Today, a significant portion of global energy consumption comes from industry. With 37 percent of total global energy used by industries like chemicals, manufacturing, and pulp and paper, and two-thirds of this for heat generation, the demand for industrial heat is substantial. Approximately 80 percent of this heat is generated by fossil fuels, posing a significant challenge in the face of strict climate targets. Many industry players recognize the need to decarbonize heat urgently. However, factors such as the limited availability of cost-effective technologies and capital constraints are hindering large-scale investments in heat electrification.

Unlocking the Potential of Heat Electrification for Industrial Decarbonization

An Overview of Decarbonization and Heat Electrification

The net-zero transition is one of the most significant challenges of our time. Over 5,000 businesses across various regions and industries have set emission-reduction targets, and regulators are taking decisive action. For example, the European Union aims to reduce emissions by 55 percent by 2030 and achieve net zero by 2050. To meet this goal, the development of green power supply needs to be accelerated, but the grid infrastructure is struggling to keep up with the increasing intermittencies from renewable sources.Fortunately, there are already available technologies to enable electrification in the industrial segment and reduce emissions. In addition to heat electrification, other decarbonization pathways like hydrogen and carbon capture and storage require significant infrastructure build-out and investment. Different industry verticals have varying levels of potential for decarbonization based on their temperature requirements. Manufacturing, food and beverage, and agriculture and forestry are the most reliant on low-temperature heat processes, while chemicals, iron and steel, and nonmetallic minerals have higher temperature requirements.

Heat Electrification Technologies: The Industrial Decarbonization Option for the Here and Now

Heat technologies today can be categorized into boilers and process heaters or furnaces. Boilers are mainly gas-powered and dominate low to mid-temperature levels up to 500ºC for steam or thermal oil heating. Higher temperatures are generated by process heaters or furnaces.A wide range of mature electrification technologies is available today to cover different heat applications and temperature ranges. Heat pumps can cover low temperatures up to 150ºC, while mechanical vapor recompression (MVR) technology can handle higher temperatures. Electric boilers can provide the same temperature ranges as gas boilers. Turbo and induction heaters can cover temperatures even higher than 1,000°C depending on the setup.Among the electrification options (excluding high-temperature applications in heavy industries), five major technologies - heat pumps, induction heaters, MVR, e-boilers, and turbo heaters - can cover more than 80 percent of the market across industries. Their technical characteristics are mainly based on temperature, output media, and industrial-scale maturity. Thermal Energy Storage systems can be used to capture intermittent electricity.Applications of industrial heat pumps in the food and beverage industry are already in place. In breweries, for example, steam generation can be fully decarbonized using existing heat pump technologies. Along with downstream decarbonized heat technologies, the supply of electric heat infrastructure and renewables needs to be developed. For example, a pilot e-cracker in Europe requires a significant amount of windmills and batteries to cover intermittent renewables output.For the remaining market, technologies like resistive heaters, clean steam boosters, and air preheaters are needed for heat generation and recovery. Innovation is ongoing for emerging technologies like plasma torches and induction heaters, which have the potential to electrify high-temperature processes in cement and chemicals.

Different Plays for OEMs to Consider

Many heat electrification technologies are competing for certain use cases, and the "winning" technology has not been determined. OEMs need to consider three points when choosing technologies: maturity level in the market, individual heat setup and output media within a plant, and specific process requirements.For portfolio choice, some OEMs focus on one technology to become best in class, while others aim to offer a wider range of technologies. In some cases, combined technologies are needed, and broad portfolio players can provide capabilities and advisory services in different industrial sectors.For technology choice, OEMs with deep technical expertise can innovate by offering new technologies for previously unaddressed applications, especially in high-temperature heat processes. However, this is a high-risk, high-reward play. Alternatively, they can focus on proven, mature technologies and build economies of scale.For market focus, OEMs need to determine which geographies and industry sectors to focus on. Different geographies have varying regulatory environments and fuel and carbon prices. Customers within industries also differ, and OEMs need to understand their requirements.For go-to-market approach, success requires a deep understanding of customer requirements and key purchasing criteria. Technology players can provide technical-advisory services and conduct sensitivity analyses. Digital services for optimized heat asset operations can also be helpful.In summary, the decarbonization challenge is significant, but industry leaders can start electrifying industry today. By accounting for existing infrastructure and investment requirements and answering strategic questions, OEMs can determine the right decarbonization pathways and technologies for their businesses.