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1、Driving to Net Zero Industry Through Long Duration Energy StorageNovember 2023LONG DURATION ENERGY STORAGE(LDES)The Long Duration Energy Storage Council commissioned this report to demonstrate the current and potential applications for member technologies to decarbonize industry.There are multiple l
2、ong duration energy storage technologies commercially available and under development.In general,these technologies provide more than eight hours of energy using a variety of electrochemical,mechanical,thermal,and chemical storage media.Many of these technologies have been under development for more
3、 than a decade and oftentimes utilize existing motors,pumps and other equipment that has already been utilized in other industries.1The importance of long duration energy storage technologies will increase in line with increasing saturation of intermittent renewable energy supply on electric grids a
4、round the world.This report examines how long duration energy storage technologies can decarbonize fossil fueled industrial processes by utilizing this renewable energy supply to provide reliable baseload electric supply.The Long Duration Energy Storage Council commissioned global management consult
5、ing firm Roland Berger to conduct the analysis and compile the report.Roland Berger collaborated with the Long Duration Energy Storage Council staff as well as its technology and anchor members on the content,analysis and assumptions in this report.ABOUT THE LDES COUNCILThe Long Duration Energy Stor
6、age Council(LDES Council)is global non-profit organization committed to decarbonizing global energy systems by 2040 through the development,deployment,and integration of long duration energy storage technologies(LDES).The LDES Councils mission is to facilitate the transition to a more sustainable an
7、d resilient energy future by advocating for policies,fostering innovation,and promoting collaboration among its membership and stakeholders in the energy industry.As the leading voice in advocating for the widespread adoption of diverse long duration energy storage technologies,the LDES Council prov
8、ides guidance and reports to enable the integration of renewable energy sources and enhance grid stability using LDES technologies to achieve a flexible,secure,reliable,affordable,and fossil fuel free energy system.ABOUT ROLAND BERGERHeadquartered in Munich,Germany,Roland Berger is a global manageme
9、nt consulting firm of approximately 3,500 consultants.Roland Berger has more than 50 offices in 30 countries,and specializes in supporting its industrials,utility,investor and government clients through the energy transition.Preface1 The idea of hydraulic energy storage by means of pumps and turbine
10、s was born at the end of the 19th century in Switzerland and in Germany.The first pumped storage plant was built in Zurich in 1891 at the Limmat river followed by a second installation 1894 at lake Maggiore and a third one 1899 at the Aare river.The principle of pumped storage was first realized in
11、Germany 1891,where a steam machine was driving a centrifugal pump for dewatering the Rosenhof ore mine in the Upper Harz mountain by filling an upper reservoir,which was serving a separate water wheel.Krueger,K.,2020.Pumped Hydroelectric Storage.In K.Brun,T.Allison,and R.Dennis:Thermal,Mechanical,an
12、d Hybrid Chemical Energy Storage,New York,NY:Elsevier,ISBN 978-0-12-819892-62 Contents 01 02 03 04 0506 PrefaceExecutive summaryGlossaryThe case for industrial decarbonizationNet Zero Industry:Methodology overview Off-grid electric Easy-to-electrify heat Hard-to-electrify heatSupporting policy mecha
13、nismsAppendix A.Data centersB.Analytical approachC.Technologies technical and cost assumptionsD.Case study approach and status quo assumptionsE.Long Duration Energy Storage Council members2478051535859623 LDES technologies paired with renewables are a viable,cost-efficient and readily app
14、liable option for industrial decarbonization,as observers consider these technologies“An embarrassingly simple solution for industrial emissions.”2 Moreover,long duration energy storage technologies are already being piloted by blue chip industrial firms,as they are impatient to decarbonize now and
15、LDES gives them this opportunity.Tata Steel,ArcelorMittal,BHP,Rio Tinto,Yara,Avery Dennison,Eni and Microsoft are among the industrial firms embarking on projects to demonstrate the ability of LDES technologies to decarbonize their operations.LDES technologies costs,capabilities,and durability enabl
16、e them to support a wide range of applications for Long duration energy storage technologies paired with renewables could reduce global industrial greenhouse gas emissions by 65%.One of the most attractive current applications for LDES technologies is to support firm renewable electricity for off gr
17、id applications based on representative case studies analyzed in this report.LDES technologies also reduce the cost of abatement for low-to-medium temperature fossil fueled industrial processes(100C to 500C)and would be attractive with carbon incentives.Governments worldwide should prioritize polici
18、es that increase industrial users propensity to deploy LDES technologies such as subsidies,prices on carbon and pilot projects.industrial energy use cases that are unsuited to shorter duration resources.LDES has the ability to provide the equivalent of base load renewable power for industrial custom
19、ers,in some cases for mulitple days or even on a seasonal basis.Employing LDES technologies on a behind the meter basis will in many instances,enable industrial users to realize their decarbonization targets independent of the status of the decarbonization of the broader regional wholesale electrici
20、ty system.In many instances,LDES technologies can also address industrys needs for thermal energy that cannot be addressed by electricity alone.Commercially available LDES electric and heat technologies are technically capable of reducing industrial emissions by 65%.As described in Figure 1,a reduct
21、ion of 7.7 billion tons of CO2 are addressable by LDES technologies today.Yet policy and market support is required to ensure that these reductions can be achieved.FIG.1Executive summary2 https:/www-ft-com.ezp.lib.cam.ac.uk/content/7c6a0928-a233-4444-b414 Driving to Net Zero Industry T
22、hrough Long Duration Energy StorageLDES USE CASESExisting applications for long duration electric and thermal energy storage include firming wind and solar for off-grid use,and using renewable energy to decarbonize fossil-fueled industrial processes at 500C and below through electrification.LDES tec
23、hnologies are already economically attractive in enabling off-grid facilities to replace high-cost diesel fuel with firmed renewable electricity even without carbon incentives.FIG.2The technologies reduce the cost of abatement by more than 20%for low-to-medium temperature processes used in food manu
24、facturing and chemical processes.They would be more economically attractive with carbon incentives in place.The level of deployment of LDES in Hard-to-electrify industries like steel and cement are currently limited due to integration requirements for electric technologies to support their high temp
25、erature,radiative heat needs.However,LDES can already reduce emissions in these sectors by enabling those industrial users to take advantage of intermittent renewable generation for their round-the-clock electricity needs,and accessing CO2-free heat supply and recovery waste heat for lower temperatu
26、re processes.Additionally,steel producers looking to utilize 100%renewable energy in their operations are looking to 100+hour LDES technologies to provide reliability in their steelmaking process and solve inherent intermittent renewable power generation.In the longer term,LDES has the potential to
27、directly replace heat supply for high temperature fossil-fueled processes(e.g.,thermal energy storage-powered kilns for cement)or support complementary technologies(e.g.,electric LDES with e-kilns for cement or thermal energy storage paired with concentrated solar power).FIGURE 1Global industrial em
28、issions addressable by LDES3Source:Our World In Data,IEA,Roland Berger Global industrial emissionsShare addressable by LDES todayEmissions reduction opportunity for LDES12.5 billion tons of CO265%8.0billion tons CO22021 global industrial greenhouse gas emissionsPortion of total industrial emissions
29、from electricity supply and 1,000 C)or radiative heatGrid-connected electricIndustry that is grid connected,where LDES can enable transition from fossil fuels to intermittent renewable generationGrid-connected electricData Centers2.0%44 2.0%indicates the share of total global emissions that data cen
30、ters represented in 2022;data centers are not categorized as a component of industrial emissions6 Driving to Net Zero Industry Through Long Duration Energy StorageGlossaryCapex.Capital expenditureCO2.Carbon dioxideC.Degrees CelsiusDCF.Discounted cash flowEV.Electric vehicleGJ.GigajoulesH2.HydrogenIC
31、E.Internal combustion enginek.1,000kg.KilogramskWe MWe TWe.Kilowatts,megawatts,terawatts electrickWt MWt TWt.Kilowatts,megawatts,terawatts thermalMWhe TWhe.Megawatt-hours,terawatt-hours electricLDES.Long Duration Energy Storagemmbtu.Million British Thermal Units NPV.Net present valueOpex.Operating e
32、xpenditurep.a.Per annumPPA.Power purchase agreementR&D.Research and developmentRE.Renewable energy(solar and wind for report)REC.Renewable energy creditSMR.Small modular reactorsTon(s)or t.Metric tonsTOU.Time-of-useUSD.United States DollarsVOLL.Value of lost loadWACC.Weighted average cost of capital
