Electrification Of Industry - NREL

Electrification of IndustrySummary of Electrification Futures StudyIndustrial Sector AnalysisColin McMillanSeptember 2018

Summary Limited policies exist to motivate industry to electrify; this isunlike buildings and transportation. Industrial electric technologies lack the public profile ofelectric vehicles and consumer-focused technologies forbuildings. Industry has unique barriers that deter adoption and uniqueopportunities that may accelerate adoption. Researchers and policymakers face significant gaps in data(e.g., energy use, cost) and analysis tools.NREL 2

Electrification Futures Study(EFS) Overview Multiyear collaborative study exploringthe potential effects of electrictechnology adoption on:– Demand and use patterns– Electricity system transformation– Need for flexibility/demand sidemanagement– Costs, benefits, and impacts.www.nrel.gov/efsNREL 3

EFS Overview Electrification: the shift from any nonelectric source of energy to electricity atthe point of final consumption Contiguous U.S. energy system, includingtransportation, residential andcommercial buildings, and industry Focus on 2050, but transition modeledas wellNREL 4

EFS Overview Phased research and reporting approach– Year 1: electric technology cost andperformance assessment– Year 2: demand-side technology adoptionscenarios– Year 3 : supply-side evolution and operation,electrification impacts, and demand-sideflexibilityNREL 5

EFS: IndustryEnergy Use

Industry Primary Energy Use: 1949–20154040%Quadrillion Btu3030%Petroleum2020%Natural GasElectricity Retail Sales10Coal010%Electricity Losses1949Biomass19591969197919891999Data from EIA “Monthly Energy Review” x.php)2009% Electricity of Industry Primary Energy% Electricity0%NREL 7

Electricity by End Use SectorJadun, Paige, Colin McMillan, Daniel Steinberg,Matteo Muratori, Laura Vimmerstedt, and Trieu Mai.2017. Electrification Futures Study: End-Use ElectricTechnology Cost and Performance Projectionsthrough 2050. Golden, CO: National RenewableEnergy Laboratory. sti/70485.pdfNREL 8

Electricity Use by Industry SubsectorManufacturing: Large variation in theamount of electricity used:– 7% of site energy use in petroleumrefining is electricity– 63% of site energy use in computers,electronics and equipment iselectricityNon-Manufacturing: Lower-quality dataare available for non-manufacturingindustries (agriculture, mining, andconstruction), but electricity is generally 10% of site energyData from DOE “Manufacturing Energy and Carbon Footprints: 2010 energy-and-carbon-footprints-2010-mecs)NREL 9

Manufacturing Energy by End Use (2014)Data from DOE “Manufacturing Energy and Carbon Footprints: 2010 MECS” and-carbon-footprints-2010-mecs)NREL 10

Electricity Use by Manufacturing End Use3,000Electricity Use ,0005000Machine DriveElectro-ChemicalFacility HVACProcess Cooling Facility Lighting Process Heating-- Other End-Usesand RefrigerationPrimary MetalsManufacturing Industry End-UseProcess heating is 50% of manufacturing energy use, but only 5% of process heating is electrified.Data from DOE “Manufacturing Energy and Carbon Footprints: 2010 MECS” and-carbon-footprints-2010-mecs)NREL 11

EFS: IndustryElectrification

EFS Questions for Industry Year 1: Technology cost and performance projections– Which industries and end uses could be electrified?Which electrotechnologies are relevant?– How might the cost and performance evolve? Year 2: Electric technology adoption scenarios– How quickly and extensively would the relevantelectrotechnologies be adopted?Our efforts were limited to using existing data and toolsNREL 13

EFS ScenariosMai, Trieu, Paige Jadun, Jeffrey Logan, Colin McMillan, Matteo Muratori, Daniel Steinberg, Laura Vimmerstedt, Ryan Jones, Benjamin Haley, and Brent Nelson. 2018. Electrification FuturesStudy: Scenarios of Electric Technology Adoption and Power Consumption for the United States. Golden, CO: National Renewable Energy Laboratory. sti/71500.pdfNREL 14

