 2027. The projection covers multiple sectors rather than food manufacturing alone. Published on 15 October 2026, the assessment draws on completed installations and ongoing developments, including applications in food and beverage production.

Among its industrial examples is Hardwick Meatworks in Kyneton, Victoria, where a 1MW thermal heat pump has been installed to supply process hot water. The meat processing business, now owned by Kilcoy Global Foods, participated in a demonstration project supported by the Australian Renewable Energy Agency. Unlike many prospective electrification projects, the Hardwick installation has completed commissioning and published operational results.

ARENA’s final project report documents two years of operating experience from May 2023 to May 2025. It records annual energy savings of approximately 29,550GJ, emissions savings of 1,040 tonnes of carbon dioxide equivalent and energy expenditure savings approaching A$480,000. These are reported project outcomes, rather than the original forecasts used to justify the investment.

The installation combines the heat pump with an oil heat recovery system, providing a combined thermal output of approximately 1,088–1,266kW during production operations. The two systems together supplied around 61% of the site’s hot-water requirements. That percentage should not be interpreted as the heat pump independently supplying 61% of demand, since the reported performance includes recovered heat from the associated equipment.

Meat processing requires substantial quantities of heated water for production and hygiene-related duties. Conventional operations commonly rely on gas-fired boilers to provide the necessary thermal energy, with water demand varying according to production schedules and the activities carried out within the factory. A heat pump offers an alternative for suitable temperature duties by recovering heat from a lower-temperature source and raising it to a useful process temperature.

Industrial heat pumps typically employ a refrigeration cycle in which a refrigerant absorbs heat, is compressed to increase its temperature and releases that heat into a separate circuit. The system uses electrical energy to transfer and upgrade heat rather than generating all the required thermal energy through direct combustion. Performance depends on the available heat source, the required delivery temperature and the operating conditions of the equipment.

Hardwick’s installation uses heat associated with its existing refrigeration operation, including connections with the site’s ammonia refrigeration infrastructure. The completed system has been reported operating with hot-water output in the region of 55–70°C, while existing gas heating provides the final temperature increase required for the process water circuit. The arrangement demonstrates partial replacement of conventional heating rather than the complete removal of gas-fired equipment.

The distinction between preliminary design and actual operation is important. The original project proposed supplying water at approximately 75°C to meet much of the demand from an 82°C circuit. Its anticipated natural gas displacement was around 33,000GJ annually, representing more than 75% of the site’s gas consumption at the time. Those figures described the original design expectations, whereas the subsequent report provides evidence of the performance achieved after commissioning and optimisation.

The operational results reflect the wider engineering requirements of integrating a large heat pump into an existing factory. Hardwick needed a substantial electricity supply upgrade, connecting to the local distribution network at high voltage. The project increased the site’s electrical supply capacity and enabled the heat pump to operate alongside the existing 2.5MW solar photovoltaic installation and battery storage infrastructure.

The site already had approximately 150,000 litres of hot-water storage capacity, providing a thermal buffer between heat generation and immediate process demand. Stored hot water can help a heat pump operate for longer periods under suitable conditions while accommodating variations in production requirements. Its effectiveness depends on available storage volume, water temperature, control settings and the timing of heat demand.

Commissioning proved more involved than installing the equipment and connecting the electrical supply. The project required adjustments to control logic, flow rates, temperature setpoints and sensor arrangements. The final operating report also documents refinements to the management of preheat storage and the integration of heat recovery with existing refrigeration equipment.

These issues affect whether an installed heat pump can deliver its intended performance reliably. A system may have sufficient nominal thermal capacity but still encounter difficulties if the heating circuit does not provide the correct flow, a control sensor is positioned poorly or thermal storage is managed in a way that causes unnecessary interruptions. The interaction between equipment therefore needs to be tested under normal production conditions.

Hardwick’s reported operating hours also changed between the two years examined. Annualised runtime fell from approximately 5,512 hours in the first year to 4,277 hours in the second, with the reduction attributed partly to drought-related constraints on meat processing operations. That variation illustrates how changes in factory utilisation can alter heat pump operation independently of the equipment’s technical capabilities.

Lower utilisation can also affect project economics. Industrial heat pumps generally require substantial capital expenditure, and their financial performance depends on how frequently they operate, their electrical consumption and the value of displaced fuel. A plant with sustained demand for moderately hot water may achieve a different result from an operation with intermittent requirements or a process dominated by higher-temperature heating duties.

Other food manufacturing sites may have opportunities to recover heat from refrigeration systems, production equipment or waste streams. The availability of a suitable heat source must be assessed against the temperature and quantity of heat required elsewhere in the facility. Where useful heat and demand occur at different times, storage or a supplementary heating system may be needed to maintain production requirements.

Hygiene controls remain a constraint on process heat changes. Water used for cleaning or sanitation must achieve the temperatures and other conditions required by validated procedures. An energy-saving installation cannot justify reducing a critical process parameter, so equipment design must accommodate food safety obligations alongside operational and financial objectives.

The Hardwick project demonstrates that partial electrification can deliver measurable benefits while retaining conventional heating for duties beyond the heat pump’s operating range. Its reported savings are specific to the site, the installed equipment, production utilisation and operating conditions. They cannot automatically be transferred to another factory without assessing that operation’s heat demand, electrical infrastructure and available recovery opportunities.

A2EP’s wider assessment indicates growing interest in these applications across Australian industry. However, its forecast of more than 230 conversions by the end of 2027 remains dependent on individual projects progressing through investment, installation and commissioning. The doubling of major installations since 2022 also refers to industrial and commercial buildings collectively, rather than establishing a separate growth rate for food processing.

The independently documented Hardwick results provide a more detailed measure of progress than the wider adoption forecast. The project combined a new heat pump, existing heat recovery opportunities, upgraded electrical infrastructure and thermal storage to meet a substantial share of process hot-water demand. Its operating record also identifies the control, integration and utilisation constraints that future food manufacturing projects will need to address.