33、.Delta/.Greater than,less than7 Driving to Net Zero Industry Through Long Duration Energy StorageIlias sapienihitat la qui acessi incit,tores ea cum est haruptatem quostiaeprae et maximus.Xeria qui tenis asimpor entisti sciditis nulpa quibusa picaepudit voluptatiis maio blabo.Nam restiis moluptiis u
34、t offic te volut asped qui delique con et,se aut verchit fugia sitium ellessi sequis int ideleni aerum,sincta ped mi,comnimus et ipsant anima pos ilis delecturio.Soles moloris accullor sunt.Evenecus aut omnihicae vellendis invendae maione nonet doloremqui qui doluptior alignat empeliquo min nonsed u
35、tatatet untis rere nonectem rerferu mquat.Litat.Asit ullabor escienimus qui odi doluptat.Rum faccus,que plicabo rionect isimagnati adia dolorer ibuscii scidend electuria as si aut estem asint.Te voluptaturis el mos aut et optassint.Nam,odit omnis utate ex et omnissit volupta quam doluptate ped que l
36、a sitatem.Ga.Luptat labor aut mos ab iliquiassin esequat qui imperum rerovid quias ea voluptas nim am quod quisiti ut landae et voluptatem reritatur?Ovit poriatur min estibus molore cullam,simi,qui de dit,sunt eaque venditaecta nus et reped quiatia nate natiust otatibus,ipidus,quis dolorem con est,s
37、inctio nserionem etur?Atumquatum solupic temquias ad quistibus esequam volorum et mo volupta con nonsed magnihita inus ut volluptibus erferio dolorum quibus eosa evenis doluptate es reratint et aut exerum nimus.Et expliquid quam eveliti nvendenditis vendelit rectium re volupta tibusam nonsequam dolo
38、recto beatemporio.Rae que nonserfercid ut aruptaquid maxime delluptatem est lit labo.Parunti assinis doluptatet facienis molupta speriore veribus.Ga.Ita con prae rent volupis as et quia velibus sum atur,ut et ipsam in et aut as dolo mint dolo consequaest,velecea quamus volorru pturias ellibustio.Ita
39、s iliquam dernatur,voluptam repero ducias id magni inimporae aut intis doloris quis eium eos maio.Catiust fugiam ilibeaqui tecuptatur mi,sitatur,unt et,to mo bea nonsequ aectibu sandusanti.Litat.Asit ullabor escienimus qui odi doluptat.Rum faccus,que plicabo rionect isimagnati adia dolorer ibuscii s
40、cidend electuria as si aut estem asint.Te voluptaturis.00Chapter start page lorem ipsum dolor setThe case for industrial decarbonization KEY FINDINGSIndustrial emissions account for more than a quarter of total global greenhouse emissions and are expected to increase;therefore,industrial decarboniza
41、tion is critical to achieve the Paris Climate Accords 1.5C pathway1.The industrial sector produces a large and rising share of global greenhouse gas emissions,especially in rapidly growing developing nations5;this challenge is compounded by growth in demand for heat and commodity price pressures2.De
42、carbonization of the sector requires:a.Technologies that can firm renewables and address a broad range of temperature requirements b.A policy-and market-driven approach that encourages firms to procure renewables matched to electricity consumption and implement new production processes3.LDES can add
43、ress 65%of industrial emissions today,equating to an 8 billion tons CO2 emissions reduction opportunity01Driving to Net Zero Industry Through Long Duration Energy Storage8 Industry is a key driver of the global economy.However,it is also a dirty business.Industrial emissions account for around a qua
44、rter of annual global emissions.In 2016,total industrial greenhouse gas emissions were around 12 billion tons CO2e,a figure that,without interventions,will almost double by 2050.6 The bulk of incremental emissions is forecasted to be in developing economies.7Around half of industrial emissions are d
45、riven by heat requirements for production processes.8 Emissions are high because the vast majority of industrial heat demand is currently met by burning fossil fuels,jeopardizing the ability to achieve the Paris Climate Accords 1.5C pathway.Most industrial processes require heat at specific levels a
46、nd lots of it.Demand for industrial heat is expected to grow by 34%between 2019 and 2040,with low and medium temperature heat the fastest growing segments.FIG.3This rise in demand coincides with economic and population growth and a push by countries around the world to achieve energy independence,dr
47、iven by economic forces and national security concerns.This rush towards self-sufficiency has sometimes been pursued at the expense of decarbonization progress,threatening global efforts to reduce emissions.On a per country basis,industrial emissions have more than doubled in non-OECD countries sinc
48、e 2000,while they have fallen by 16%in OECD countries over the same period.9 CO2 emissions in non-OECD countries have risen 3%per year on average,while slightly declining in the industrialized world.These trends present both challenges and opportunities.5 Developing nations or developing economies a
49、re a proxy for non-OECD countries 6 Roland Berger estimate based on a 2016 baseline from the PBL Netherland Environmental Assessment Agency 7 Energy Information Agency 2021 International Energy Outlook;non-OECD countries are a proxy for developing economies 8 Power Infrastructure Needs for Economywi
50、de Decarbonization(c2es.org)9 Emissions Database for Global Atmospheric Research 2022 Report https:/edgar.jrc.ec.europa.eu/report_2022FIGURE 3Global industrial energy and heat demand,2019 TWhSource:RC2ES Center for Climate and Energy Solutions,International Energy Agency,Roland BergerNote:Figure bas
51、ed on IEA New Policies scenario from WEO 203,61131,66711,33313,4175,194400C7,6947,08310,556+18%+48%+49%+34%9 Driving to Net Zero Industry Through Long Duration Energy StorageDECARBONIZATION CHALLENGESSuccessfully decarbonizing industry is expensive and requires technologies that can firm
52、renewables and service a broad range of temperature requirements.While technologies are constantly advancing,meeting these temperature demands is a key challenge.As shown in Figure 4,temperature requirements vary across and within industrial sectors,even in individual plants.While some lower tempera
53、ture requirements can already be met by electrification using renewables,meeting the very high temperature needs of,for example,the steel and cement industry through electrification is extremely challenging.FIG.4As well as satisfying temperature demands,decarbonization alternatives require often-ris
54、k-averse plant managers to embrace new technologies that are only now starting to gain commercial traction.Few proven solutions to electrify industrial processes have emerged and there has been a lack of scale to commercialize them(resulting in cost barriers).In addition,implementing decarbonized so
55、lutions is a CFO-level decision for industrial firms,many of whom are highly sensitive to cost pressures because they operate in commodity-reliant industries.They are also used to operating in a climate of where industrial energy is very cheap,simple and efficient.FIGURE 4Industrial temperature requ
56、irements,Germany%1000C150-500CFood&beverageWoodMachinery manufacturingMetal constructionPaperOthersRubber&plasticsChemicalsCement and non-metalsSteel and metals0%20%40%60%80%100%Source:Bundesverband Geothermie,Roland Berger10 Driving to Net Zero Industry Through Long Duration Energy StorageINDUSTRIA
57、L DECARBONIZATION APPROACHESSuccessfully decarbonizing the energy sources and production processes of industry is not just good for the sector itself,it also has a knock-on effect on the wider economy.It reduces the embodied carbon of industrial products while also cutting the impact of pollutants o
58、n nearby communities and ecosystems.For example,as shown in Figure 5,decarbonizing cement reduces the embodied carbon of the downstream products that use it as an input.This also effects bottom lines.Embodied carbon reductions could enable early decarbonization movers to capitalize on green willingn
59、ess-to-pay premiums on their products.Such premiums are gaining traction due to both end-consumer pull towards sustainability and government policy on the carbon footprints of produced goods.This downstream interest in the carbon intensity of upstream production is demonstrated by the rise of enviro
60、nmental declarations about goods and services.FIG.5Decarbonization also offers social benefits.For example,the reduction of non-GHG emissions from industrial plants,such as particulate matter,ozone and heavy metals that impact local air and water quality,can lead to health improvements for communiti
61、es living close by to these facilities.In addition,a transition to sustainable operations can extend the useful lives of such facilities,helping to preserve jobs.Source:Roland BergerFIGURE 5Example downstream embodied carbon reductions in decarbonized cement productionDecarbonizing cement production
62、.Reduces the embodied carbon of cement used in.Residential buildingsIndustrial waterNon-residential buildingsSewerageRoadsHarbors and airportsAgriculture,forestry,and fisheriesRailways and telecommunication11 Driving to Net Zero Industry Through Long Duration Energy StorageHowever,change will not co
63、me about by itself.Achieving these decarbonization goals will require both new policy and market willingness to implement new production processes.EXAMPLE APPROACHESA growing number of industrial companies large and small around the world are already proactively undertaking decarbonization initiativ
64、es,or will soon be mandated to as governments roll out strict decarbonization standards,carbon taxes or equivalent cap-and-trade mechanisms and/or subsidies for clean energy technologies.One such example is the European Unions Carbon Border Adjustment Mechanism.It aims to protect early industrial de
