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Electrification of industry viable now - Transpower

Electrification of industry viable now - Transpower

By Gavin Evans

July 30 (BusinessDesk) - Much of the country’s industrial process heat could be electrified with technology available now, national grid operator Transpower says.

Industrial heat pump technology can provide process heat up to 165 degrees Celsius and is expected to become increasingly commercially available, while technologies like radio-frequency heating, induction heating and electric furnaces are available for higher heat applications.

Government-owned Transpower says industrial heat pumps could cover a “major component” of the country’s process heat requirements, which collectively account for close to a quarter of New Zealand’s energy-related emissions.

It noted that high-heat applications – where temperatures of 300 degrees Celsius or more are required – account for only about 19 percent of process heat emissions. About 44 percent come from intermediate heat applications – from 100 to 300 degrees.

“Processes requiring very high temperatures, such as in steel manufacturing, may be much more challenging,” the government-owned national grid operator says in a just-published study of electrification of industrial heat. It follows the Interim Climate Change Committee's report earlier this month that recommended an "accelerated electrification" strategy as part of the government's response to climate change, with low to intermediate industrial heat conversion from fossil fuels to electricity one of the best opportunities.

“The good news is that 37 percent of carbon emissions from process heat are from low-temperature applications, which can be relatively easily substituted.”

The report is the latest study Transpower has undertaken to build on its 2018 Te Mauri Hiko paper, which modelled what it would take to convert New Zealand to a net-zero emissions economy by 2050.

That report found that large-scale electrification of industry and transport could meet that target, but would require generation capacity to roughly double to do so.

Transpower notes in its latest study that greater use of biomass is another option to reduce fossil-fuel use by industry, while some firms may also use gas as a transition from coal and other fuels.

It says that while electricity is currently three to five-times as expensive as gas on a per-gigajoule basis, it is much more competitive once carbon costs and the greater efficiency of new technologies are counted. Users also benefit from not having to handle fuel and manage storage.

Whereas up to half the energy from a centralised coal or gas-fired boiler might be wasted, heat pumps can deliver three to seven units of energy for every unit of electricity consumed, it says.

At the bottom of that range, and assuming a carbon cost of $50 a tonne, electricity and gas deliver heat at about the same cost at less than $15/GJ. At the top of the range, the electricity cost is about half that of gas. That estimate excludes capital costs. Carbon costs are currently about $23.50 a tonne.

Firms, universities, hospitals and prisons are already switching away from coal in favour of gas, wood-fired systems, electricity and combinations thereof, and are beginning to experiment with hydrogen as a feedstock.

But there are no piped gas supplies on the South Island and in many parts of the country there are insufficient established forestry waste supplies to yet deliver sufficient fuel. Many plants are also long distances from high-voltage transmission systems.

Fonterra is converting its coal-fired Stirling cheese plant near Balclutha to run on electricity, but recently estimated that running one of its milk powder driers at Darfield on wood would require 50-60,000 tonnes of fuel a year.

Transpower acknowledged that electrifying many process heat sites would be challenging due to their remoteness and energy intensity.

In some cases, large plants like dairy factories could be supplied from the 220-kilovolt transmission grid backbone as a more efficient alternative to upgrading existing regional 110-kV or 66-kV distribution systems, it said.

“In other cases, the economics of electrifying plant in its existing location may – in conjunction with other commercial drivers – make it more economic to relocate to a greenfield site with optimised plant closer to transmission assets and other infrastructure.”

Transpower said that many existing distribution networks have significant capacity that can be used but continuing growth will also require further investment. The challenge for networks is to estimate increasing demand to investigate if, what and when investment would be required.

Early communication is also important. Transpower said it has already had discussions with potential customers for industrial sites as large as 50-to-80 megawatts and their load could be incorporated with relatively straightforward upgrades.

But if a new transmission line was required, that could take seven or more years if resource consents are required.

Transpower said a risk for distribution networks is that growth would likely occur in stages. There is a risk that large plants may initially connect to their local networks, only to want a direct transmission connection further down the track.

“These challenges require the transmission and distribution operators to take a holistic approach to transmission planning for a region, working closely not only with the local distribution company, but also with customers with significant current and/or potential electricity loads.

“The thinking and conversations around process heat electrification need to be occurring now.”

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