Electrification of the basic materials industry – Implications for the electricity system
Doctoral thesis, 2023
The European energy-intensive basic materials industry must achieve deep reductions in CO2 emissions to meet the targets set out in the Paris Agreement. The rapid decline in the cost of renewable electricity makes expanded electrification an attractive option for eliminating the dependence of the industry on fossil fuels.
This work applies techno-economic optimisation modelling to investigate how electrification of the basic material intensive industry in EU can interact with the electricity system. In particular, this work examines the ability of basic material industry to take advantage of flexibility options in the production processes to avoid high-cost electricity and facilitate the integration of wind and solar power. The thesis considers flexibility options which can meet an uneven distribution of electricity in time and space, including options to invest in overcapacity in electrolysers for hydrogen production and storage (flexibility in time) and the ability to export commodities (flexibility in location) for the industries included (ammonia, cement, plastics, and steel). For the electrified process of plastics production, flexibility in terms of CO2 utilisation is used to describe the ability of industrial units to vary their CO2 utilisation modes, i.e., through carbon capture and utilisation and carbon capture and storage.
The modelling results show that an energy-intensive basic materials industry that has flexibility in relation to time, location, and CO2 utilisation provides lower production costs compared to a non-flexible industry. This is despite the lower capacity utilisation rate (60%) of the electrolysers used for hydrogen production, i.e., it is cost-efficient with investment in over-capacity in electrolysers.
The modelling results also show that availability of low-cost electricity generation is the main determining parameter for geographical location of new industries with high operational flexibility and high hydrogen intensity (in this work presented by ammonia industry). With present-day locations of the industry, a hydrogen pipelines network allows for moving the electrolyser capacity from industry-intensive regions to regions with access to low-cost electricity which reduces hydrogen production costs by 3%. With the modelled optimal geographical location of new industries, hydrogen production is in the same region as the hydrogen-consuming units and, thus, a hydrogen pipeline has no significant impact on the hydrogen production cost.
It was found that the electrification of the energy-intensive basic materials industry in the EU increases the electricity demand by around 44% (by 1,200 TWh). The future EU electricity demand with the present-day locations of the industrial plants is primarily met by solar, wind and nuclear power. If changes in annual production volumes and relocation of industries are allowed, more commodities are produced in regions that have both existing industries and access to low-cost electricity, thereby increasing the levels of electricity generation from wind and solar power. All the modelled scenarios require a substantial and rapid increases in renewable electricity capacity.
This work applies techno-economic optimisation modelling to investigate how electrification of the basic material intensive industry in EU can interact with the electricity system. In particular, this work examines the ability of basic material industry to take advantage of flexibility options in the production processes to avoid high-cost electricity and facilitate the integration of wind and solar power. The thesis considers flexibility options which can meet an uneven distribution of electricity in time and space, including options to invest in overcapacity in electrolysers for hydrogen production and storage (flexibility in time) and the ability to export commodities (flexibility in location) for the industries included (ammonia, cement, plastics, and steel). For the electrified process of plastics production, flexibility in terms of CO2 utilisation is used to describe the ability of industrial units to vary their CO2 utilisation modes, i.e., through carbon capture and utilisation and carbon capture and storage.
The modelling results show that an energy-intensive basic materials industry that has flexibility in relation to time, location, and CO2 utilisation provides lower production costs compared to a non-flexible industry. This is despite the lower capacity utilisation rate (60%) of the electrolysers used for hydrogen production, i.e., it is cost-efficient with investment in over-capacity in electrolysers.
The modelling results also show that availability of low-cost electricity generation is the main determining parameter for geographical location of new industries with high operational flexibility and high hydrogen intensity (in this work presented by ammonia industry). With present-day locations of the industry, a hydrogen pipelines network allows for moving the electrolyser capacity from industry-intensive regions to regions with access to low-cost electricity which reduces hydrogen production costs by 3%. With the modelled optimal geographical location of new industries, hydrogen production is in the same region as the hydrogen-consuming units and, thus, a hydrogen pipeline has no significant impact on the hydrogen production cost.
It was found that the electrification of the energy-intensive basic materials industry in the EU increases the electricity demand by around 44% (by 1,200 TWh). The future EU electricity demand with the present-day locations of the industrial plants is primarily met by solar, wind and nuclear power. If changes in annual production volumes and relocation of industries are allowed, more commodities are produced in regions that have both existing industries and access to low-cost electricity, thereby increasing the levels of electricity generation from wind and solar power. All the modelled scenarios require a substantial and rapid increases in renewable electricity capacity.
flexibility
storage
electricity systems modeling
hydrogen
circular economy
renewables
industry
electrification
Hörsal HC3, Hörsalsvägen 16
Opponent: Prof. Anna Krook-Riekkola, Luleå University of Technology, Luleå, Sweden
Author
Alla Toktarova
Chalmers, Space, Earth and Environment, Energy Technology
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Interaction between electrified steel production and the north European electricity system
Applied Energy,;Vol. 310(2022)
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Thermochemical recycling of plastics – Modeling the implications for the electricity system
Journal of Cleaner Production,;Vol. 374(2022)
Journal article
Electrification of the energy-intensive basic materials industry – Implications for the European electricity system
International Journal of Hydrogen Energy,;Vol. In Press(2024)
Journal article
Silver bullet or not, electrification of the industry is going to be part of the carbon-neutral future.
