Long-term solution for reducing emissions lies in powering industries with electricity

In the fight against climate change, the industrial sector plays a significant role, consuming over a third of the world's energy and contributing a comparable share of global greenhouse gas emissions in 2022. A new report from Energy Innovation argues that cleaning up this sector with direct electrification supported by renewables is a viable and essential strategy.

One of the key challenges in electrifying the industrial sector is the heat required for many processes. However, nearly half of the heat needed for industrial processes is below 500 degrees Celsius, a range covered by commercially available technologies like resistance, infrared, and induction heaters. Advanced conductors and grid-enhancing technologies can also expand throughput on existing lines, while industrial thermal batteries can reach up to 1700 degrees Celsius, sufficient to meet 75% of the U.S.'s industrial heat demand and two-thirds of China's.

To ensure a skilled workforce familiar with the operation and maintenance of electrified technologies, training and education support is necessary. Funding for research, development, and deployment of high-heat technologies is needed from governments, green banks, and public-private partnerships.

In the U.S., there is over 2,600 gigawatts of new generation waiting in interconnection queues, more than twice the country's current installed capacity. Streamlining interconnection rules to speed up the queue and restricting fees for transitioning from fossil fuel systems to electricity will reduce delays, project risks, and financial penalties for decarbonizing. The average wait time for interconnection requests has risen to nearly five years, and 80% of requests are eventually withdrawn.

On-site renewables can lower costs for firms and allow them to draw electricity during cheaper, surplus hours, especially in regions where wind and solar are abundant, where wholesale electricity rates can drop below $10 per megawatt-hour, making electrification more cost-competitive. Improved efficiency in the industrial sector could offset 40% of the added electricity demand from electrifying eligible processes.

Tax credits, rebates, and grants can reduce capital and operational costs for using clean industrial heat. Firms may face significant additional costs in the form of exit fees from gas utilities, expensive and opaque interconnection upgrades, and high upfront capital investment. However, these costs can be mitigated with the right support and policies in place.

Three key organizations involved in developing and demonstrating technologies for electrifying high-temperature industrial sectors are Fraunhofer ISE, which focuses on technologies like electrode boilers for temperatures above 200°C; companies involved in integrating high-temperature heat storage systems using green electricity such as BIO-FROST Westhof GmbH; and industries advancing biomass and electrically powered solutions for high-temperature processes, including steel, chemical, and cement sectors.

Buy Clean initiatives, green procurement programs, and carbon border adjustment mechanisms can create guaranteed demand for low-emissions materials, further incentivizing the transition to electrification.

In conclusion, electrifying the industrial sector with direct electrification supported by renewables is a viable and essential strategy for decarbonization. With the right support and policies, firms can lower costs, improve efficiency, and contribute to a more sustainable future.

Long-term solution for reducing emissions lies in powering industries with electricity