(36g) Whole-System Value Chain Optimisation for Decarbonising Industrial Heat

The IPCC’s Sixth Assessment Report [1] called on the world to halve global greenhouse gas emissions by 2030 and achieve net zero by 2050 in order to mitigate climate change. Meanwhile, around half of global emissions are covered by some form of net zero commitment. Thermal energy for industrial processes, often considered “hard to decarbonise”, contributes approximately one fifth of global greenhouse gas emissions and must be fully decarbonised as part of the transition to net zero.

A key challenge in decarbonising industrial heat is the wide range of temperatures used (spanning three orders of magnitude from tens to thousands of degrees Celsius) and the wide range of processes, from drying, to smelting, to promoting chemical reactions. Coal is the main fuel used currently in industrial heating, followed by natural gas and oil, all of which emit CO₂ during combustion. The low-carbon alternatives fall broadly in to four categories: 1) low carbon fuels such as hydrogen; 2) electrification of heat using renewable electricity; 3) low-carbon heat, e.g. solar and geothermal; and 4) carbon capture alongside storage and utilisation.

The suitability and cost-effectiveness of different options depends on the processes being decarbonised and the resources available. Comparison between technology options is often made using the levelised cost of heat: the average cost for each unit of heat produced over the technology’s lifetime. This includes capital costs such as equipment and installation, and operating costs such as fuel and maintenance costs and offers adequate comparison when comparing options at the plant level. However, when considered in the context of a larger energy system where all stakeholders are working towards net zero, there are competing interests, such as for land and fuel, and opportunities to reduce costs through sector coupling, such as using waste industrial heat to provide space and water heating in buildings. Furthermore, whilst focus is often placed on the generation of heat, transporting and storing it also presents challenges and opportunities for decarbonisation.

This study will use the Value Web Model [2] to develop minimum-cost scenarios for the decarbonisation of industrial heat in the UK. The Value Web Model is a mixed integer linear programming model of the British energy system that represents the complex interactions between the generation, transport, and storage of different energy vectors including electricity, hydrogen, and heat with detailed spatiotemporal resolution. The VWM can be used to optimise the design and operation of the energy system, including deciding when, how and in what form to generate, transport, and store energy. The model represents different stages of the value chain from the availability of natural resources such as wind and solar, to the energy demands of different stakeholders, including location, scale, temporal profile, and temperature of the UKs industrial heat demands. The scenarios developed by the model will be examined to identify the value chains with the potential to decarbonise industrial heating in the UK, whilst a sensitivity analysis will identify the factors that have the greatest impact on whole-system costs. The results will be discussed in terms of the impacts to different stakeholders of energy system and the current industrial decarbonisation policy in the UK to recommend areas for policy focus and further research.

References:

[1] IPCC. Sixth Assessment Report, April 2022. https://www.ipcc.ch/assessment-report/ar6/

[2] Samsatli, S. & Samsatli, N.J., 2018. A multi-objective MILP model for the design and operation of future integrated multi-vector energy networks capturing detailed spatio-temporal dependencies. Applied Energy, 220, 893-920. DOI: 10.1016/j.apenergy.2017.09.055.