Powering Industry with Renewables: A Path to Cleaner Heat and Energy Security

A substantial portion of industrial energy demand—about 70%—is for heat, primarily low-temperature heat and steam used in sectors like food, textiles, chemicals, and paper. These processes are responsible for nearly half of all direct industrial CO2 emissions. The promising news is that these temperature requirements are well within the reach of existing electric technologies.

The trend towards electrification is already accelerating globally, driven by improving cost-competitiveness, technological advances, and supportive policies. As national power grids become greener with more wind and solar power, using electricity for industrial heat automatically translates into a lower carbon footprint for manufacturing.

The pathway to electrification is built on a foundation of energy efficiency. By first optimizing processes, insulating equipment, and capturing waste heat, factories can reduce their overall energy demand, making the subsequent switch to electric solutions more manageable and cost-effective.

•Industrial Heat Pumps:​ Highly efficient for delivering heat up to 150°C.

•Electric Boilers:​ A straightforward solution for generating steam at temperatures up to 350°C.

Furthermore, Thermal Energy Storage​ is a game-changing enabling technology. By storing excess renewable electricity as heat in simple, low-cost materials like sand or bricks, factories can ensure a continuous heat supply, overcoming the variability of solar and wind power. This technology is significantly cheaper than battery storage and is rapidly gaining traction.

The drive to electrify industrial heat is gaining momentum worldwide, with distinct regional drivers:

•European Union:​ For the EU, electrification is a strategic energy security imperative. It has the potential to slash natural gas use by 35 billion cubic meters annually. While heat pumps are already economically attractive compared to gas boilers in several member states, supportive policies like renewable heating targets and funding are essential to accelerate deployment.

•China:​ China is aggressively pursuing electrification through its carbon neutrality goals. Directly powering industrial processes with dedicated solar or wind projects, bypassing the grid, can dramatically reduce costs. Strong national policies, including the latest Five-Year Plan, are providing a clear framework for this transition.

•Southeast Asia (ASEAN):​ Industrial parks, which are central to the region's manufacturing landscape, offer a perfect opportunity for centralized heat electrification. While regional plans support green hubs, overcoming challenges like grid constraints and high upfront costs will require targeted policies and demonstration projects.

Despite the clear benefits, global policy support is still in its early stages. To unlock the full potential of renewables for industry, the IEA recommends six priority actions:

1.Integrate Electrification into Policy:​ Make heat electrification a central pillar of national industrial and energy decarbonization roadmaps.

2.Modernize Grid Planning:​ Anticipate rising industrial electricity demand in long-term grid planning and prioritize flexible connections.

3.Reform Electricity Pricing:​ Level the playing field by reforming taxes and levies that often disadvantage electricity compared to fossil fuels.

4.Provide Targeted Support:​ Offer financial incentives and support innovative business models to de-risk the initial investment in new technologies.

5.Invest in Skills Development:​ Expand training and certification programs to build a workforce skilled in installing and maintaining electric heating systems.

6.Foster International Collaboration:​ Develop common technical standards to ensure interoperability and drive down costs through economies of scale.