A heating transition for Germany

People who want to contribute to the energy transition in response to the climate crisis: We introduce individuals whose ideas and commitment are driving the expansion of renewable energies in Germany and around the world..

In a now well-known scene from the 2006 documentary “An Inconvenient Truth”, Al Gore can be seen pacing back and forth in front of a huge screen. It charts the CO₂ concentrations and temperatures on Earth over the past 650,000 years, showing two curves zigzagging up and down almost in parallel. On the right-hand side, in the present day, the CO₂ curve is rising so rapidly that Gore has a hydraulic lift raise him high enough to reach the same level as the displayed value. And then even higher to show the reading predicted for the next 50 years. At a height of nearly ten metres, he gazes down into the audience and asks: “What do you think will happen with the temperature curve if we do nothing?”

“That totally shocked me at the time. I thought to myself, we need to act right now,” explains Philipp Pausder. The 2.06 metre tall former basketball pro, who is now a businessman, is at the Berlin headquarters of his company Thermondo on the fifth floor of a smart new office building in the city’s Kreuzberg district and talking about what motivates him to drive forward the energy transition. “When the film premiered, I was a student at the IE Business School in Madrid, so I was essentially on the lookout all the time for new business ideas. And I realised immediately that Al Gore’s call for action also presented an incredible business opportunity,” says the 47-year-old entrepreneur.

How will Germany become climate neutral by 2045?

Once he got back to Germany, Pausder and two partners set up the company Thermondo at the end of 2012. Their goal was to make heating in Germany climate neutral. And to do so “at the speed of the market,” as the start-up entrepreneur says. The team of founders was convinced that heating systems were being installed far too sluggishly and inefficiently, and that planning processes were far too complicated. “Only 17 percent of the companies even had a website,” he explains. “It was clear to us that if we wanted to be as quick as the climate crisis required us to be, we would need extremely efficient and flexible specialist firms.” To make the heating industry more dynamic, Thermondo believed that digitisation was the way forward, so it invested millions to develop software that would optimise process management during the installation of heating systems. “To this day, this remains a central element of our company.”

With over 800 employees, Thermondo is now Germany’s biggest provider of heating solutions for detached and semi-detached homes. Currently, Germany still meets more than 80 percent of its heating demand by burning fossil energy sources. Of the country’s 41 million or so households, almost half use natural gas and nearly a quarter use heating oil. This generates a third of Germany’s total CO₂ emissions.

If domestic heating could be generated from renewable sources, this would be the equivalent of waking a “sleeping giant”, according to energy experts. Pausder also uses this image to emphasise at the same time: We have no choice but to shake the giant awake and get him to work for us. “If Germany really wants to become climate neutral by 2045, we must stop using fossil energy sources by 2025 at the latest. After all, heating systems have an average service life of 20 years.”

10,000 heat pumps by the end of 2023

Thermondo is still installing oil and gas heating systems itself, but has recently begun giving greater priority to heat pumps. These are considerably more efficient and can be run entirely on green electricity. “A heat pump is an energy miracle,” enthuses Pausder. It takes advantage of the heat that is already stored in the air or earth and, with the aid of electrical energy, enables it to be used to heat buildings. “That is three times more efficient than a modern gas heating system.” If the German government has its way, six million such devices will be installed by 2030. Anyone who has a new heating system installed after 1 January 2024 must make sure that at least 65 percent of its energy consumption is covered by renewable energies .

This naturally presents a great opportunity for Thermondo. And serves as a huge incentive to really step up the pace now. Pausder has had an information board set up next to the reception desk at the firm’s headquarters. It shows how many heat pumps have been sold and installed to date. Every two hours, the display board clatters - just like analogue departure boards used to at airports - as the information is updated. “I wanted to make it as tangible as possible for our staff to see what we are currently achieving and what we have achieved so far,” explains Pausder. Thermondo’s aim is to install 10,000 heat pumps in detached and semi-detached homes in Germany by the end of the year. To this end, it has 500 specialist employees working all over Germany, including many heating engineers. At the end of April, the display board shows that 2,070 devices have been sold and 1,324 installed.

Thermondo is stepping up the pace of installations

Is this realistic? Pausder nods. After all, his firm has been working intensively for years to accelerate the heating installation process. As portraits of the company repeatedly claim, Thermondo is in the process of industrialising the heating sector. This could well pay off in the case of heat pumps given that installing them is anything but straightforward. “Specialists in three different trades have to work together: You need a heating engineer, an electrician and a builder to lay the foundations,” explains Pausder. Furthermore, it is the provider’s job to arrange government grants for its customers. “But that’s just what we are good at.” Pausder explains that heating firms currently take 18 working days on average to install a heat pump. Thermondo takes ten just now, but plans to reduce this in future to six working days. “We have no time to lose.”