EFS Approach for IndustryWhich industries and end uses could be electrified?Which electrotechnologies would be chosen?How might the cost and performance evolve? Literature search EPRI consultation Payback and fuel cost analysisLiterature is old (20 years), largely anecdotal, and difficult togeneralize for existing energy analysis tools.NREL 15

EFS Approachfor IndustryHow quickly and extensively would the relevantelectrotechnologies be adopted? Literature searchLiterature is old (20 years), largely anecdotal, and difficult togeneralize for existing energy analysis tools.NREL 16

EFS Approach for Industry:Sector and Tech SelectionIndustry Scope Excluded: iron and steelprocesses, cement, lime,petroleum refining, andpulp and paper processes Included industries and enduses account for 43% ofindustry fuel energy use. Extent of electrificationultimately depends on stockturnover and adoptionassumptions.Table from Jadun et al. 2017 (Jadun https://www.nrel.gov/docs/fy18osti/70485.pdf)NREL 17

EFS Approach for Industry:Payback AnalysisAnalysis of DOE IndustrialAssessment Center (IAC) data DOE-sponsored program thatrecommends energy-relatedimprovements to smallmanufacturers Analyzed electrificationrecommendations and theirimplementationSimple payback is not enough todescribe behavior.Jadun et al. 2017 (Jadun https://www.nrel.gov/docs/fy18osti/70485.pdf)NREL 18

EFS Approach for Industry:Adoption Heuristic Literature and anecdotal evidencepoint to productivity or profitabilitybenefits as the primary drivers of newtechnology adoption: improvedproduct quality, higher throughput,reduced scrap and labor costsCreated an adoption heuristic toapproximate this behavior– Limited or no benefits (e.g., electric boilers)– moderate benefits (e.g., resistance heating)– large benefits (e.g., induction melting)Note: Effects also depend on stock turnover.NREL 19

EFS Approach for Industry:EnergyPATHWAYS Industrial scenario modeling was conducted withEnergyPATHWAYS (EP).– EP is an open-source energy and carbon planning tool foruse in evaluating long-term, economy-wide greenhousegas mitigation scenarios. EP was expanded to include stock turnover behavior andindustrial electrotechnology characteristics. Limited granularity for processes and technologies due todata and model SNREL 20

EFS Industry Results Most-significant growth forelectrotechnologies withproductivity benefitsIn the High scenario,electrotechnologies provide 63%of curing needs, 32% of dryingservices, and 56% of otherprocess heatingHigh scenario driven by a 50%reduction in equipment lifetimesMai et al. 2018 (https://www.nrel.gov/docs/fy18osti/71500.pdf)NREL 21

EFS Industry Resultsin Context Industrial electrification is moremuted than other sectors.Even in the reference scenario,the structure of the economy—not electrotechnologies—drives changes to electricityshare within industryMai et al. 2018 (https://www.nrel.gov/docs/fy18osti/71500.pdf)NREL 22

EFS: IndustryChallenges

Electrification Challengesfor Industry For analysts/modelers: big improvements needed in dataand tools to estimate generalized, national results and toidentify opportunities for electrification For policymakers: incomplete picture of opportunities andimpacts from analysts/modelers For electrification proponents: no technological momentum,low natural gas prices, significant aversion to processdisruption (process is biggest piece of energy pie), and capitalinvestment decision-makingNREL 24

Thank youwww.nrel.govNREL/PR-6A20-72311This work was authored by the National Renewable Energy Laboratory, operated by Alliance for Sustainable Energy,LLC, for the U.S. Department of Energy (DOE) under Contract No. DE-AC36-08GO28308. Funding provided by U.S.Department of Energy Office of Energy Efficiency and Renewable Energy Office of Strategic Programs. The viewsexpressed in the article do not necessarily represent the views of the DOE or the U.S. Government. The U.S.Government retains and the publisher, by accepting the article for publication, acknowledges that the U.S.Government retains a nonexclusive, paid-up, irrevocable, worldwide license to publish or reproduce the publishedform of this work, or allow others to do so, for U.S. Government purposes.

Electrification of Industry: Summary of Electrification Futures Study Industrial Sector Analysis Author: Colin McMillan Subject: This presentation provides context for electrification of the industrial sector and summarizes industrial analysis performed for the Electrification Futures Study. Created Date: 9/20/2018 10:30:39 AM