65、carbonization adopters in the bloc by imposing a carbon tax based on the embodied carbon in imported commodity materials.Another example is Australias Safeguard Mechanism,which was implemented in July 2023.It specifically requires industrial facilities to reduce their emissions below a baseline,or a
66、cquire carbon credits.The policy targets emissions-intensive operations and organizations10 that emit over 100,000 tons11 of CO2 per year.In terms of subsidies,the United States and European Union are advancing substantial tax credits and subsidies through the Inflation Reduction Act and the Green D
67、eal Industrial Plan,respectively.The EUs Net Zero Industry Act,which stems from the Green Deal Industrial Plan,identifies goals for net-zero industrial capacity and aims to create a regulatory framework to speed its deployment.Companies themselves either as a matter of corporate strategy or due to i
68、nvestor/public pressure have also taken voluntary action.For example,as of June 2023,more than 1,300 large industrial companies around the world have committed to meaningful emissions reductions by setting a Science Based Target(SBTi).12 FIG.610 For example,mining,oil and gas production,manufacturin
69、g,transport,waste facilities.11 “Tons”refers to metric tons(1,000 kg);this applies to all further mentions of“tons”12 Science Based Targets Initiative global partnership that provides guidance and a pathway for the private sector to set science-based emissions-reduction targets12 Driving to Net Zero
70、 Industry Through Long Duration Energy StorageFIGURE 6Number of companies with a Science Based Target12 by typeCumulative corporate sustainability targets set in line with the 2015 Paris AgreementSource:SBTI,Roland BergerIndustrialsOther playersYTD 202339802,0413,000
71、212022By Sector#of companies with targets set538791,3026204,1621,71113 Driving to Net Zero Industry Through Long Duration Energy StorageSource:LDES Council,Roland BergerFIGURE 7Announced support for LDES in indicative countriesCountries(Ordered by USD)USDDetails2.0 bnChileEnerg
72、y storage,incl.LDES1.16 bnHungaryEnergy storage,incl.LDES500 mUnited StatesLDES-specific350 mSpainLDES-specific220 mCanadaEnergy storage,incl.LDES37 mUnited KingdomLDES-specific14 Driving to Net Zero Industry Through Long Duration Energy Storage00Chapter start page lorem ipsum dolor setIlias sapieni
73、hitat la qui acessi incit,tores ea cum est haruptatem quostiaeprae et maximus.Xeria qui tenis asimpor entisti sciditis nulpa quibusa picaepudit voluptatiis maio blabo.Nam restiis moluptiis ut offic te volut asped qui delique con et,se aut verchit fugia sitium ellessi sequis int ideleni aerum,sincta
74、ped mi,comnimus et ipsant anima pos ilis delecturio.Soles moloris accullor sunt.Evenecus aut omnihicae vellendis invendae maione nonet doloremqui qui doluptior alignat empeliquo min nonsed utatatet untis rere nonectem rerferu mquat.Litat.Asit ullabor escienimus qui odi doluptat.Rum faccus,que plicab
75、o rionect isimagnati adia dolorer ibuscii scidend electuria as si aut estem asint.Te voluptaturis el mos aut et optassint.Nam,odit omnis utate ex et omnissit volupta quam doluptate ped que la sitatem.Ga.Luptat labor aut mos ab iliquiassin esequat qui imperum rerovid quias ea voluptas nim am quod qui
76、siti ut landae et voluptatem reritatur?Ovit poriatur min estibus molore cullam,simi,qui de dit,sunt eaque venditaecta nus et reped quiatia nate natiust otatibus,ipidus,quis dolorem con est,sinctio nserionem etur?Atumquatum solupic temquias ad quistibus esequam volorum et mo volupta con nonsed magnih
77、ita inus ut volluptibus erferio dolorum quibus eosa evenis doluptate es reratint et aut exerum nimus.Et expliquid quam eveliti nvendenditis vendelit rectium re volupta tibusam nonsequam dolorecto beatemporio.Rae que nonserfercid ut aruptaquid maxime delluptatem est lit labo.Parunti assinis doluptate
78、t facienis molupta speriore veribus.Ga.Ita con prae rent volupis as et quia velibus sum atur,ut et ipsam in et aut as dolo mint dolo consequaest,velecea quamus volorru pturias ellibustio.Itas iliquam dernatur,voluptam repero ducias id magni inimporae aut intis doloris quis eium eos maio.Catiust fugi
79、am ilibeaqui tecuptatur mi,sitatur,unt et,to mo bea nonsequ aectibu sandusanti.Litat.Asit ullabor escienimus qui odi doluptat.Rum faccus,que plicabo rionect isimagnati adia dolorer ibuscii scidend electuria as si aut estem asint.Te voluptaturis.Net Zero Industry:Methodology overview02INTRODUCTIONLDE
80、S uses specialized technologies to store and discharge electric and thermal energy over durations ranging from eight to 100 hours or more.These technologies can be grouped into four principal LDES technology families:electrochemical,chemical,thermal and mechanical.Each one has its own application sw
81、eet spot,in terms of duration,power and cycling requirements.See Figure 8 for a detailed description.We have created case studies specific to each family to demonstrate their value for real-world applications.We assessed how LDES could complement other technologies in decarbonizing and the economic
82、attractiveness of doing so.15 Driving to Net Zero Industry Through Long Duration Energy StorageChemicalOBJECTIVESThe objectives of this study were to understand:1)how LDES can be applied to decarbonize different industrial applications around the world;2)the economic attractiveness of doing so;3)how
83、 LDES could complement other technologies addressing the same task;and 4)to identify if there are policy/regulatory actions which could accelerate the application of LDES-based decarbonization.The study uses case studies and assumptions to provide an assessment of the benefits that LDES technologies
84、 offer industrial users.It also provides information on the requirements of LDES and its current and expected capabilities.FOCUS AREASThe study focuses on LDES opportunities across a representative sample of industries and geographies that characterize global industrial heat,electric,and process ene
85、rgy needs.The sample prioritizes the five highest-emitting segments in traditional industry,as shown in FIG.9.1313 While typically not categorized as belonging to industrial emissions,Appendix 1 also highlights data centers as an example of how LDES can support decarbonization of electric loads that
86、 require uninterrupted 24/7 baseload electricityFIGURE 8Long Duration Energy Storage categoriesSource:LDES Council,Roland Berger DescriptionAdvantagesTypesEnergy storage systems generating electrical energy from chemical reactionsSolutions stocking thermal energy by heating or cooling a storage medi
87、umChemical energy storage systems store electricity through the creation of chemical bondsSolutions that store energy as a kinetic,gravitational potential or compression/pressure medium Flow Metal anode Non-metal Chemical Storage Sensible heat Latent heat Thermochemical Green hydrogen Methane Ammoni
88、a Methanol Compressed air energy storage Liquid air energy storage Pumped hydro storage Gravity based storage Liquid CO2 Flexibility Declining long-term costs Wide operating range Potential range of footprint and RTE with relative higher C-rates Technology options either have inexpensive materials o
89、r require less expensive materials than LiB No degradation Cycling throughout the day Modular options available No degradation Proven via established technologies(pumped hydro)Considered safe Attractive economicsElectrochemicalThermalMechanical16 Driving to Net Zero Industry Through Long Duration En
90、ergy Storage36.2%Industrial65.8%Non-industrial10.2%Cement3.4%Food and tobacco2.4%Non-ferrous metals1.7%Machinery2.0%Paper,pulp&printing19.7%Chemical&petrochemical24.5%Iron&Steel36.1%Other industrialCurrent LDES technologies can be applied to both on-and off-grid industry;and electric and heat applic
91、ations.The opportunities offered by LDES can be grouped into three categories described in Figure 10,which are used to structure the subsequent chapters of this report(FIG.10).Off-grid electric:Remote industrial applications that are not connected to the grid,where LDES can enable the transition fro
92、m fossil fuels to intermittent renewable generation.(Case study:Mining)Easy-to-electrify heat:Industrial sectors with heat requirements that can be electrified using existing technologies.(Case studies:Chemicals,Food)Hard-to-electrify heat:Sectors where electrification is currently limited by proces
93、s requirements,such as,the need for high temperatures(1,000C)or radiative heat.(Case studies:Steel,Cement)FIGURE 9Global greenhouse gas emissions by sector and industrial segment,2016Source:Our World In Data,IEA,Roland BergerGlobal emissions by sector%Five highest-emitting segments Focus segments fo
94、r report2/3 of industrial emissions are from heatGlobal industrial process and energy emissions%1414 Data center emissions are not included in global industrial process emissions17 Driving to Net Zero Industry Through Long Duration Energy StorageFIGURE 10Categorization of industrial sectors by dimen
95、sion as examined in this report15Source:Roland BergerMETHODOLOGYThe first step of the analysis involved characterizing the prioritized industrial segments.This included establishing electricity and heat needs,operating constraints and considerations,energy market and regulatory conditions,and sustai
96、nability goals for each industry using published research and expert interviews.To account for geographic variations,selected segments were examined across eight countries Germany,the United Kingdom,South Africa,the United Arab Emirates,India,Australia,Chile,and the United States.These were selected
97、 based on their respective industrial footprint,current and future energy mix,and commercial strategies of LDES technology providers.The findings are laid out in the Global Relevance sections of the applicable chapters.FIG.11Off GridElectricityHeatEasyHardOn GridChapter 3Off-grid electric16MiningDat
