The International Energy Agency (IEA) predicts the future will be electric and mostly renewable.
For large industrial users of energy this brings both challenges and opportunity. Flexibility of energy use will become key, however.
The IEA state that to meet CO² reduction targets by 2050, global industrial process heat will need to be electrified.
Process heat represents 74% of industrial energy demand worldwide, of which only 10% is electrified, leaving some 76.5 EJ of energy to come from mainly the direct burning of fossil fuels (see figure 1). This amount of energy is staggering on any scale, it's the equivalent 21.25 million Gigawatt hours. To put that in perspective that's around 100 times Australia’s current total annual electricity generation.
This new demand for electricity will see the required global generation grow to around five times what we generate today.
So where is all this new electricity going to come from?
It's going to come from clean renewable energy sources (with some gas transition), and this is going to happen for four reasons:
So, if the IEA is right and the future is electric and mostly renewable, what does this mean for large industrial users, both those in the grid today, and those seeking to enter.
As CO² emissions from other sources decline, industry’s relative share of total emissions increases, as it progressively becomes the primary source of CO2 emissions by 2050. Source: Solar Payback (2017), based on IEA statistics and calculations by IRENA.