The Need for Industrial Heat in a Clean Economy

In Brief:

• Industrial heating accounts for 20% of global energy demand, is emissions intensive, and requires consistently high temperatures and high fuel density.
• With the falling cost of renewable electricity, technologies such as electrolyzers, thermal batteries, and electric arc furnaces stand to make heating for industrial processes greener.

 

Introduction

 

Despite apparent rollbacks in clean energy policy under the Trump administration, it is important to remember the unexpected progress made in decarbonization over the last several years. This article provides an overview of one rapidly changing energy service in particular: industrial heating. As an essential energy service, heating compromises roughly 50% of global energy demand[1]. Heating for industrial use accounts for 20% of global energy demand[2]. Industrial heating needs high temperatures (>150°C) and thus requires high fuel density[3]. Moreover, heating needs to be consistently provided to enable manufacturing processes[4].

Historically, financial and technological limitations meant that high temperatures were only achievable with fossil fuels[5]. With high dependence on fossil fuels and limited alternatives, energy-intensive industries will be particularly affected by the adoption of clean energy.

Overview of key sectors requiring high heat. Manufacturing sub-sectors rely heavily on fossil fuels for industrial heating and as a result have large climate impacts. Alternative technologies are rapidly growing, driven by the declining cost of renewables. Source: data was adapted from WRI 2024 and McKinsey 2024.

 

Why is it hard to abate emissions for industrial heat?

 

Ferrous metals, cement, chemicals, food and beverages, and paper require varying levels of heat for material transformation. Temperature ranges are typically designated as low (<200°C), medium (~600°C), and high heat (>1000°C)[6]. Roughly 50-60% of industrial heat demanded is below 400°C, and mature, commercial technologies exist for these temperatures[7]. While electrification of high heat for industry still lacks necessary financial and technological maturity, engineering innovation and the falling cost of renewables has spurred the development of novel technologies that can provide high temperatures.

 

What new technologies will energy-intensive industries adopt?

 

Electrolyzers. Electrolyzers utilize electrical current to separate substances into basic components—mostly used to generate hydrogen gas from water[8]. Electrolyzers have two key functions relevant to industrial heating applications: green hydrogen production and replacing carbon intensive feedstocks. The intermittency of renewables greatly undermines clean energy implementation in manufacturing. Green hydrogen helps to solve this issue by enabling load-following generation[9]. Secondly, many current inputs into industrial processes are carbon intensive[10]. For example, cement’s primary feedstock (input material) is limestone, which produces half its weight in CO2 when heated[11]. By utilizing electrolyzers, cement and chemical producers can chemically separate required inputs from alternative low-carbon feedstocks.

Thermal batteries. Thermal batteries store electricity as heat until needed later. Most batteries utilize silica-based materials with average efficiency over 80%[12]. Thermal batteries have a long history in industrial applications yet are now being applied to store the electricity from renewable generation during curtailment[13]. Current commercial batteries can service temperatures of up to 750°C with expected progress in developing batteries at 1800°C by 2030[14]. Therefore, most energy intensive industries can save cheap electricity when supply is high and utilize the heat stored later.

Electric arc furnaces (EAFs). Current US steel and iron production is roughly 68% electric arc furnaces[15]. With increasing rates of electrification and the declining levelized cost of energy (LCOE) for renewables, blast furnaces are being replaced by EAFs[16]. Able to utilize high rates of scrap metal while producing lower emissions, EAFs will continue to dominate the market if there is cheap renewable electricity[17].

 

Conclusion

 

The shift to renewable resources means altering the way energy in the form of heat is consumed to produce iron and steel, chemicals, cement, food and beverages, and paper products. These industries need consistently high temperatures. Overcoming intermittence and producing cost-effective high heat is a challenge, but declining renewable costs are unlocking new technologies. Increasingly, electrolyzers, thermal batteries, and electrified furnaces are being adopted within heavy industry. As they electrify, companies will need to adapt their supply chains to account for novel sourcing of low-carbon feedstocks. Thermal batteries will challenge the conventional model of utility-based heat provisioning and offer novel curtailment and arbitrage opportunities. Ultimately, by focusing on the adoption of these three innovative technologies by hard to abate industries, this article illustrates how clean energy generation will reshape industrial heating, and thus overall de-carbonization.

 

Works cited

 

Brattle 2023. Thermal Batteries. Brattle Group. https://www.brattle.com/wp-content/uploads/2023/10/Thermal-Batteries-Opportunities-to-Accelerate-Decarbonization-of-Industrial-Heat.pdf

Congressional Budget Office (CBO) 2024. Emissions of Greenhouse Gases in the Manufacturing Sector. https://www.cbo.gov/system/files/2024-02/59695-manufacturing-emissions.pdf

Davis et al. 2018. Net-zero emissions energy systems. Science. https://www.science.org/doi/epdf/10.1126/science.aas9793

IEA 2024. Energy Technology Perspectives 2024. https://iea.blob.core.windows.net/assets/93db951b-afae-48fd-a2f8-bce22f24c625/EnergyTechnologyPerspectives2024.pdf

IRENA 2023. Innovation Can Pave the Way to Decarbonize High-temperature Heat in Industries. IRENA. https://www.irena.org/News/articles/2023/Sep/Innovation-can-pave-the-way-to-decarbonise-high-temperature-heat-in-industries

Larson et al. 2021. Net-Zero America: Potential Pathways, Infrastructure, and Impacts. Princeton University. https://www.dropbox.com/scl/fi/ol7ivcso5t2k3wux2r5bk/Princeton-NZA-FINAL-REPORT-29Oct2021.pdf?rlkey=zmhc0gryurzlyfo0faac036v6&e=1&dl=0

McKinsey 2024. Net-zero electrical heat: A turning point in feasibility. McKinsey. https://www.mckinsey.com/capabilities/sustainability/our-insights/net-zero-electrical-heat-a-turning-point-in-feasibility

Roberts 2023a. “Why electrifying industrial heat matters”. Voltz https://www.volts.wtf/p/why-electrifying-industrial-heat

Roberts 2023b. “We are closing in on zero-carbon cement”. Voltz. https://www.volts.wtf/p/we-are-closing-in-on-zero-carbon

WRI 2024. “Where do emissions come from?”. World Resource Institute. https://www.wri.org/insights/4-charts-explain-greenhouse-gas-emissions-countries-and-sectors