Abstract
<title>Abstract</title> <p>Industrial facilities worldwide reject between 20% and 50% of their primary energy input as low- and medium-grade exhaust heat, however, deployment of recovery systems in GCC (Gulf Cooperation Council) remains well below OECD (Organization of Economic Cooperation and Development) average. The Kingdom of Bahrain has some heavy manufacturing industries such as aluminium smelting, petrochemicals, and steel, however, the lack of widespread exhaust-heat recovery is evident. This research presents a reproduceable design, thermo-fluid modeling, and techno-economic assessment of a gas-to-water shell-and-tube exhaust heat recovery system (EHRS) that is contextualized with Bahrain industry for representative exhaust stream (320°C, 3.2 kg/s, 6 000 h/yr). A reproducible MATLAB/Simulink digital twin was developed, integrating steady-state thermodynamic sizing, dynamic plant response, fault injection (fouling, sensor bias, flow loss), and an anomaly-detection layer based on moving statistics. Results show a nominal recovery of 537.6 kW with an exchanger area of 72.7 m², yielding 3226 MWh of useful energy annually, displacing 3795 MWh of natural-gas fuel, and avoiding of ≈ 686 t CO₂/yr. Techno-Economic screening using 2025-26 Bahrain industrial tariff yield a payback of 2.3–3.5 years and a positive 10-year NPV across all sensitivity scenarios. A Heat-as-a-Service (HaaS) Energy-Service-Company (ESCO) business model is proposed as the most viable route to market in Bahrain, to eliminate host factory CAPEX exposure and aligning with national sustainability targets.</p>