Key Takeaways

  • Off-grid renewable energy systems could economically meet one-third of U.S. industrial heat demand by 2035, according to a paper by researchers at the University of California, Berkeley, published earlier this year.
  • The paper, which has not yet been peer-reviewed, assessed the cost of heat supply across low-, medium-, and high-temperature ranges, using site-specific data to calculate renewable energy potential at more than 3,000 industrial sites nationwide. The Berkeley analysis found that combining on-site wind and solar with industrial heat pumps and thermal energy storage is economically viable, especially in regions with high natural gas prices and low renewable energy costs, such as California and parts of the Northeast.
  • One of the report's co-authors, José Domínguez, a research manager at the university, told Utility Dive that the findings are promising for manufacturers that rely heavily on natural gas and face price volatility. "These technologies are a way to control costs and predictability," he said.

Deep Dive

The report focuses on the economics of decarbonizing the industrial sector, which accounts for a significant share of U.S. greenhouse gas emissions and which the Biden administration has noted is particularly difficult to transition away from fossil fuels.

But Domínguez said clean energy technologies have made significant progress in recent years. "A few years ago, they weren't cost-effective," he said, "but even now that they are economically viable, they require planning and development."

The report found that for low-temperature industrial processes below 200 degrees Celsius, heat pumps are the "most cost-effective clean solution," while for high-temperature processes, thermal batteries offer "competitive or lower costs." "In many cases, electric heating solutions are already cost-competitive with fossil fuel alternatives, and as renewable energy costs continue to decline, their economic advantage is expected to grow," the report said.

The report identified several challenges to widespread adoption of renewable industrial heat, including reliability concerns for users requiring uninterrupted energy supply, investment and time considerations, and space constraints. It noted that about 27% of total heat demand is concentrated in facilities lacking sufficient local renewable energy potential, particularly in urban areas.

Nevertheless, Domínguez said he was surprised by how many industrial sites in the U.S. have the potential to add renewable energy generation. "Some industries are not aware of these technologies," he said, "developers need to reach out to industries and showcase new alternatives."