In WEO 2018 we introduced the Future is Electric Scenario to test what could happen to electricity demand if economic opportunities for electrification were maximized. We found that industry had the potential to account for a major portion of increased electrification globally, rising from 27% today to 37% in 2040 – an increase of almost 1 700 TWh. This growth would take place across a wide range in various sub-sectors, from 13% in cement production to 60% in aluminium.
The electrification in the scenario is mainly from heat pumps, which account for most of the extra electricity demand, with increased electric-arc steelmaking and electrolytic hydrogen feedstocks for ammonia production playing smaller roles.
Low temperature heat provided by heat pumps can meet at least some of the demand for heat in a wide range of industrial sub-sectors. In light industry, e.g. food and beverage, pharmaceuticals and textiles, low temperature heat (up to 100 °C) makes up nearly half of total heat demand. In the pulp and paper and chemical industries, low temperature heat makes up roughly a quarter of heat demand, versus less than 5% in the cement, aluminium, and iron and steel sectors.
However, further electrification is challenging, and indeed industry has traditionally proved very difficult to electrify – not to mention decarbonise. This is for a number of reasons: industrial production facilities tend to have long lifetimes and a slow turnover of capital stock; capacity for fuel switching in industry is limited as a change in fuel often requires a change in process; high temperature heat (important across most energy-intensive industries) can require significant changes to furnace design and is currently costly and not economically attractive; and the highly integrated nature of industrial processes means that changing one part often requires changes to other parts of a given process. Cement, and iron and steel, which require high temperature heat, are particularly hard to electrify.
There are however a range of frontier electric technologies that hold promise for industry.
- For example, electrification of clinker production using electromagnetic heating offers the potential to decarbonise the cement sector’s most energy-consuming step, though this technology is at the laboratory stage.
- Hydrogen-based direct iron reduction for primary steel production could allow for substitution from coal or natural gas to electricity (if the hydrogen is generated from electrolysis). Hydrogen could also become an attractive option to indirectly electrify industrial high-temperature heat, either via direct combustion or blending with natural gas.
- Electro-technologies for process heat, such as infrared and ultraviolet heating (with applications in drying and curing processes) and induction melting and electric boilers (which are commercial – though challenges remain to scale up) offer further potential for electrification across a range of industrial activities.
- Mechanical vapour recompression can provide higher temperature heat than what is currently practicable using heat pumps. Such technology could be beneficial in pulp and paper, and certain chemical production processes, though to be economical it requires electricity prices lower than what we project in the Future is Electric Scenario.
- Finally, carbon capture, utilisation and storage (CCUS) linked to industrial processes could also increase electricity demand associated with industrial production. Given the challenges in significantly electrifying high temperature heat, CCUS has a critical role to play in decarbonising cement, steel and chemical production.
Further electrification in industry could result in increased environmental performance and productivity – gains which are not always factored into project economics. Such gains, in particular those connected to reductions in greenhouse gas intensity, could help to push cutting-edge electric technologies into the mainstream even more rapidly.
For more on industrial electrification, see the IEA report Renewable Energy for Industry, which includes analysis of many of the electrification options discussed here.