98、a centersFood and ChemicalsSteel and CementAppendix 1Grid-connected electric15 Off Grid heat is a viable application;however,it is not examined in this reportLDES technologies evaluated by caseElectrochemicalThermalChemicalMechanical16 Focus in Chapter 3 is primary extraction,not mineral processing1
99、7 Heat required by Alumina industry sector relates to Chapter 4 Easy-to-electrify heatIndustry segments highlighted below were selected to be representative of each category for case studies;in the real world,industry segments may have energy demands that do not match this categorizationChapter 4Eas
100、y-to-electrify heat17Chapter 5Hard-to-electrify heat18 Driving to Net Zero Industry Through Long Duration Energy StorageFor each industry segment,one country was then selected for a case study.The choice was based on the prominence of the industry in the country,the countrys global share of that ind
101、ustry,and the countrys decarbonization targets.From this,more detailed information on specific LDES applications across each of the three focus sectors was gathered.Publicly available LDES technology costs(and cost declines through 2040)and performance parameters were then validated based on LDES Co
102、uncil member review and input.Leading decarbonization alternatives were also identified and their costs and performance parameters collected.FIG.12Next,a technoeconomic analysis was conducted to determine each decarbonization solutions economic attractiveness from the standpoint of project economics
103、 and carbon reductions.This United StatesGermanyUnited KingdomSouth AfricaIndiaUAEAustraliaChileFIGURE 11Focus countriesSource:Roland Berger19 Driving to Net Zero Industry Through Long Duration Energy StorageSource:Roland BergerFIGURE 12LDES can be part of a larger portfolio of industrial decarboniz
104、ation technologies,including boilers,heat pumps and SMRsElectric Boiler Low capital costs Limited applicability due to operational temperature range of 100C-500CHydrogen Boiler Economic feasibility dependent on access to large supply of green hydrogen at low costElectric Heat Pump Higher capital cos
105、ts than LDES Limited applicability due to operational temperature range of 100C-150CLi-Ion Battery Weaker cost position compared to LDES due to augmentation and oversizing costs stemming from degradation Supply chain risks and environmental impacts from mining relating to rare earth mineral componen
106、tsSmall Modular Reactor Commercialization expected in the 2030s Feasibility challenges due to regulatory,siting,and potential customer acceptance complaintsThe diversity and adaptability of LDES technologies allow them to complement the options in the table abovewas done by comparing each segments s
107、tatus quo costs and emissions.All case studies in this report represent a 99+%reduction of status quo emissions(scope of emissions specified by case).18 Each solutions current and future economic attractiveness over a 20-year period was then analyzed for all the representative geographies,using proj
108、ect start years of 2023,2030,and 2040.The technoeconomic analysis yielded a cost of abatement by solution for each of the three time periods,representative segments,and geographies.FIG.13Variations in the findings for the eight countries reflect differences in:input retail and wholesale electric pri
109、ces;PPA prices;REC prices;grid emissions factors;solar and wind generation profiles and costs(capital and operating);fuel prices(diesel,natural gas,green hydrogen,nuclear);outage frequency and durations:subsidies;and carbon prices.All of these inputs were forecasted to 206019.The results of the anal
110、ysis underlined the critical role of a number of variables,including the evolution of electricity markets and policy regimes 18 It is important to note that the marginal cost of abating e.g.,the first 5%of emissions is significantly lower than the marginal cost of abating the last 5%of emissions 19
111、Reflecting 20-year period analyzed from a project start in 204020 Driving to Net Zero Industry Through Long Duration Energy Storagecould alter the cost of abatement in the future.We also performed sensitivities on a selected set of these variables for each case to reflect how potential scenarios cou
112、ld alter analysis results.See Appendix 2 for further detail on the techno-economic analysis methodology and inputs.FIGURE 13Simplified schematic of modelNote:See Appendix 2 for details on variables considered in analysis and for detailed model schematicLong Duration Energy Storage solutionCurrent st
113、ate energy solutionCustomer energy requirementsTechnoeconomic analysisCost of abatementSource:Roland BergerCountry-specific energy attributes21 Driving to Net Zero Industry Through Long Duration Energy StorageOff-grid electric KEY FINDINGSThe off-grid industrial segment presents an immediately attra
114、ctive application for LDES due to the cost advantage of renewables over fossil fuels1.LDES technologies support electrification and decarbonization of off-grid sites,such as mines,by enabling them to shift from fossil fuels to renewables,while maintaining reliable supply2.There are few current alter
115、natives to LDES for decarbonizing and maintaining reliability off-grid;LDES is cheaper than lithium-ion storage,depending on site conditions and performance needs3.The business case for switching to off-grid LDES is already very attractive in several mining regions,especially where fuel prices are h
116、igh and where solar and wind resources are abundant0322 Driving to Net Zero Industry Through Long Duration Energy StorageOVERVIEW AND APPLICATIONSOff-grid refers to facilities that are not connected to a central power grid,and instead rely on power generated locally.Industrial off-grid applications
117、are most common in the mining sector.They are also found in oil and gas exploration and extraction,and remote agricultural facilities such as dairy farms.LDES technologies support electrification and decarbonization of off-grid facilities by enabling them to switch from fossil fuels to a reliable,re
118、newables-powered supply.When paired with renewables,LDES enables full decarbonization of electricity supply,an important goal of many companies.Decarbonization of electricity supply also allows off-grid facilities to decarbonize vehicles through electrification.The mining industry is the biggest pot
119、ential user of off-grid LDES,with many attractive applications.For example,renewables-based LDES is capable of powering equipment and vehicles involved in processes such as comminution,digging,drilling,blasting,and ventilation,replacing diesel fuel and power generated from natural gas.Specific appli
120、cations vary according to the quality of renewable resources.FIG.14While electric mining vehicles and equipment are nascent,they are already available and are near parity with diesel counterparts.The rapid scaling of electric mining vehicles production,as well as cost declines,are expected over time
121、.VALUE PROPOSITION AND FEASIBILITYThe economics of fully decarbonizing an off-grid site with LDES plus renewables are already very attractive due to the relative cost of renewables compared to diesel.The use of liquid fuel is not only expensive but also highly carbon intensive.For example,diesel has
122、 an emissions rate of approximately 75 kg CO2 per mmbtu,about 150%the emissions rate of natural gas and 80%the emissions rate of coal.FIGURE 14LDES solution for off grid electric(mining)Source:Roland BergerFrom:280k tons CO2 per yearTo:Net zeroDiesel generatorDieselLDESMine operationsMine operations
123、Renewable energyVehicles/machineryElectrified vehicles/machinery23 Driving to Net Zero Industry Through Long Duration Energy StorageThis does not include the additional emissions resulting from fuel deliveries,which can be on a daily or weekly basis.The case for LDES should become even more financia
124、lly attractive into the future,given the expected increases in diesel prices and anticipated improvements in LDES costs and performance.An off-grid mine in Australia,for example,might expect to incur USD 3 billion in opex over 20 years,use 28 million gallons of diesel per year,and emit 300 k tons CO
125、2 per year.However,given a diesel price of USD 6 per gallon,attractive renewable resources,and a mining operation that can be adapted to electrified transport and processing equipment,the mine could save 76%on its opex with a switch to renewable generation and LDES.Averaging across all electric LDES
126、 technologies,it could achieve full decarbonization at a savings-not a cost-of USD 609 per ton of CO2 abated.Electric LDES technologies therefore support a strong case for use as electrification and decarbonization tools,and are the most economic option today.They are better suited to long-duration
127、applications(8+hours)than,for example,lithium-ion cells,and are more economically attractive than lithium-ion by avoiding additional costs associated with oversizing and augmentation.A typical LDES resource duty cycle for the off grid mine is illustrated in the figure below.The resource is able to c
128、harge during the day and support night time mine operations with LDES and wind energy.FIG.15Small modular reactors(SMR)have a role to play in electrifi-cation and decarbonization,but are not yet available(expected in the 2030s).In addition,SMRs may not be feasible at all locations due to regulatory,
129、siting,and customer acceptance constraints.FIGURE 15Indicative daily(July)energy production and LDES dispatch for off-grid mining,AustraliaEnergyEnergyCurtailmentCombined solar and wind output MWLoad MWLDES balance MWh HrRenewables output and demand MWLDES state of charge MWh05
