Industry accounts for a third of all global energy usage, driven mostly by energy-intensive processes that rely heavily on fossil fuels. This path, as we know, is unsustainable. In 2024, increasingly pressing climate goals, regulations, economic difficulties, and volatile energy prices and supplies, continue to demand industry change.
Credit: Schneider Electric
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Aerial view of large-scale solar power plants at sunset, with chemical plants in the distance
Now, as we build a more digital and electric world in the age of Electricity 4.0, this offers a myriad of opportunities for industrial growth, whilst simultaneously securing a sustainable future of our planet and its people. Yet, as my colleague Frédéric Godemel has pointed out, over three quarters of the industrial sector's energy use is still not electrified, with only a tiny proportion of oil refineries’ energy use being electrical.
We’re at a frontier in 2024. Technology, the economy, and environmental urgency are making the strongest case for industrial electrification ever. The good news is that managing energy demand through electrification and digitization in industries like oil refining, steel, glass, chemicals and petrochemicals, and food & beverage is one of the best and fastest ways to start unlocking lasting benefits.
Here’s why and how industry leaders should electrify now.
What are the benefits of industrial electrification? And why now?
While electricity and transport sectors decarbonize, industrial emissions are set to increase in the coming years, according to Rhodium Group. When it comes to the cost of energy, the steady increase in emissions from the industrial sector, and the impact of energy disruption on profit margins, the drive for sustainability and energy sovereignty becomes ever clearer.
Industry is currently on an alarming trajectory to consume more fossil fuels than power generation by 2050. The best way to avert this grim scenario is to electrify industrial processes and assets now. This change immediately cuts down direct emissions. This paves the way for increased renewable power and microgrid implementation, reducing carbon footprint and ensuring that sites are compliant with sustainability and environmental regulations. Industrial electrification also enables far superior energy management, hugely boosted efficiency, and automation, helping industry leaders reap the extensive benefits from this transformation. Finally, generating power onsite and investing in efficiency can spark major cost reductions, increase sovereignty, and enhance safety.
Electrification requires preparation. Internal stakeholders but also grid suppliers, regulators, and even product manufacturers will all play a major role. To reach decarbonization targets industry will set, it’s important that stakeholders commit to assessing the required time and identifying the feasibility and investment.
The time for industrial electrification is now. It is an opportune moment for organizations to electrify and digitalize and gain an advantage over competitors, rather than scrambling to do so later when climate goals are even more urgent.
Is industrial electrification really powerful enough?
Only few technologies cannot be electrified today, mainly limited to thermal heating when the temperature is higher than 1000 degrees Celsius. Numerous industrial companies, including heavy industries are progressing into transformation.
A significant example in UK, is Tata Steel, the country’s largest steel producer, that is transforming its blast furnace to an Electrical Arc Furnace (EAF) in their path to carbon neutrality by 2045. The new EAF will have a capacity of 3 million mt/year with a carbon emission intensity of around 0.4 mt CO2/mt of crude steel and it will use local scrap. Tata Steel is an outstanding example of innovation in heavy or large-scale capacity that is under development now.
No industry is too traditional or complex to benefit from electrification. Beyond the widespread use cases for heating and motion, we’re seeing breakthroughs in industries as broad as leisure parks: with state-mandated goals to slash greenhouse gas emissions by almost 90%, one park partnered with Schneider Electric to identify where its existing technologies used natural gas, and where electrification would be feasible. The resulting electrification roadmap and its implementation produced points to a clear route to meeting this tough target by 2030 and set in place better decision-making processes for achieving this with ease.
Replace, reduce, electrify today
When creating an electrification strategy, industrial leaders must look to replace, reduce, and electrify. This means first replacing fossil fuels with renewables at scale, with programs such as Schneider Electric’s Materialize accelerating the adoption of these energy sources in the mining industry. This first-of-its-kind program facilitates industry-wide collaboration to make mining and metals operations more sustainable, combining energy purchasing power across the entire value chain.
Next, industrial leaders must look to reduce waste, both in terms of energy and materials. Green Steel projects do both: recycled steel is reprocessed through heat-powered processes that use electricity rather than gas and allow materials to be used again – a sustainability win-win.
Finally, leaders must look to electrify processes. Not all processes are easy to electrify, but by focusing time and resources on where rapid, high-impact changes can be made, industrial leaders can enact sustainable, reliable change. A direct (electric) hardening process could be faster than a conventional indirect heating. One ceramic tile manufacturer in Spain saved three quarters of final energy use and reduced processing time from four hours to one by switching to induction heating. Electric heating also reduces material losses, especially for direct heating such as induction or microwave. Or take transitioning from gas turbine compressors and gas engine water pumps to electrically powered equipment as an example. A Brazilian floating production storage and offloading (FPSO) company successfully decreased its annual carbon emissions by roughly 100k tCO2e by reconfiguring its operations in this way. Process electrification also leads to a reduction in capital and operational expenditures, and a much greater level of efficiency, reliability, and availability of the entire system.
The key to unlocking the power of electrification
Ultimately, the successful electrification of industry relies on working with trusted, credible partners. When industrial leaders work with experts to effectively build and execute electrification strategies, they can achieve great results. From individual electrification scenarios of industrial heating processes to comprehensive energy management systems (EMS), masters in the know can apply their expertise to ensure electrification is a success. A well-designed electrification roadmap will include and leverage synergies between electrification of the processes, fleet, generating or storing energy and link to the grid. And at the time of implementation, it will take into account the comprehensive picture, uncovering hidden potential and impacts, to balance sustainability and business success. All the while pacing the progress and scaling it to meet the specific project’s requirements.
For instance, guidance weaving artificial intelligence into the EMS enables businesses to execute complex decisions autonomously, resulting in optimal profit and carbon intensity while minimizing downtime. Working with industry experts also opens opportunities to transform traditional fossil-fueled furnaces. A switch to hybrid furnaces provides the flexibility to switch from full electric to partial electric, utilizing fuel combustion only when necessary, while electric furnaces can even outperform fired heaters. With experts to guide industrial leaders through the process, they can take advantage of higher heat flux, faster ramp-up, better controllability, and reduced coking thanks to the intelligent combination of advanced process control and machine learning. With the technology behind these solutions maturing at pace, precise control and optimization strategies for electrified reactors are only possible with expert advice and innovation.
We are at a crucial point in the climate fight and no sector is safe from scrutiny. When industrial leaders look to replace, reduce, and electrify as a core part of their operational strategy, the economic and sustainability benefits are clear. The time to act is now — and with expert partners guiding the way, our industrial futures can be bright - and green.