The basic materials industry is embedded in many strategic value chains and accounts for 15% of the EU’s carbon dioxide emissions. In Europe, industrial facilities will need to be replaced or undergo large re-investment in the next 15 years. Therefore, understanding feasible low-carbon options for the basic materials industry is of utmost importance to avoid a development that would further lock-in into emission-intensive infrastructures. Renewable energy technologies, mainly solar photovoltaics (PV) and wind turbines, have achieved rapid technological progress during the last decade, resulting in a substantial decrease in costs and increased cost-competitiveness relative to both fossil fuels and nuclear power.
Electrification of the industry is gaining momentum, as seen in both research and industrial development projects. The electrification of the industry can significantly change the cost structures for industrial production and, thereby, the most cost-effective geographical locations for new production sites may also change.
This thesis investigates the electrification of the basic materials industry using techno-economic optimization models. These models allow for studying the relationship between the electrification of the energy-intensive basic materials industry and the electricity generation system. Specifically, this work evaluates the ability of the basic material industry to take advantage of flexibility options in the production processes to avoid high-cost electricity and facilitate the integration of wind and solar power.
This work shows that for electrified industry, low costs for hydrogen and electricity can be achieved by avoiding high electricity price hours through operational flexibility of the industrial capacity, in conjunction with the storage of hydrogen and commodities.
The modelling results also show that availability of low-cost electricity generation is the main determining parameter for geographical location of new industries with high operational flexibility and high hydrogen intensity (in this work presented by ammonia industry). With present-day locations of the industry, a hydrogen pipelines network allows for moving the electrolyser capacity from industry-intensive regions to regions with access to low-cost electricity.
Finally, it was found that the electrification of the energy-intensive basic materials industry in the EU increases the electricity demand by around 44% (by 1,200 TWh). The future EU electricity demand with the present-day locations of the industrial plants is primarily met by solar, wind, and nuclear power.
The basic materials industry is embedded in many strategic value chains and accounts for 15% of the EU’s carbon dioxide emissions. In Europe, industrial facilities will need to be replaced or undergo large re-investment in the next 15 years. Therefore, understanding feasible low-carbon options for the basic materials industry is of utmost importance to avoid a development that would further lock-in into emission-intensive infrastructures. Renewable energy technologies, mainly solar photovoltaics (PV) and wind turbines, have achieved rapid technological progress during the last decade, resulting in a substantial decrease in costs and increased cost-competitiveness relative to both fossil fuels and nuclear power.
Electrification of the industry is gaining momentum, as seen in both research and industrial development projects. The electrification of the industry can significantly change the cost structures for industrial production and, thereby, the most cost-effective geographical locations for new production sites may also change.
This thesis investigates the electrification of the basic materials industry using techno-economic optimization models. These models allow for studying the relationship between the electrification of the energy-intensive basic materials industry and the electricity generation system. Specifically, this work evaluates the ability of the basic material industry to take advantage of flexibility options in the production processes to avoid high-cost electricity and facilitate the integration of wind and solar power.
This work shows that for electrified industry, low costs for hydrogen and electricity can be achieved by avoiding high electricity price hours through operational flexibility of the industrial capacity, in conjunction with the storage of hydrogen and commodities.
The modelling results also show that availability of low-cost electricity generation is the main determining parameter for geographical location of new industries with high operational flexibility and high hydrogen intensity (in this work presented by ammonia industry). With present-day locations of the industry, a hydrogen pipelines network allows for moving the electrolyser capacity from industry-intensive regions to regions with access to low-cost electricity.
Finally, it was found that the electrification of the energy-intensive basic materials industry in the EU increases the electricity demand by around 44% (by 1,200 TWh). The future EU electricity demand with the present-day locations of the industrial plants is primarily met by solar, wind, and nuclear power.
Mistra Carbon Exit
The Swedish Foundation for Strategic Environmental Research (Mistra), 2017-04-01 -- 2021-04-01.
MISTRA Carbon Exit Phase 2
The Swedish Foundation for Strategic Environmental Research (Mistra) (MISTRACarbonExitPhase2), 2021-07-01 -- 2025-03-31.
Driving Forces
Sustainable development
Areas of Advance
Energy
Subject Categories
Energy Systems
ISBN
978-91-7905-824-1
Doktorsavhandlingar vid Chalmers tekniska högskola. Ny serie: nr 5290
Publisher
Chalmers
Hörsal HC3, Hörsalsvägen 16
Opponent: Prof. Anna Krook-Riekkola, Luleå University of Technology, Luleå, Sweden