130、050025450400622324Source:Roland Berger24 Driving to Net Zero Industry Through Long Duration Energy StorageGLOBAL RELEVANCECountries with sizable off-grid mining industries present the best off-grid opportunities for LDES.These include Australia,Canada,and countries i
131、n South America and Africa,like Chile and South Africa.The economics of LDES for off-grid power applications are globally favorable,with the case varying according to local fossil fuel costs,renewable costs and resources,and carbon taxes or policy support.For example,for every dollar of carbon tax,t
132、he cost of abatement reduces by a dollar per ton of CO2.ENABLERSLDES is already an economically attractive decarbonization solution for off-grid industry.However,subsidies can complicate the case for or against it.In some countries,there may be countervailing price signals such as subsidies or other
133、 support for fossil-fuel-driven equipment.As the case for LDES is strongly tied to fossil fuel prices,fossil fuel subsidies weaken the case;conversely,carbon taxes or subsidies for decarbonization bolster the case.Electrifying power from diesel generators and diesel vehicles/machinery(off grid)The c
134、ase:Off-grid mine in Western Australia.Brownfield development of renewables plus LDES for decarbonization of all energy consumption.Status quo:The mine uses 28 million gallons of diesel p.a.to fuel vehicles(40%)and generate power(60%,or 33 MWe).Diesel price starts at USD 6/gallon and escalates over
135、time.The mine is expected to incur USD 3 billion in opex and emit 5.6 million tons of CO2 over 20 years.See Appendix 4 for details.LDES solution:Vehicles are electrified and power decarbonized through 210-230 MWe renewables and 27-54 MWe of 24-hour LDES(dependent on the LDES technology).LDES enables
136、 10%additional fuel switching compared to renewables only as LDES allows time-shifting of renewables to periods when solar and wind generation drops off.Emissions abatement:The mine is able to abate 99%of emissions,equaling 5.6 million tons of CO2 over 20 years(or 279k tons CO2 p.a.).Economics:LDES
137、supports electrification and decarbonization of the mine,resulting in a 76%reduction in opex.The saving from mechanical-only LDES technologies is USD 594/ton CO2.The highest value comes from switching from expensive diesel to renewables LDES-only contribution is USD 54/ton CO2Outlook:Net savings imp
138、rove by 40%through 2040,driven by rising diesel price and declining LDES costsGeographies:Renewables+LDES helps to decarbonize off-grid mining profitably in each of the analyzed countries,with economics varying based on:Fuel cost differences(primary driver)Carbon taxes Renewables costs and resources
139、CASE STUDY:MINING25 Driving to Net Zero Industry Through Long Duration Energy StorageAlternatives:Electric LDES technologies support a strong electrification and decarbonization case and are the most economic options explored that are currently available.In 2023,lithium-ion is less economically attr
140、active than all LDES technologies,with a 6%higher cost of decarbonizationFIGURE 16Case study:Off-grid mining,Australia renewable energy and electric LDES solution,2030 Real 2023 USD/ton CO2 abatedSource:Roland BergerElectrificationLDESLDES only is USD+54 per tonRenewable energy600500400300200100-100
141、0-200EVs CAPEX144 OPEX (incl.diesel gen.,ICE,EV)17RE CAPEXNegative discounted cash flowPositive discounted cash flowTotal discounted cash flow20 Diesel fuel used for both ICE vehicles and diesel generator;diesel savings attributed to each technology based on%of load met directly by each technology69
142、RE OPEX3 Diesel expense from RE19738LDES CAPEX27LDES OPEX2 Diesel expense from LDES2083Total NPV59426 Driving to Net Zero Industry Through Long Duration Energy StorageEasy-to-electrify heat04KEY FINDINGSLDES is an economically attractive solution for industrial firms seeking to decarbonize heat or i
143、mprove the reliability of their electric supply1.In heat applications,LDES makes the most sense where temperatures between 150C and 500C are required2.The business case for LDES is most attractive in places where customers are exposed to high and volatile electricity prices(such as Germany),and wher
144、e reliability of supply is a challenge(such as South Africa)3.The case for LDES is expected to improve through 2040 due to the falling cost of LDES solutions,increasing price volatility and deterioration in grid reliability 4.Key enablers are long-term contracts which enable the amortization of inve
145、stments over 15-30 years and market/regulatory encouragement of industry to procure 24/7 renewablesDriving to Net Zero Industry Through Long Duration Energy Storage27 OVERVIEW AND APPLICATIONSEasy-to-electrify heat includes a wide range of sectors with heat requirements that can be electrified using
146、 existing technologies(for example,electric boilers and heat pumps).Processes in these sectors typically utilize heat in the form of steam or hot air,with temperature requirements between 100C and 500C.Half of global industrial heat production falls within the Easy-to-electrify segment.Higher-temper
147、ature sectors such as steel and cement make up the remaining 50%(see Chapter 6).Facilities that fall within the this segment need not only fossil fuels to supply heat(for example,natural gas boilers),but also electricity from the grid to supply adjacent manufacturing processes,control systems,HVAC,2
148、1 and lighting.This means that heat demand usually goes hand-in-hand with electricity demand,which also needs to be decarbonized.In many sectors requiring process heat,reliability is vital.However,costs relating to both lost inventory and lost production,but also damaged equipment22 yield a very hig
149、h value of lost load(VOLL)in these sectors.This increases significantly at longer durations.Thermal LDES,in conjunction with complementary technologies such as e-boilers,enables electrification of low-to-medium temperature heat(100C to 500C),facilitates decarbonization of electricity supply,and ensu
150、res reliability of supply.For this analysis,thermal LDES was coupled with an e-boiler,though in some cases LDES technologies are capable of providing heat without one.23 FIG.1721 Heating,Ventilation,and Air Conditioning systems 22 For example,if an outage were to cause a chemical to cool and solidif
151、y inside piping and cause permanent damage 23 Meaning,in this analysis,thermal LDES has a 1-to-1 charge-discharge ratio;in some cases,thermal LDES technologies can be configured with higher charge-discharge ratios,e.g.,2-to-1 or 3-to-1;see Figure 21 for a thermal LDES standalone 3-to-1 charge-discha
152、rge ratio configuration that incurs a 15%higher capexFIGURE 17LDES solution for easy to electrify heat(food/chemicals)24,25From:150 to 220k tons of CO2 per yearTo:Net ZeroNatural gas boilerIndustrial process heatIndustrial process heatRenewable EnergyMedium-pressure steamMedium-pressure steamElectri
153、c boilerLDES24 This case is relevant to the digestion process in alumina refineries25 This schematic is not relevant for the thermal LDES standalone 3-to-1 charge-discharge ratio configuration presented in Figure 2128 Driving to Net Zero Industry Through Long Duration Energy StorageThis is especiall
154、y the case when temperatures outside the operational range of high-temperature heat pumps(100-150C)are required.Both e-boilers and electric heat pumps are readily available.Due to the high lost load costs,there is potential for a complementary relationship between on-site thermal energy storage tech
155、nologies and front-of-the-meter,100+hour electric LDES technologies in a scenario where grid outages become more frequent and longer in duration due to climate change and aging infrastructure.VALUE PROPOSITION AND FEASIBILITYThe economics of solutions leveraging LDES to electrify processes are prima
156、rily contingent on electricity costs price volatility and availability of dynamic price signals and avoided lost load costs.In many applications,LDES can enable electrification of low-to-medium temperature steam and hot air at lower cost than other alternatives.Additionally,in many applications,LDES
157、 solutions are ready to be implemented sooner than other technologies.LDES improves electrification economics by decreasing the cost of abatement by 10%to 20%compared to a scenario where LDES is not utilized.Project economics are most sensitive to four key variables:lost load cost savings(related to
158、 outage count and duration);natural gas prices;carbon taxes;and bill savings(tied to grid volatility).Increasing any of these variables would enhance LDES feasibility in the future,reducing cost of abatement by 10-65%.SMRs could be a feasible alternative for this segment in the future,assuming the t
159、echnology achieves anticipated cost reductions and commercialization timelines.Nearer term,however,thermal energy storage technologies appear to be the most feasible and cost-effective solution for decarbonized heat in the Easy-to-electrify heat segment with their capability to both provide heat and
160、 firm intermittent renewables supply.GLOBAL RELEVANCELDES presents economically attractive opportunities in countries with industry that requires low-to-medium temperature heat,albeit still with a cost of abatement to overcome.This includes low-to-medium temperature heat demand in,for example,chemic
161、al,food,paper,and several other industrial segments highlighted in Figure 9.These segments total energy demand(including electricity and heat)account for up to 41%of global industrial emissions.In particular,LDES improves the economics through avoided lost load costs in regions with very long outage
