E4C // Q&A
The Electrification of Industry
How efficient are today’s electric industrial heat technologies? Will surging electricity demand from data centers widen the gap between gas and power prices? And where should an engineer begin when considering electrification at an existing plant?
DURING THE RECENT CATALYZE Series webinar, “The 2035 Initiative’s Roadmap to Electrify Industrial Heat,” two experts behind UC Santa Barbara’s 2035 Initiative shared their thoughts on the future of industrial heat. The conversation builds on themes that will be front and center at the upcoming CATALYZE Summit in Detroit, Michigan, in June.
Eric Masanet, Mellichamp Chair in Sustainability Science for Emerging Technologies at the University of California, Santa Barbara and head of the Industrial Sustainability Analysis Laboratory, joined Andrew Hoffmeister, senior research analyst for the Industrial Program at American Council for an Energy-Efficient Economy (ACEEE). They addressed questions about the real-world feasibility of electrode boilers, high-temperature heat pumps, and electric ovens and dryers; the role of policy in closing cost gaps; and what it will take to scale electrification across diverse industrial sectors. The discussion was moderated by Susan Kish, CEO of Constructive.
During the event, Masanet and Hoffmeister took time to answer a range of technical, economic, and policy questions, and their responses follow (lightly edited for clarity and brevity).
SUSAN KISH
Susan Kish: You have identified four technologies as the most technologically and economically feasible for electrifying industrial processes. They are electrode boilers, air source high temperature heat pumps, ovens, and dryers. How did you choose those and eliminate others?
Eric Masanet: It’s a wonderful question, Susan. The reason we chose those core technologies is because they are gaining market share. These are proven technologies that have low risk. We wanted to focus on technologies that were fairly low risk today, that already had some level of policy support, where we’re seeing a lot of adoption.
That’s one barrier for electrifying industry. If you have a well-designed plant with really tight engineering, you’re reluctant to put in a new technology that perhaps isn’t proven. It’s called the first mover problem. So, that informed how we selected our technologies. We’re focused on how we can move the needle today to start reducing carbon. Because we know we’re going to need a lot more of those advanced technologies in the future to get to net zero.
Susan Kish: Your analysis really focused on the U.S., but many of our participants are from Asia, Europe, Africa, and Latin America. To what extent do you think your recommendations will hold true in other markets?
Eric Masanet: That’s a great question. I think our general findings are transferable to any location in the world. And what do I mean by that? We’ve modeled the typical plant configurations. Of course, they might change here and there around the world, but, you know, we make ethylene and other products that we looked at in more or less the same way around the world. So, I think the technological opportunity is transferable.
No doubt the emissions that one saves will depend on the fuel that’s burned, of course. So, there might be unique factors. But, by electrifying, you generally save energy and you reduce emissions, as long as your grid is relatively clean. Now, if it’s in a place in the world where the grid is very reliant on coal or high emissions, then it might take longer, and maybe the balance will look a little bit different in terms of cost.
Costs will vary, of course. Labor will vary. But I do think the high-level findings [are transferable across borders,] that these technologies work, that they can reduce energy and emissions, and that they can be cost effective under the right conditions. Those findings allow other adopters to know what they what they need to deal with, and what needs to be optimized in order to make it successful. In Ghana, in China, and in Bozeman, Mont.
ERIC MASANET
ANDREW HOFFMEISTER
Susan Kish: The U.S. is seeing a surge of demand for electricity driven by the hyperscalers, as they’re called. Is the electrification of industry going to make the problem worse?
Eric Masanet: Oh, boy, that’s a great question and a tough one. So, just for everyone’s context, the U.S. is seeing a real data center boom. We have more data centers than any other country on the planet, and there are huge investments for AI computing, which are starting to really strain our electricity grid. So when we talk about adding industrial electricity loads on top of that, I understand why there could be some concern.
In fact, this is a barrier. Talking to industrial plant managers and equipment manufacturers, getting enough electricity to the plant can be a barrier for electrification. However, this is something that policymakers need to be aware of. In places where we have net zero goals, in places where we have goals for reducing local pollution and addressing climate change, we do need to electrify industry. So the policy recommendations we produce need to be taken into account.
I will say that there’s kind of a new shift that’s happening in the data center space because they can’t connect to the grid quickly enough. They’re installing their own power on site. Power generation that has the effect of potentially relieving grid stress. And if they’re producing more electricity on site than they need, which some of them may do, they open up an opportunity for industry. But we’ve got to look at all of those loads together, and now at least we have some information to do so.
Susan Kish: Let’s say that you are an engineer at a site that is favorable for electrification. As you said, it’s no longer a question of physics. The technology is around. It’s a market question and it’s a systems question. What’s your first step?
Andrew Hoffmeister: Great question. Okay, so you are a facility-level engineer, right? The first person to talk to would be someone who can deliver one of those energy assessments. If you’re a small company, you might call an industrial technology assessment center. There are universities around the U.S. that have engineering teams that can go out and provide no-cost assessments to small- and medium-sized facilities. Utilities sometimes have programs that can deliver energy assessments. There are also other bodies that can provide those at cost. Industrial heat pump and electrode boiler companies do assessments, and national labs might do assessments as well.
The first step is figuring out the feasibility. Find the pinch points in your facility. The points between your heating and cooling loops where you can connect things and electrify processes to the greatest efficiency possible. Because that’s the whole question: finding where the efficiencies are great enough that projects make sense right now.
It’s a stepwise change. You electrify step by step, rather than tearing out entire systems and entire infrastructure and trying to replace everything at once.
The next call after that would be energy feasibility and understanding what the potential is. I’d reach out to my utility to understand what the constraints might be, to understand whether there might be incentives for electrification or for technology replacement, and what the challenges might be there. The goal is to understand those economics.
I’d reach out to industrial heat pump suppliers or component suppliers and other technology suppliers and get quotes from them. Then the next step after that is looking at state and federal financing opportunities to drive down the capital expense. You’ve identified the highest-efficiency opportunities in your facility, and then you can move towards actual design and implementation from there.
Susan Kish: Let’s say that you are an engineer at a site that is favorable for electrification. As you said, it’s no longer a question of physics. The technology is around. It’s a market question and it’s a systems question. What’s your first step?
Eric Masanet: I’ll put in a quick plug on what I think the next generation of engineers could really focus on to be helpful. I think there’s a huge gap between what engineers know and what policymakers know. The world needs more engineers that can do rigorous analysis, but translate that into actionable policy advice and make sense of the complexities of industry in a simple enough way that enables policymakers to act. And we don’t have enough engineers who focus on addressing that gap.
And join us in Detroit this June to discuss the electrification of industries and the industrial revolution now underway. See you at the CATALYZE Summit.
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