Implement thermal energy storage to decarbonize industry

Industry accounts for 25% of total CO₂ emissions from energy systems, with process heat making up nearly two-thirds of industrial energy demand. Today, more than 80% of this heat still comes from fossil fuels, making its decarbonization essential for achieving net-zero emissions. Fortunately, various renewable heating solutions, such as heat pumps, solar thermal, and thermal energy storage, are already commercially available

Unfortunately, there are currently only a handful of industrial TES projects operational worldwide. Nevertheless, TES has broad industrial applicability due to its ability to supply high-temperature heat (already up to 600°C) while maintaining a small footprint. It is estimated that this technology alone could replace up to 40% of global gas use in industry today and avoid up to 14% of global projected energy-related greenhouse gas emissions by 2050.[1]

Thermal energy storage (TES) solutions work by heating a storage medium – such as water, molten salts or solid materials – using energy from renewable or non-renewable sources and storing the resulting thermal energy for later use. They are particularly effective when used in combination with renewable energy as they can capture it when it is less expensive and abundant and release it when it is scarce and expensive. TES solutions can be charged directly by heat, generated for example by a concentrated solar thermal plant (heat-to-heat), or by electricity using resistive heating (power-to-heat).

Figure 1: Simplified schema of thermal energy storage use in industry

Depending on how they store heat, TES solutions have three categories – sensible, latent, and thermochemical.

• Sensible TES solutions increase the temperature of a solid or liquid material insulated from the surroundings. For example, thermal concrete is heated to the desired temperature, stores the heat, and releases it when needed by an industrial process.

• Latent TES solutions make use of the phase change of materials (when a material changes from one state of matter to a different one, such as the vaporization of liquids or the melting of metals) to store energy.

• Thermochemical TES solutions rely on chemical reactions that absorb heat during charging and release the stored heat when reversed.

More use cases available in the WBCSD’s Renewable industrial heat navigator brief: Thermal energy storage.

Sustainability impact

Climate

TES can cover 100% of the industrial heat demand, thus completely eliminating emissions from industrial process heat if renewable energy is used for charging. Additionally, even if electricity from the grid is utilized, the charging times typically align with periods of high renewable electricity generation. This means that the carbon intensity of the electricity used is usually much lower than average grid carbon intensity.

The lifecycle emissions of TES vary depending on the solution and technology used. However, they are generally significantly lower per MWh than in case of Li-ion batteries.

Therefore, typical emissions reduction is 200-400 kg CO2-eq per MWh of heat supplied by the TES.

Nature

TES have limited land footprint and can be installed into existing industrial sites, not needing additional land.

Social

TES eliminates local air pollution (NOx and other harmful emissions) associated with conventional combustion of fossil fuels.

Business impact

Benefits

• The advantages of TES solutions compared to conventional heat generation and even other renewable heating solutions, such as heat pumps or solar thermal, are:

• They provide on-demand or continuous heat, while complementing renewable heat and electricity generation by making use of it when it is abundant and inexpensive.

• They can offer flexibility services to the electricity grid, providing an additional revenue stream.

• They have a limited land footprint (2-4m2/MWh) fitting into existing industrial sites.

• They can supply heat at a wide range of temperatures (already up to 600°C) and can be connected to existing steam networks.

• They can be combined with a steam turbine to generate both heat and electricity, depending on the industrial process requirements and the local electricity market design.

* Unlike other renewable heating solutions, where CapEx is based on the system's output capacity (measured in kW), the CapEx of TES depends primarily on the amount of energy it can store (measured in kWh).

Typical business profile

Thermal energy storage solutions are currently best suited for companies in sectors such as food and beverage, pharmaceuticals, paper & pulp, or chemicals, which use low and medium temperature heat. As the technology matures, they may be viable even for high temperature industries including steel and cement.

Approach

TES can be delivered as a standard capital investment by a dedicated solution provider. However, it especially excels in combination with heat-as-a-service where the industrial company partners with a utility company. The typical structure would then look as follows:

• Utility: Finances, owns and operates the TES. It also secures the cheap electricity thanks to its expertise in electricity trading. It sells the heat generated to the industrial company per MWh and collects additional revenue by using the TES for ancillary services supporting the grid.

• Industrial company: Buys the heat as it is generated. It avoids the need for large capital investment as the TES is owned by the utility.

• Solution provider: Supplies and builds the TES as an EPC contractor.

Stakeholders involved

• Manufacturing plant director: The TES supplies hot water or steam which are instrumental to the manufacturing processes. The implementation project therefore requires strong buy-in from the plant leadership.

• Operations: In addition to the plant leadership, company-level operations professionals should bring in specialized expertise and experience from similar projects.

• Finance: TES represents a large capital investment which in most companies requires approval of an investment committee including finance professionals.

• Sustainability: Implementation of TES significantly reduces Scope 1 emissions and should be included in long-term emissions reduction plans.

Key parameters to consider

• Grid connection: TES solutions typically require grid connection upgrades and dedicated electrical infrastructure as they concentrate charging into short periods of very high peak load – several times higher than comparable electric boilers. However, securing this additional capacity is generally easier, since TES systems can be deployed flexibly when grid capacity is available and there is an oversupply of renewable electricity.

• Electricity price volatility: The electricity price volatility is key for commercial viability, as it allows the TES system to charge at low prices and provide ancillary services to the grid. In favorable markets, payments for these services can account for up to 40% of the revenue generated by the TES solution.

• Frequency of charging cycles: Higher frequency of cycles (i.e., times the storage is charged and subsequently discharged) improves the economic viability of TES solutions by distributing CapEx over more uses. As a result, most current TES systems are designed for at least 1 cycle per day.

• No reduction in capacity: TES solutions do not experience a noticeable reduction in capacity throughout their lifetime if properly maintained. They are typically designed for 15,000 and, in some cases, even 300,000 cycles (compared to 6,000-8,000 cycle lifetime of standard Li-ion batteries).

Implementation and operations tips

Common implementation success factors reported by companies are:

• Availability of capital subsidies and/or Heat-as-a-Service financing models

• Availability of on-site energy generation or possibility to connect to the grid as a flexible asset

• TES system design modifications to fit industrial company requirements