162、s(for example,countries with unreliable grids like South Africa)of storing electricity/heat for up to 100 hours.LDES economics are also strong in regions where the technology can mitigate high carbon taxes and high natural gas prices,and where LDES maximizes bill savings due to high and volatile pow
163、er prices.High natural gas prices and carbon taxes along with comparatively low electricity prices in the UK make electrification there particularly economically attractive,for example.The countrys high electricity price volatility and the potential for high bill savings add to LDESs economic attrac
164、tiveness.Access to wholesale instead of retail electric prices lowers the final cost of abatement by 60%to 186 dollars per ton of carbon abated,see Figure 18.This is because higher volatility for wholesale versus retail prices enables the LDES resource to provide greater value through taking advanta
165、ge of time-based arbitrage of wholesale power prices.29 Driving to Net Zero Industry Through Long Duration Energy StorageEconomics of electrification with LDES are sensitive to natural gas prices due to avoided natural gas expenses.At a natural gas price of 10 dollars per mmbtu,final cost of abateme
166、nt for a thermal LDES standalone configuration is 95 dollars per ton of carbon abated.However,at a 75%higher natural gas price of 18 dollars per mmbtu,the result is instead a savings of 13 dollars per ton of carbon abated.For details,see Figure 19.ENABLERSCosts of switching energy and aversion to ch
167、ange will prove key barriers to LDES.This is especially the case in regions where electrification will prove expensive due to the relatively high cost of electricity compared to conventional fuels,and where infrastructure upgrade costs are elevated.In some industries,industrial producers may be able
168、 to pass on the increased cost of decarbonizing via electrification to their customers who are willing to pay a green premium.Obviously,establishing the equivalent of a carbon tax would also provide a similar incentive for decarbonization.Additionally,policy that establishes dynamic price signals is
169、 a key enabler to improve LDES economics(critical to bill savings).FIGURE 18Cost of abatement sensitivity on wholesale electricity market access Food,United States26Source:Roland BergerSource:Roland BergerUSD/ton of CO2Without wholesale electric market access With wholesale electric market access479
170、186-61%USD/ton of CO295USD 10 per mmbtu28USD 18 per mmbtu28-13-108FIGURE 19Cost of abatement sensitivity on natural gas price Chemicals,Germany2726 Overall cost of abatement figures shown here relate to Figure 22 and Figure 2327 Overall cost of abatement figures shown here relate to Figure 2128 USD
171、per mmbtu natural gas prices are 2023 starting points,escalated over timeCost of abatement figures shown here relate to thermal LDES standalone system with 3-to-1 charge-discharge ratio depicted in Figure 21.Higher charge capacity enables system to provide higher electricity bill savings than a 1-to
172、-1 configuration(paired-with an e-boiler)due to greater opportunity for time-based arbitrage of wholesale power prices.As a result of reduced electricity bills and a 75%increase in natural gas prices,this case results in a savings per ton of carbon abated.30 Driving to Net Zero Industry Through Long
173、 Duration Energy StorageElectrifying thermal energy for medium-temperature steam from a natural gas boiler(grid connected)The case:Brownfield development of an e-boiler paired with thermal LDES29 to serve the heat needs of a chemicals plant in Germany with 400C,200 bar steam demand.Status quo:The pl
174、ant produces steam using a natural gas boiler(100 MWt demand).See Appendix 4 for details.LDES solution:Steam production is electrified with an 100 MWt e-boiler,with a 100 MWt,24-hour thermal LDES to provide reliability and electricity load shifting.Storage of heat yields the highest savings for faci
175、lities electrifying heat via electric boilers,as opposed to storage of power only(prior to producing heat).Emissions abatement:The plant is able to abate 100%of scope 1 emissions related to heat demand,equal to 3 million tons of CO2 over 20 years(or 154k tons CO2 p.a.).Economics:LDES supports electr
176、ification and decarbonization of the chemical plant.The result is a 30%increase in opex.The cost of abatement using only an e-boiler is USD 240/ton CO2 abated,but LDES reduces that cost by USD 31/ton CO2.The largest cost contributor is the higher cost of electricity relative to natural gas USD 144/t
177、on CO2 carbon tax savings mitigate some of the costs associated with electrification By shifting electric load,LDES helps reduce the electricity bill by USD 141/ton CO2(28%savings).It also allows the plant to avoid USD 13/ton CO2 lost load costs associated with grid outages(VOLL:USD 5/kWh).Higher ch
178、arge capacity of 3-to-1 system depicted in Figure 2129 enables system to provide higher electricity bill savings than a 1-to-1 configuration(paired with an e-boiler),incurring a capex that is only 15%higher.Due to greater opportunity for time-based arbitrage of wholesale power prices using higher ch
179、arge capacity,bill savings rise to USD 261/ton CO2(51%savings).Outlook:The costs of electrification with LDES improve by 13%through 2040,as fuel prices and carbon taxes escalate and as LDES costs decline.The benefit from thermal LDES load-shifting also improves as LDES technology costs decline,the t
180、echnology scales and electricity prices become more volatile.Geographies:The highest LDES-related savings occur in countries with unreliable grids,volatile electricity prices(wholesale or large differentials in TOU utility rates),high natural gas prices,and high carbon prices.Of the countries assess
181、ed for this report,LDES leads to the highest bill savings in Germany and the United States,where customers are exposed to wholesale price volatility and time-of-use rates respectively In the United Arab Emirates,by contrast,there are no bills savings due to very little arbitrage opportunity in elect
182、ric rates CASE STUDY:CHEMICALS29 Figure 20 shows thermal LDES paired with an e-boiler and Figure 21 shows thermal LDES standalone,relating to sensitivity shown in Figure 19.Thermal LDES system shown in Figure 20 has a 1-to-1 charge-discharge ratio while system shown in Figure 21 has a 3-to-1 charge-
183、discharge ratio31 Driving to Net Zero Industry Through Long Duration Energy Storage Electricity price volatility is often found in countries with higher renewables penetration,evidenced by higher price volatility in Germany and the United States compared to the United Arab Emirates and South Africa
184、Alternatives:Thermal LDES supporting an e-boiler is currently one of the most economic options for decarbonizing medium-temperature steam.Depending on gas and electricity prices,a TES(without an e-boiler)could even be a better economic option than staying on gas,even without a carbon tax.FIGURE 20Ca
185、se study:Chemicals,Germany e-boiler vs.e-boiler and thermal LDES,2030 Real 2023 USD/ton CO2 abatedE-boiler+Thermal LDESLDES only is USD+31 per tonE-boiler only-150-50-200-250-300-1000-550-500-450-444136240115E-boiler CAPEX Electricity bill Value of lost load Natural Gas savings Carbon
186、Tax OPEXTotal NPV Value of lost loadLDES CAPEX OPEX Electricity billTotal NPVNegative discounted cash flowPositive discounted cash flowTotal discounted cash flow914113209Source:Roland Berger32 Driving to Net Zero Industry Through Long Duration Energy Storage Green hydrogen boilers are not currently
187、economically feasible due to high green hydrogen prices in Germany(7 USD/kg).However,these are expected to improve dramatically SMRs are economically competitive but not yet commercially available,and subject to regulatory,siting and customer acceptance constraints Other alternatives,including CCUS
188、and lithium-ion batteries,can contribute to decarbonization but face feasibility and supply chain challengesNegative discounted cash flowPositive discounted cash flowTotal discounted cash flowFIGURE 21Case study:Chemicals,Germany thermal LDES standalone,203030 Real 2023 USD/ton CO2 abatedSource:Rola
189、nd BergerTotal NPV OPEX Value of lost load Electricity billLDES CAPEX Natural Gas savingsElectricity bill savings Carbon TaxLDES only for entire project is USD(95)per tonThermal LDES standalone-150-50-200-250-300-1000-550-650-500-600-450-14430 Relates to sensitivity shown in
190、 Figure 1931 Delta OPEX value rounded from USD(0.084)per ton to 0,meaning there was a small net spend on OPEX relative to status quo33 Driving to Net Zero Industry Through Long Duration Energy StorageElectrifying thermal energy for low-temperature steam from a natural gas boiler(grid connected)The c
191、ase:The electricity and heat demand(and scope 1,2 emissions)at a food plant in California32,United States,with low-temperature,low-pressure steam demand.Brownfield development of an e-boiler with thermal LDES.Status quo:The plant sources electricity from the grid(38 MWe)and produces steam using a na
192、tural gas boiler(68 MWt).See Appendix 4 for details.LDES solution:Steam production is electrified with a 68 MWt e-boiler and a 68 MWt,24-hour thermal LDES to provide reliability and electricity load shifting.For facilities electrifying heat via e-boilers,storage of heat yields the highest savings,as
193、 opposed to storage of power only(prior to producing heat).Emissions abatement:The plant is able to abate 100%of scope 1 and 2 emissions related to heat and electricity demand,equaling 4.4 million tons of CO2 over 20 years(or 220k tons CO2 p.a.).Economics:LDES supports electrification and decarboniz
