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February 22, 2022Energy inputs In 2050
The chemicals, fuels, and materials industries are undergoing a fundamentally energy transition to become carbon neutral by 2050. The major inputs for the process industries – carbon sources, minerals, energy, and inorganic chemicals – will all have to fundamentally change to accommodate this goal. What kind of transformation this implies is a major question, and as the world’s leading consultancy for sustainability in the process industries NexantECA is working hard on researching the shape of the future.
One of the baseline requirements of decarbonization for global industries is that most process energy needs must eventually be fulfilled with low carbon sources of energy, either through using non-fossil fuels directly, with electricity generated from non-fossil resources, or through sequestration of fossil carbon. The good news is that unlike material inputs, energy sources can often be changed without fundamentally changing processes. The bad news is that the task is colossal; the US Department of Energy estimated in 2010 that the manufacturing sector of the US derived only about 23 percent of process energy from electricity.
While some process plants and facilities may continue to use their current equipment with drop-in fuels such as biomethane, the supply of these fuels is fundamentally limited by the availability of specific energy resources. Certainly, to give one example, biomethane resources are too limited to fully displace current fossil-based natural gas uses, let alone all other fuel inputs into processing. Some process needs, notably machine drives and prime movers, are largely electrified and can thus need only participate in the ongoing transformation of the electricity sector. However, virtually all other process needs use fossil-based energy inputs either directly through fuels or indirectly through generated steam. Consequently, most energy requirements currently fulfilled by conventional sources will need to be retrofitted or replaced over time by electrification or by sequestration.
What will the cost of steam and process heat be in 2050? Today, the industry largely benchmarks these factors based on the heating value of methane – the default fuel gas. Methane has the advantage of producing steam or process heat for about the same cost in a wide variety of equipment types. However, in 2050 methane use is likely to be heavily constrained by carbon dioxide emissions limitations. With existing renewable sources of methane such as biomethane limited by availability, new processes - and pricing benchmarks - will inevitably arise.
What is certainly clear about the landscape of 2050 is that unlike today, there will be a large diversity of sources of process heat with associated differing capital and operating cost requirements. While biomethane and relict uses of fossil methane might be limited, they will still occupy an important place in future process energy sources. A potential solution with lower capital outlay for existing facilities might be synthetic methane or syngas derived from biomass or waste feedstocks. A higher capital outlay option might be to install carbon capture and sequestration equipment for fossil methane. And of course, there is always the option to retrofit existing boilers and fired heaters to use electricity.
The benchmark price of process energy in the future will ultimately depend on the economic competitiveness of the various options. Determining what this might be includes:
- How much capital investment is required to reach carbon neutrality by 2050?
- What does this mean for future pricing?
- What are the expected high costs of production and the matching of future supply and demand market scenarios?
Answering these questions requires a clear view not only of the most competitive technologies based on rigorous techno-economic analysis. NexantECA is continually investigating these questions and many more to support the chemicals, fuels, and materials industries’ march to net zero.
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The Author
Joshua C. Velson, Consultant
About Us - NexantECA, the Energy and Chemicals Advisory company is the leading advisor to the energy, refining, and chemical industries. Our clientele ranges from major oil and chemical companies, governments, investors, and financial institutions to regulators, development agencies, and law firms. Using a combination of business and technical expertise, with deep and broad understanding of markets, technologies and economics, NexantECA provides solutions that our clients have relied upon for over 50 years.
