Oil volatility – a wake-up call for buildings and industry

1 April 2026

As energy prices continue to rise, it makes no sense to treat heating and cooling as separate systems and pass up the potential to make better use of wasted heat. Jose La Loggia puts the case for integrated thermal management systems.

Oil price volatility has returned to global energy markets, echoing earlier periods when prices spiked repeatedly above $100 per barrel. These episodes are never one-offs; oil volatility is predictable. This latest surge has not only driven up energy costs but also heightened awareness of the risks tied to continued fossil fuel dependence – especially in the UK and the European Union, which are resource-scarce. The path to long-term energy security is to move away from fossil fuels. For buildings and processes that still depend on fossil fuel heating, the message is clear: we need to electrify, recover more energy, and boost efficiency.

What is different today is that far better alternatives exist that not only provide energy security but also help with decarbonising our cities. High-efficiency heat pumps can cool one part of the building while simultaneously heating another area, leveraging waste-heat recovery technology. These proven solutions have advanced significantly in recent years, and offer reliable performance, predictable operating costs and meaningful emissions reductions. They provide the resilience that businesses urgently need in a world where energy shocks are becoming more frequent.

After three decades working across climates ranging from +40°C in Sydney to –30°C in Wisconsin, one lesson has been constant in my career: every building, every process, every community relies on heating and cooling. The question is not whether we need these systems – it’s how efficiently and intelligently we operate them.

Disconnected systems

Across the UK and Europe, most buildings and industrial plants still use two disconnected systems: chillers for cooling and boilers burning fossil fuels for heat. This siloed design leads to a remarkable inefficiency – waste heat produced by cooling is expelled into the atmosphere, while new fuel is burned to generate more heat.

In an era of volatile energy prices and ambitious climate targets, allowing paid-for energy to escape into the air is absurd. It is also entirely avoidable.

A thermal management system approach flips this mindset. By integrating heating and cooling into a thermal management system, we can simultaneously deliver both with one single unit, capture heat that would normally be wasted, and reuse it for space heating, hot water, or industrial processes. Instead of functioning as two opposing systems, they operate as one optimised thermal ecosystem. This systems-level thinking offers reliability, cost stability and resilience – qualities essential in a volatile energy landscape.

Clear benefits

A well-designed thermal management system can be up to 400% more efficient than traditional setups. That efficiency translates into real advantages:

• reduced energy bills, even in volatile markets
• less exposure to fossil-fuel price spikes
• lower emissions without operational trade-offs
• faster payback than many assume, often in just a few years

In practice, this means building owners, facility- and plant managers can plan with far greater confidence. When heating no longer depends on burning fossil fuels, cost predictability improves. When waste heat becomes a recoverable resource, the whole operation becomes more stable. This is no longer a future-proofing exercise. It’s a direct investment in immediate competitiveness.

Case study

One of the clearest demonstrations of this approach comes from Organon, a global pharmaceutical manufacturer with its largest site in Oss, the Netherlands. The site has a complex mix of processes, utilities and office space, making it well suited to the benefits of a thermal management mindset, which Organon is gradually implementing.

The first set of projects includes two water-to-water heat pumps installed in the manufacturing facility to provide cooling for compressed air treatment while recovering the resulting heat for the central heating network. Additional heat pump capacity has also been added in the site’s office buildings as part of a renovation of the heat-cold storage (HCS) system. Together, these heat pump installations save nearly 7,700 gigajoules of energy annually – equivalent to approximately 243,000 cubic metres of gas – reducing reliance on gas fired boilers and supporting Organon’s goal of becoming climate neutral by 2035. 

These steps have created momentum for further work on adapting air-handling units for low temperature heating and expanding the use of thermal energy storage. Organon’s journey illustrates a simple truth: the technology exists, the business case is strong, and the efficiency gains are replicable across sectors.

Return on investment

Shifting perceptions is essential to unlocking the full potential of integrated thermal management. While concerns about cost, complexity or site limitations persist, these often reflect legacy thinking rooted in siloed systems. Upfront investments can be higher, but they are typically offset by long-term savings, with all-in-one heating and cooling systems often delivering paybacks of just two to three years. Complexity is manageable: the core technologies already exist, and the task now is to convert plants to thermal systems and build market acceptance. Site constraints are also less of a barrier than many assume, with around 80% of current projects taking place in existing facilities rather than new builds.

Moving from separate to integrated systems does not mean reinventing the plant; it simply means rethinking how energy flows through it – and recognising how much of that energy is currently being lost.

Wake-up call

The recent surge in oil price volatility should serve as a strategic wake-up call. Continued reliance on fossil fuel heating exposes businesses to unpredictable costs, operational risk and rising regulatory pressures. Integrated thermal management systems offer a pathway to stability. They reduce exposure to volatile markets, improve operational resilience, and support the transition toward electrification and decarbonisation.

Crucially, they change the way organisations think about energy. Heat is no longer waste – it is a resource. Systems are no longer disconnected – they are interlinked. And energy is no longer something we simply consume – it is something we manage. The technologies are ready. The examples are proven. The imperative is clear.

For the businesses that act now, the next spike in energy prices will be a challenge, not a crisis.

Jose La Loggia, group president EMEA, Trane Technologies