Move from gas to electric low temperature heating systems

The HVAC industry accounts for around 22% of annual global energy-related carbon dioxide emissions, producing approximately 7.8 gigatonnes of CO2 emissions per year – with renewable energy sources contributing around 11% of the heat generation capabilities (1).

Industrial heat demand by temperature type divides as follows – low temperature (below 100°C), at 15% medium temperature (100 to 400°C) at 30% and high temperature (above 400°C) at 55%. Net Zero Scenario (by International Energy Agency) requires renewable heat consumption in industry to expand by double by 2030 from 2020 capacity levels of 11 EJ to 22 EJ (2). Renewable heat generation capacity must be doubled over the next decade to meet growing industry demand.

The electrification of low temperature heating systems enables industry players to leverage the decreasing cost of electric equipment, allowing companies to comply with ever more rigorous greenhouse gas (GHG) emission regulations. As of 2017, fuel consumption for energy production accounted for around 45% of energy consumption, including processes such as drying, melting, and cracking.

Electrifying low temperature heating processes (e.g. washing, rinsing, and food preparation) offers higher process energy efficiency, lower investment cost for infrastructure (in low- and medium- temperature applications) and lower maintenance costs. If industry players use zero-carbon electricity, the GHG emissions of operations lower significantly.

Image: Industrial energy consumption

Source: McKinsey. Plugging in: What electrification can do for industry

Switch from gas (or other) energy sources to electricity can be achieved by changing industrial process set ups, but financial feasibility of electric low temperature heating systems is heavily reliant on differences between cost of energy to run electric equipment and conventional fuel usage (e.g. natural gas).

As of 2020, electricity in most locations was more expensive per joule than conventional energy or heat sources. For buildings and transport sector electric equipment efficiency enables life cycle savings on energy costs, making up for the relatively higher costs of equipment and higher per joule price of electricity.

The synergy of renewable sources for electricity generation in country power generation mixes together with the electrification of heat generation systems in industrial processes, allows industry players to lower their operational costs and greenhouse gas emissions.

The following implementation options are typically considered by companies aiming to adopt electrified low temperature heating systems:

• Electric boilers for heat generation up to 350°C

• Electric heat pumps for low- and medium- temperature heat demand

• Electrically powered vapor compression (MVR) equipment for evaporation

Image: Low electricity prices, or a signicant CO price, increase the nancial attractiveness of electrication

Source: McKinsey. Plugging in: What electrification can do for industry

Climate impact

Targeted emissions sources

Electric low temperature heating systems usage for industrial processes targets carbon dioxide emissions on Scope 1, Scope 2, and Scope 3 with a focus on:

• Category 1 (Purchased goods and services)

• Category 3 (Fuel- and energy-related activities not included in Scope 1 or Scope 2)

• Category 10 (Processing of sold products)

• Category 12 (End-of-life treatment of sold products)

Decarbonization impact

Electric low temperature heating systems enable industry players to lower process energy usage, due to higher energy efficiency of equipment.

Dependent on country of use power generation mix, operational carbon dioxide emissions can be reduced by up to 90% (where share of renewables is high) or increased (in regions heavily reliant on coal-based electricity generation).

The installation of electric heating systems infrastructure can lower Scope 3 upstream CO2 emissions, as electrified industrial processes demonstrate less complexity than other solutions (e.g. natural gas heating). Exact estimates are challenging, as the baseline for low temperature heating infrastructure differs between regions and industry players.

End-of-life carbon dioxide emissions tend to vary, dependent on the recycling potential of the installation, while it is hard to predict component end-of-life value.

Business impact

Benefits

Low operating or maintenance cost, reasonable infrastructure investment costs, higher energy efficiency, possibility to reduce greenhouse-gas (GHG) emissions, increased employee safety, low infrastructure complexity, low operating noise.

Costs

• Impact on operating costs

Operational costs through use of electric low temperature heating systems can be lower, due to higher equipment energy efficiency (compared to current levels). Although the energy cost of electric solutions per kWh is two to five times higher than other energy sources (e.g. natural gas or coal).

• Investment required

Initial investments for electric low temperature heating systems are hard to estimate. Industry players must assess the cost of installation on a case-by-case basis, as investment profitability depends on the processes used for operations.

• Eventual subsidies used

Regional and country-specific subsidies or financing options may apply based on location of use.

Indicative abatement cost

Abatement cost for electric low temperature heating systems (dependent on technology currently in use):

• 80 to $US140/tCO2e (2022)

Impact beyond climate and business

Co-benefits

Local lower carbon dioxide emissions, increased air quality in industry zones, lower local noise levels.

Potential side-effects

Possibility of increased total carbon dioxide emissions (depending on the available regional power generation mix).

Typical business profile

All industry clients in most industries and sectors interested in electrification of low temperature heating systems for processes under 100°C (e.g. washing, rinsing, and food preparation).

Approach

Electric low temperature heating systems investment and operational costs should be assessed on case-by-case basis with relevant specialists and professionals. The use of electric low temperature heating might require process infrastructure renovation or change.

Key parameters to consider

• Solution maturity: developing, scaling within highly developed regions

• Lifetime: 10-30 years

• Technical constraints or pre-requisites: initial cost of installation, electricity (or energy source) cost

• Additional specificities (e.g., geographical, sector or regulation): regional power generation mix/share of renewables

Implementation and operations tips

The electrification of industrial processes is an enabler for wide scale industrial decarbonization opportunities. The adoption of electric low temperature heating systems should be recognized on a case-by-case basis for individual infrastructures. Electric solutions offer increased efficiency, the potential to reduce carbon dioxide emissions (based on the share of renewables in electricity generation), however, investment and operational profitability should be analyzed.