Electrification of Industry: Potential, Challenges and Outlook

Abstract

Industry is one of the most difficult sectors to decarbonize. With the rapidly falling cost of solar PV, wind power, and battery storage, industry electrification coupled with renewable electricity supply has the potential to be a key pathway to achieve industry decarbonization. This paper summarizes the latest research on the possibility of electrification of the industry sector. The transition to industry electrification would entail major changes in the energy system: large scale increases in renewable electricity or nuclear power supplies, the expansion of electricity transmission and distribution networks, completely different end-use technologies for process heating, and new infrastructure for distributing and dispensing hydrogen. Thus, aggressive and sustained supportive policies and much wider research, development, demonstration, and deployment activities are required to meet net zero carbon emissions goals in the industrial sector. Existing economically competitive electrified industrial processes (such as electric arc furnaces for secondary steelmaking from scrap steel), coupled with zero-carbon electricity sources can sharply reduce greenhouse gas emissions (GHG) compared to manufacturing processes that rely on fossil fuels. Fuel switching in industry from fossil fuel–based process heating to electrified heat can offer many product and productivity benefits, but operating costs in general are much higher than fossil fuel-based heating. Either much lower costs of electricity and energy storage are required and/or new, cost-competitive electric-technology applications are needed to enable further electrification of industry. Indirect electrification i.e., hydrogen production via water electrolysis is another complimentary technology reliant on electricity. Hydrogen can be used as an energy carrier, industrial feedstock for products and fuels, or for long-duration energy storage, and thus can also play a key role in industry decarbonization when the hydrogen is produced from zero-carbon electricity and/or with carbon capture and storage. As with direct electrification, cost is the key barrier for the deployment of hydrogen resources.