194、ation of the food plant.The result is a 110%increase in opex.The cost of abatement is USD 582/ton CO2 abated,but LDES reduces that cost by USD 103/ton CO2.The largest cost contributor is the higher cost of electricity relative to natural gas USD 33/ton CO2 carbon tax savings do not cover the additio
195、nal costs By shifting electricity load,LDES helps reduce the electricity bill by USD 115/ton CO2(19%savings)and allows the plant to avoid USD 26/ton CO2 lost load costs associated with grid outagesOutlook:The costs of electrification improve by 11%through 2040,as fuel prices and carbon taxes rise.Th
196、e benefit from thermal LDES load-shifting also improves as LDES technology costs decline,the technology scales and electricity prices become more volatile.Geographies:The highest LDES-related savings occur in countries with unreliable grids,volatile electricity prices(wholesale or large deltas in TO
197、U utility rates),high natural gas prices,and high carbon prices.LDES offers the highest bill savings in Germany and the United States,where customers are exposed to wholesale price volatility and time-of-use rates In the United Arab Emirates,by contrast,there are no bill savings due to very little a
198、rbitrage opportunity in electricity rates Alternatives:Thermal LDES supporting an e-boiler is currently one of the most economic options for decarbonizing low-temperature steam where electric heat pumps are not feasible.Standalone e-heat pumps have the strongest economics in geographies with climate
199、s that impair the performance of heat pumps(for example,cold weather climates);electric boilers paired with LDES represent the next best alternative Other alternatives,as described in the chemicals case study,also exist but face cost,feasibility or commercialization challengesCASE STUDY:FOOD32 As a
200、result of this case being in California,cost of abatement is higher than in other locations(California has among the highest electricity costs in the United States)34 Driving to Net Zero Industry Through Long Duration Energy StorageFIGURE 22Case study:Food,United States e-boiler vs.e-boiler and ther
201、mal LDES,utility tariff,2030 Real 2023 USD/ton CO2 abatedE-boiler+Thermal LDESLDES only is USD+103 per tonE-boiler only-150-50-200-250-300-1000-550-650-500-600-450-400-3502 OPEX592 Electricity bill3E-boiler CAPEX29 Natural Gas savings33 Carbon Tax34LDES CAPEX OPEX Electricity bill Value of lost load
202、17 Value of lost load35REC expenseTotal NPV582Total NPV411526479Source:Roland BergerNegative discounted cash flowPositive discounted cash flowTotal discounted cash flow35 Driving to Net Zero Industry Through Long Duration Energy Storage33 Delta OPEX value rounded from USD(0.038)per ton to 0,meaning
203、there was a small net spend on OPEX relative to status quoFIGURE 23Case study:Food,United States thermal LDES standalone,utility tariff,2030 Real 2023 USD/ton CO2 abatedLDES only for entire project is USD 479 per tonThermal LDES standalone-150-50-200-250-300-1000-550-650-700-500-600-450-400-350 OPEX
204、59239 Electricity bill115 Natural Gas savings9 Carbon TaxLDES CAPEX Electricity bill savings Value of lost load35REC expenseTotal NPV2933479Source:Roland BergerNegative discounted cash flowPositive discounted cash flowTotal discounted cash flow033Figure 23 presents a sensitivity to the e-boiler and
205、thermal LDES case presented in Figure 22.In this case we can see that,holding all other assumptions and inputs constant,the cost of abatement from a 3-1 thermal LDES configuration at tariffed electric rates is unchanged due to a lack of price signals,lack of energy price volatility.36 Driving to Net
206、 Zero Industry Through Long Duration Energy StorageFIGURE 24Food,United States e-boiler vs.e-boiler and thermal LDES,wholesale tariff 203034 Real 2023 USD/ton CO2 abatedE-boiler+Thermal LDESLDES only is USD+24 per tonE-boiler only-80-40-20-100-120-140-600-240-280-220-260-200-217321034E
207、-boiler CAPEX Electricity bill Value of lost load Natural Gas savings Carbon Tax OPEXTotal NPV Value of lost loadLDES CAPEX OPEX Electricity billTotal NPV43626186Source:Roland BergerNegative discounted cash flowPositive discounted cash flowTotal discounted cash flow34 Relates to sensitivity shown in
208、 Figure 1837 Driving to Net Zero Industry Through Long Duration Energy Storage35 Delta OPEX value rounded from USD(0.038)per ton to 0,meaning there was a small net spend on OPEX relative to status quoFIGURE 25Case study:Food,United States thermal LDES standalone,wholesale tariff,2030 Real 2023 USD/t
209、on CO2 abatedLDES only for entire project is USD 128 per tonThermal LDES standalone-150-50-200-250-1000-300 OPEX25439 Electricity bill94 Natural Gas savings9 Carbon TaxLDES CAPEX Electricity bill savings Value of lost load0REC expenseTotal NPV29128Source:Roland Berger03533Figure 25 presents a sensit
210、ivity to the e-boiler and thermal LDES case presented in Figure 24.In this case we can see that,holding all other assumptions and inputs constant,a 3-1 thermal LDES configuration reduces the cost of abatement by another USD 58 per ton of CO2.Negative discounted cash flowPositive discounted cash flow
211、Total discounted cash flow38 Driving to Net Zero Industry Through Long Duration Energy Storage05KEY FINDINGSLDES can already support partial abatement in high-emitting and hard-to-abate industrial sectors such as steel and cement,and has the potential to support net-zero energy1.The large,high-emitt
212、ing steel and cement sectors are considered hard-to-electrify due to their high temperature requirements(1,000C),the need for radiative heat and integration requirements2.While cost barriers exist,medium-term opportunities for thermal LDES technologies could result in a significant reduction of glob
213、al emissions3.Longer-term opportunities for LDES applications require technical improvements and greater scalability but could support complete fuel switching as they focus on the most energy-and emissions-intensive processesHard-to-electrify heatLDES offers game-changing longer-term opportunities i
214、n steel and cement 39 Driving to Net Zero Industry Through Long Duration Energy StorageOVERVIEW AND APPLICATIONSTogether,the steel and cement sectors account for 7%of global emissions(25%and 10%of global industrial emissions,respectively),making them a policymaker focus.The sectors are hard-to-elect
215、rify,meaning they cannot readily be electrified due to high temperature requirements(1,000C),the need for radiative heat and process integration requirements.High costs and a potential lack of scalability across steel and cement plants are another barrier.Current LDES technologies can contribute to
216、limited decarbonization of steel and cement in the medium term(the next five years)through waste heat recovery and preheating36.However,they have far greater decarbonization potential in the long run(10 years+)as costs decline and integration barriers are reduced.LDES could ultimately support full e
217、nergy decarbonization of cement through the electrification of kilns.36 For example,inlet material for steelFIGURE 26Overview of potential LDES applications in existing steel-making routes(simplified)Source:Roland BergerSinter plantIron orePrimary routeSecondary route37 By-product off gases(coke ove
218、n gas,blast furnace gas,basic oxygen furnace gas)are released as part of the chemical process in steel manufacturing and contribute a large portion of steel-making CO2 emissionsCoalCoke plantCokeBlast furnaceBOFPig ironScrapScrapO2Crude steelCrude steelScrapPellet plantIron sinter/pelletsElectricity
219、Heat supplement with hot gas in existing blast furnace Thermal LDES converts grid electricity to heat and/or stores heat,blown as hot gas into blast furnaceWaste heat recycling waste heat from by-product off gases37 recovered,stored in Thermal LDES,recycled for other operational processesHeat supply
220、 for other processes not directly related to steel-making-Thermal LDES converts grid electricity to heat to supply non-steel-making processes,e.g.,moving steel with steam drives,melting,shapingHeat supply for other processes not directly related to steel-making Thermal LDES converts grid electricity
221、 to heat to supply non-steel-making processes,e.g.,moving steel with steam drives,melting,shapingLDES applicationWaste heat recycling waste heat from by-product off gases37 recovered,stored in Thermal LDES,recycled for other operational processesEAF40 Driving to Net Zero Industry Through Long Durati
222、on Energy StorageSTEEL:VALUE PROPOSITION AND FEASIBILITYThermal LDES could support incremental abatement in both major steel-making routes the primary route using blast furnaces(BOF),which accounts for 75%of total steel production,and the secondary route using electric arc furnaces(EAF).Applications
223、 in the“hard-to-electrify”steel-making process are in early pilot or conceptual phase,with commercialization expected in the 2030s.They include waste heat recovery and supplementing heat supply with hot gas.Thermal LDES can also support electrification of lower-temperature heat applications(as discu
224、ssed in Chapter 4)outside of core steel-making.FIG.26LDES technologies also offer attractive solutions in driving partial decarbonization of the steel-making processes beyond the two routes.Depending on the decarbonization pathway,they can continue to provide supplemental heat in furnaces,recycle wa
225、ste heat and supply heat for other processes.Several other decarbonization technologies exist in this segment.The two main alternative pathways to decarbonize steel production are CCUS for BOF or direct reduced iron(DRI).The DRI process uses natural gas or hydrogen to reduce iron ore pellets to dire
