Industrial Electrification: Sizing Up The Challenge

The topic of industrial electrification is gaining traction as a key element in the transition towards a more sustainable and decarbonized industrial sector.

In this blog, we will share some insights, exploring the substantial potential and current obstacles of this critical shift.

Industrial Emissions

There is a pressing need to reduce carbon emissions in the industrial sector.

The International Energy Agency (IEA) revealed that the industry sector alone emitted 9 Gt of CO2eq in 2022, accounting for a quarter of global energy system emissions. This highlights the obvious gravity of the situation.

To align with the IEA's Net Zero Emissions by 2050 Scenario (NZE), a roadmap aiming for global energy sectors to achieve net zero CO2 emissions by 2050, industrial emissions must be lowered to around 7 Gt CO2eq by 2030.

Potential of Industrial Electrification

It is clear that electrification can play a major role in reducing industrial emissions.

Dr. Silvia Madeddu's research finds that with existing technologies, up to 78% of energy use in the industry could be electrified, as highlighted in the following graph:

Slow Progression of Electrification

Despite efforts to transition, the current industrial landscape shows a sluggish pace towards electrification.

The IEA graph below illustrates the (very) gradual shift, with fossil fuels continuing to dominate the energy mix of the industry sector.

Since 2010, the industrial sector's energy mix has seen little change, with the share of fossil fuels decreasing from 74% to around 65% by 2022. Notably, electricity's share has risen from 19% to 23%, mainly due to increased activity in light industries (FYI - the only industry segment scoring 'more efforts needed' in IEA's tracking report. Other segments score 'not on track').

Still, despite the small uptick in electricity's share, it falls short of the NZE Scenario targets. According to these targets, electricity shall climb to nearly 30% of industrial energy use by 2030.

Barriers to Electrification

What's causing this slow electrification pace?

Industrial electrification expert Jan Rosenow developed a great fishbone diagram to outline several barriers to industrial electrification.

He distinguishes the following categories:

• Economic, e.g. high capital costs
• Technological, e.g. limited suppliers of electrified equipment
• Infrastructure, e.g. grid connection wait times
• Knowledge, e.g. lack of awareness

These obstacles slow down the transition to a more electric-focused industry.

Pathways to Overcome Barriers

There are several pathways to overcome these barriers. Innovation and policy reforms can certainly play a big role as accelerators for industrial electrification.

• Further innovations in heat pump technology, storage, demand-side management etc. can improve the 'ROEI' (Return On Electrification Investment 🙂)
• Policy and market reform can incentivize the shift toward electrification, and reduce risks associated with new technologies

In our next webinar, we will further deep dive into the different potential breakthroughs that can drive the shirt towards industrial electrification. 

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