Electrifying China’s Industry: key to meet climate goals

As the world’s largest emitter of greenhouse gases (GHGs), accounting for over a quarter of annual emissions, China’s efforts to cut emissions are crucial for addressing climate change globally. While reducing emissions from China’s industrial sector may seem challenging, two promising solutions are heat pumps and thermal batteries.

Nearly three-quarters of China’s industrial emissions stem from supplying heat for processes like melting metals or molding plastics. New research by Lawrence Berkeley National Laboratory and Energy Innovation provides a roadmap for transitioning much of this industrial heat away from fossil fuels by leveraging clean electricity from renewable sources.

Currently, only about 10% of industrial heat globally is provided directly by electricity. Spearheading this transition can help China expand its domestic supply of electrified industrial technology. By lowering the carbon footprint of materials like steel and cement, China can ensure its domestic growth doesn’t worsen local air quality or accelerate dangerous climate change.

The report analysed the technological and economic feasibility of different technologies for providing industrial process heating, focusing on two emissions-free options when backed by renewable electricity: industrial heat pumps and thermal batteries.

Heat pumps can be the most cost-effective method for low-temperature heat and are extremely efficient, converting electricity into heat with over 100% efficiency. Industrial heat pumps, with temperatures up to 165°C, are ideal for producing food, paper, textiles, and similar goods.

Thermal batteries, on the other hand, can provide heat up to 1,700°C, covering more than two-thirds of China’s industrial heating needs. They not only convert electricity into heat efficiently but can also store it, losing as little as 1% per day. This allows them to smooth over the variability of renewable electricity sources and take advantage of lower electricity prices by banking grid electricity when it’s cheaper.

For temperatures below 100°C, industrial heat pumps were the second-cheapest option at $38 per megawatt-hour, competitive with combined heat and power technologies and much cheaper than natural gas and electric boilers. While coal-fired boilers were the cheapest in 2021, incorporating the likely 2030 cost of carbon made them fall behind heat pumps. At higher temperatures (100-165°C), industrial heat pumps cost $58/MWhth, while thermal batteries—capable of temperatures 10 times higher—were competitively priced at $46/MWhth.

Industrial heat pumps emit considerably less CO2 than most alternatives, 60% lower than equivalent coal-fired boilers. Once China achieves a decarbonized electricity grid, which is necessary to reach its carbon neutrality goals by 2050, electric technologies like heat pumps and thermal batteries will have zero emissions.

Smart policies, such as subsidising products made with clean energy, directly subsidizing clean energy use, reducing the cost of required electricity infrastructure upgrades, and implementing carbon pricing, can help make these electrical technologies more competitive with coal. Currently, China’s nationwide emissions trading system only covers power plants.