(249b) Systems Analysis of Industrial Electrification

Over one third of global energy use can be attributed to the industrial sector [1]. Reducing emissions and moving towards a more sustainable industry requires the transition from fossil-based energy usage towards low-carbon technologies. In the electricity sector, emission reduction is directly linked to the penetration of renewable electricity sources. This reduction can be transferred to the transportation and residential sectors via electric vehicles and electric heating applications for buildings, causing both sectors to continuously reduce their emissions. In industry, where over 60% of the energy demand is related to direct fuel combustion [2], the electrification of heat demands can offer significant emission reduction potential if electricity from renewable resources is available. Furthermore, shifting from fossil-based production processes to electricity-operated ones offers emission reduction opportunities [1]. Besides enabling the reduction of industrial emissions, process electrification might enhance the integration of variable electricity components in the grid, such as PV or electric vehicles.

However, compared to the residential and transportation sectors, the economic and environmental viability of industrial electrification is more difficult to establish because of the wide range of production process characteristics and the environment in which these processes are placed. For instance, many production processes require heat at high temperatures, making economical electrification challenging for many of the present market conditions. Furthermore, operational requirements might hinder the exploitation of intermediate renewable electricity availability. Nonetheless, the potential of electrification applications is widely recognized in the literature. The types of studies of electrification in the literature can generally be divided into two categories. The first category includes studies that examine the potential of electrification for high-level outlook scenarios, focusing on certain regions or sectors. For instance, one study investigated the development of the US industrial energy use and estimated that 50% will be from low-carbon electricity by 2050 [3]. The European decarbonization strategy discusses the potential of electrification technologies for different sectors and how possible deployment pathways could look like [4]. The second category of studies found in literature addresses the electrification of one specific industrial sector or process. For example, the electrification of methanol production from renewable electricity has been studied, pointing to the role of process flexibility [5]. Another study examined the electrification of the basic material sector in the European Union, discussing the impact of its electrification on the overall European electricity demand [6].

While the first type of studies identify processes to potentially electrify, they do not consider the impact of certain process parameters on the competitiveness of electrification. The second type of studies usually provide valuable insights for the electrification of the respective sector or process, but the obtained results cannot by readily generalized to other applications.

To address this gap, we develop a framework to analyze the electrification of generic industrial processes, considering economic and environmental criteria. A set of parameters is used to describe process characteristics and the landscape in which the systems are established, allowing us to study any process in any region of interest.

First, the framework is demonstrated on the electrification of ammonia production, where the model parameters are fixed to describe the particular process characteristics. We use our framework to investigate under which external conditions electrified ammonia production via electrolysis is preferable to conventional process routes, considering both cost and emission criteria. We find that under an electricity price of 70 USD/kWh electrifying ammonia production leads to a cost increase of 153%. However, if the electricity price drops to below 0.7 times that of natural gas, on a kWh basis, the electrified process becomes preferable compared to conventional production. Furthermore, depending on the origin of electricity, significant emission reductions can be achieved.

Second, to demonstrate the full potential of the proposed framework, we study the benefits of electrification under varying process, economic, and environmental parameters. We investigate how different process characteristics parameter combinations influence electrification, and what their implications on economic and environmental performance indicators are. For instance, we analyze the effect of energy cost and energy demand on the relative change in operating cost when electrifying a generic process.

The attached figure shows the relative cost of an electrified process to a fossil baseline process, as a function of the relative electricity to natural gas cost and the relative energy demand of the process, compared to the baseline. If the electrified process has the same total energy demand as the baseline process, the electricity price must decrease to be 1-3 times that of natural gas depending on the type of energy demand. In the case that electricity prices remain higher than those of natural gas, our results can also be used to readily find the energy demand of a potential new electrified process that would be needed to be financially competitive with the baseline process.

References
[1] M Wei, CA McMillan, and S de la Rue du Can. “Electrification of Industry: Potential, Challenges and Outlook”. en. In: Current Sustainable/Renewable Energy Reports 6.4 (Dec. 2019), pp. 140–148.

[2] U.S. Energy Information Administration. Manufacturing Energy Consumption Survey. 2021.

[3] White House. United States Mid-Century Strategy for deep decarbonization. 2016.

[4] Y Chan, L Petithuguenin, T Fleiter, A Herbst, M Arens, and P Stevenson. Industrial Innovation: Pathways to deep decarbonisation of Industry. Part 1: Technology Analysis. 2019.

[5] C Chen and A Yang. “Power-to-methanol: The role of process flexibility in the integration of variable renewable energy into chemical production”. In: Energy Conversion and Management 228 (Jan. 2021), p. 113673.

[6] S Lechtenböhmer, LJ Nilsson, M Åhman, and C Schneider. “Decarbonising the energy intensive basic materials industry through electrification – Implications for future EU electricity demand”. In: Energy. Sustainable Development of Energy, Water and Environment Systems 115 (Nov. 2016), pp. 1623–1631.