Low carbon industry represents a new market opportunity for providers of alternative energy solutions in the journey to a net zero future.
Low carbon industry is the goal of the world’s manufacturers and major fossil fuel consumers as the need to reduce greenhouse gas emissions increases.
Making the change to low carbon industry is a major challenge but also represents a significant market opportunity because the volume of emissions is so large. A study by Aurora Energy Research estimated the global market for industrial heat could be worth more than $313 billion by 2030, more than three times the total market for utility-scale electrical batteries.
Heat generated by fossil fuels makes up almost two-thirds of industrial energy demand across all industrial processes and almost one-fifth of global energy consumption. Industrial carbon emissions represent 29 per cent of global greenhouse gas output in an average year. Decarbonising these emissions to achieve low carbon industry is critical as the global economy charts a course to a net zero future.
The problem across industry is not just carbon emissions but the heat produced by burning fossil fuels. “Industrial heat is often termed ‘hard to decarbonise’ because of the large, and diverse range of processes used within industry,” said Emma Ashcroft, associate director of the Carbon Trust cities and regions team. “Most industrial heat is generated using coal, natural gas and oil to drive processes from chemical reactions to distillation and drying.
“Because of this diversity, it also means there is no one solution for decarbonising all sectors. Instead, a wide range of technologies are likely to play a role. Many at an early stage of development and not yet commercialised. The next steps in the decarbonisation journey are about scaling these options and removing barriers for low carbon replacements.”
Electricity will increasingly be used to power industry, generated from a range of sources to meet individual needs. Industries such as cement and steel production require very high temperatures but half of the heat used by global industry is for low-heat processes such as paper or plastics manufacturing. It is possible to electrify such low-heat processes but it’s expensive as electricity from wind and solar is intermittent, costly and sometimes unavailable making it an unreliable solution for the 24-7 requirements of industrial processes.
Biomass can be used as a substitute for fossil fuels in some industrial settings to power sustainable combined heat and power units. The issue for low carbon industry is whether supplies of sustainable biomass can be scaled up without affecting food production or habitat preservation.
Heat pumps are an attractive solution for some low-temperature applications but industrial heat pumps currently available can only supply heat up to 180C which is not enough for more than half of industrial applications. Developments to increase output from heat pumps are ongoing and could deliver major benefits.
Carbon Capture projects have long lead times and could increase the cost of industrial processes in addition to extending the dependence on oil and gas. The technology has yet to prove itself and will likely be superseded by alternatives like electrification or low-carbon substitutes such as bio-fuels.
Hydrogen can be produced with low emissions. Industrial applications are seen as a key market for low carbon hydrogen. A potential drawback for hydrogen made from electrolysis is that projects have long lead times and the production process is inefficient which can lead to high costs relative to alternatives.
Thermal energy storage could be the answer to many low carbon industry needs. It enables industry to capture excess or low-cost renewable electricity by warming up a storage medium to temperatures up to 400 C (752 F), far higher than heat pumps. Thermal energy storage provides low-carbon heat and steam delivery on demand and is cost-competitive, flexible, reliable, scalable for industrial applications up to gigawatt-hour requirements.
There are benefits to thermal storage over hydrogen and CCS. It’s more cost effective, it is available now and it’s not dependent on a change in gas to hydrogen or some form of technology, which still isn’t readily available and cost effective.