Faster decarbonization of heavy industries in low-carbon power grids: Using process flexibility for handling grid congestions

Abstract

Industrial decarbonization requires substantial electricity and grid infrastructure. Policies are developed and significant funds are being directed to decarbonize electricity generation and incentivize investments in renewable energy. Expansion of the transmission grid, however, is lagging. Even though grid capacity limits may be critical only for a few hours annually, industries ready to make large energy-intensive decarbonization investments may be refused grid connection due to security-of-supply requirements. We demonstrate that industrial flexibility can alleviate grid congestions and increase grid reliability. In low CO2-intensity power grids, this can increase the pace of decarbonization of heavy industries via electrification. By aligning industrial processes with grid load, peak demand can be reduced, facilitating faster sector decarbonization. Our study presents a bottom-up model of the demand-side flexibility of energy intensive processes in heavy industries (chemicals, cement and metals). Applying this to a Norwegian industry region, combined with power flow analysis, the flexibility reduces strain on transmission grids during peak demand, reducing grid overload hours by 90 %. Activating industrial flexibility incurs significant operational costs, primarily determined by the most stringent processes. We estimate a unit cost of 111-210 €/MWh for flexibility of the industry sectors considered, comparable to other grid reinforcement alternatives but with significantly reduced time for realization. In the investigated transmission grid, 339 MW of new electrification measures can be accommodated, allowing for decarbonization measures representing 16 % of the annual CO2-emissions of the industries. Our findings emphasize the importance of encouraging more flexible processes in heavy industries to accelerate decarbonization by electrification in low-emission power grids.

Faster decarbonization of heavy industries in low-carbon power grids: Using process flexibility for handling grid congestions