Electrifying Industrial Heating in China

The industrial sector in China accounts for roughly 65% of China’s total primary energy use and 70% of its energy-related CO2 emissions. As emissions from electricity generation decline, addressing thermal energy needs in the industrial sector, especially for process heating, will become a critical challenge in the pursuit of deep decarbonization of industry.Heat represents two-thirds of all energy demand in the industrial sector, yet very little of this demand is met with renewable energy sources. A significant opportunity lies in decarbonizing the industrial sector by transitioning heat production away from carbon-intensive fossil fuels and towards cleaner alternatives such as electrification, where low- or zero-carbon electricityis utilized.
In this report, we analyze the electrification potential for 14 industries in China (aluminum, container glass, ammonia, recycled plastic, beer, beet sugar, milk powder, wet corn milling, soybean oil, meat, steel, steel reheating, ethanol, and pulp and paper). We also analyzed the energy and CO2 emissions impacts of electrification of boilers in Chinese industrial subsectors over time.The report identifies specific processes that could be electrified in the near term with commercially available technologies and analyzes the expected changes in energy use, CO2 emissions, and energy costs. Understanding which conventional processes could be electrified and how this impacts emissions and costs can help industrial facilities identify which of their processes may be suitable candidates for electrification. In addition, understanding the potential growth in industrial energy demand that will result from electrification can help utilities, grid operators, and electricity generators plan for these changes and ensureequipment and generation resources are available to meet the growing demand for renewable electricity. Table ES1 shows the change in CO2 emissions after electrification of certain processes in those industries (assuming a 100 percent adoption rate, except for the steel industry). Negative values imply reduction in emissions. The baseline scenario assumes a net zero grid is achieved by 2060 according to China’s current commitments under the Paris Agreement, whereas in the ambitious scenario, it is assumed that facilities will be able to procure renewable electricity for one third of their electricity needs in 2030, half by 2040, and all by 2050. In Table ES1, the 14 industries studied are listed in order from 1-14 based on estimated CO2 emissions in 2050 (greatest to least), with columns describing the change in net CO2 emissions after electrification in the baseline and ambitious scenarios across the study period. Plastic recycling, steel reheating processes, steel production, and the ammonia industry are the top four industries in terms of CO2 emissions reduction potential fromelectrification.