226、ct reduced iron(or sponge iron)which is then fed into an electric arc furnace.Most technologies in these areas,including the use of hydrogen,are not well developed but have considerable potential.For example,CCUS systems can capture steel plant emissions and inject CO2 into the ground.However,they c
227、annot achieve full decarbonization as the CCUS process captures most(90%)but not all CO2 emissions.FIGURE 27Overview of potential LDES applications in a decarbonized steel-making route(simplified)Source:Subject-matter experts:industry and LDES;academic studies;Roland Berger38 By-product off gases(co
228、ke oven gas,blast furnace gas,basic oxygen furnace gas)are released as part of the chemical process in steel manufacturing and contribute a large portion of steel-making CO2 emissionsLDES applicationGreen electricityIron orePellet plantIron ore pelletsShaft furnaceSponge ironEAFCarbonSlag,CO2Liquid
229、steelElectrolyzerGreen energyO2H2H2OScrapWaste heat recycling waste heat from by-product off gases38 recovered,stored in Thermal LDES,recycled for other operational processesHeat supplement with hot gas in existing shaft furnace Thermal LDES converts electricity to heat and/or stores heat,blown as h
230、ot gas into blast furnaceHeat supply for other processes not directly related to steel-making Thermal LDES converts grid electricity to heat to supply for non-steel-making processes,e.g.,moving steel with steam drives,melting,shapingOne alternative reduction process:H2-based direct reduced iron Shaf
231、t furnace route41 Driving to Net Zero Industry Through Long Duration Energy StorageSTEEL APPLICATIONSWaste heat recovery:LDES solution:Waste heat is recovered,stored in thermal LDES and recycled for other lower-temperature applications such as preheating scrap(reduces the level of heat required for
232、scrap melting in the electric arc furnace).Waste heat recovery eliminates some emissions and can generate electricity for the plant.Emission and economic impact:Thermal LDES offers an attractive opportunity as the steel-making process is extremely demanding regarding the amount and temperature of re
233、quired heat,and that up to 50%of input energy could be lost during the process.An early-stage project by Tata Steel demonstrates that“a 500 MWht thermal LDES can yield annual savings of 2.3 million GJ of natural gas and 130,000 tons39 of emitted CO2.”40 Outlook:Steel-makers are already working with
234、thermal LDES providers on early stage pilots and demonstrations through 2030 for waste heat recovery;scaling of waste heat recovery technology likely to occur post 2030.Preheating processes using thermal LDES:LDES solution:Thermal LDES converts electricity to heat and then stores this heat before bl
235、owing it directly into the blast furnace.Emission and economic impact:The blast furnace operation accounts for 60-75%of emissions in the overall steel-making process.Heat from thermal LDES can reduce use of fuel and emissions incrementally(total achievable reduction of less than 5%),limited by minim
236、um required levels of coke and coal reductant for chemical reactions.Outlook:As LDES technologies will need to be capable of reaching extremely high temperatures,demonstrations and pilots will likely only be ready in the medium term,with commercialization in the next 10 years.the shaft furnace and s
237、upply heat for non-core steel-making processes.FIG.27STEEL:OUTLOOK FOR LDES TECHNOLOGIESAs well as standalone use,LDES can improve the economic performance of complementary decarbonization technologies if integrated into steel plant design.For example,LDES can play a significant,complementary role i
238、n the green hydrogen-based DRI process.Here,thermal LDES has the potential to recover waste heat for other operations,supplement heat with hot gas in 39 Annual CO2 emissions at the facility are approximately 12.6 million tons per year.40 https:/www.process- Driving to Net Zero Industry Through Long
239、Duration Energy Storage80%53%Calcination process34%Fossil fuelsPreheater/pre-calciner and kiln produce clinkerFIGURE 28Overview of potential LDES applications in cementSource:Desk research,Roland BergerCEMENT:VALUE PROPOSITION AND FEASIBILITYLike steel,cement decarbonization is challenging due to th
240、e need for extremely high production temperatures,and the energy-intensive calcination process(which contributes more than 50%of cement emissions).41 For example,limestone,clay,iron ore and fly ash need to be heated to more than 1,400C in a kiln to produce clinker,which is mixed with limestone and g
241、ypsum to produce ground cement.LDES applications in the sector require technical improvement to meet these challenges.However,they have enormous potential as they focus on the most energy-and emission-intensive parts of the process the preheater/pre-calciner and kiln(FIG.28).LDES technologies can al
242、so support decarbonization of process heat by providing supplemental heat or electrification of cement kilns.Beyond cement,LDES providers are also exploring other rapidly growing,high-temperature materials-processing segments such as lithium and bauxite ore processing.5%3%15%10%100%3,751100%956Raw m
243、aterial preparation into raw millCement production from clinker and final logisticsTotalEnergy MJ/tCO2 kg/tThermal LDES to provide hot gas in existing kilnThermal LDES to provide hot gas in pre-calcinerWaste heat recyclingEnergy stored for e-Kilns41 Calcination process discussed in this section is r
244、elevant to alumina refining sector43 Driving to Net Zero Industry Through Long Duration Energy StorageCEMENT APPLICATIONSWaste heat recovery:LDES solution:Waste heat is recovered,stored in thermal LDES and recycled for other,lower temperature applications or electricity generation.Similar to steel,t
245、his application could reduce incremental emissions in the process.Emission and economic impact:Cement production is also a heat-and emission-intensive process,hence waste heat recovery is a promising opportunity for thermal LDES.The impact of this application will vary by plant and by country,as was
246、te heat recovery infrastructure advances and mandates are different across cement-producing countries.Outlook:LDES providers are conducting early pilots and demonstrations through 2030.Hot gas supply in existing kiln and pre-calciner:LDES solution:Thermal LDES converts electricity to heat,stores hea
247、t and then blows it as hot gas into a kiln or pre-calciner.Emission and economic impact:If commercialized,this application could be extremely impactful as the kiln and pre-calciner consume 80%of total cement process energy requirements,and account for 87%of total process emissions.Outlook:This appli
248、cation has a medium-term potential for use in pre-calciners and long-term for use in kilns.For kilns:Considerable technological improvement is required to meet the extremely high heat requirements in the kiln.With most LDES players still discussing and examining the application with cement producers
249、,commercial implementation will most likely occur beyond the current decade.For pre-calciners:The lower temperature of required heat(900C)in this application is achievable in the medium term,with a commercial timeline of post 2030.Pilots can be done in with necessary technology and plant integration
250、.Energy storage for e-kiln:LDES solution:LDES technologies store grid electricity to operate electric kilns.Emission and economic impact:This technology can provide zero-emission process heat for kilns and other applications in the materials processing industry up to 1,400-1,500C.Outlook:This applic
251、ation is still largely in the conceptual phase.Significant development will be required to make this technology viable in the long term due to the extremely high energy requirement of electric kilns.44 Driving to Net Zero Industry Through Long Duration Energy StorageGLOBAL RELEVANCEGlobal steel and
252、cement production is geographically widespread.The top 5 steel producers by production volume are China,India,Japan,the United States,and Russia.The top 5 cement producers are China,India,Vietnam,the United States,and Turkey.Propensity to decarbonize,as well as baseline emissions,vary across countri
253、es.Steel and cement emissions impact embodied carbon across the global economy.ENABLERSKey enablers in the segment are mainly policy based.Policies such as carbon pricing and greenhouse gas targets can incentivize or otherwise require cement and steel makers to decarbonize.The commoditized nature of
254、 products from these sectors therefore make it important to financially support decarbonization and/or implement carbon border adjustment mechanisms.In addition,as electrification in these sectors increases,it will be important to highlight the need to shift electricity loads and ensure electricity
255、grids can handle the dramatically increased electrical loads through dynamic pricing and network planning.Players in the sectors will look to a suite of technologies,including LDES,to achieve these goals,and will likely require policy-based support to implement them.Specific policy for LDES technolo
256、gies for high-temperature cement and steel will therefore also need to be developed.Sandboxes and R&D support can enable early demonstrations of both LDES and complementary technologies such as e-kilns.In addition to policy,there is a need to communicate and demonstrate the LDES value proposition to
257、 industry,through early engagement and partnerships.Shared learnings within industry can help to accelerate decarbonization and the role of LDES.45 Driving to Net Zero Industry Through Long Duration Energy StorageSupporting policy mechanismsPolicy solutions for LDES need to encourage adoption and co
258、mpetitiveness06KEY FINDINGSLong duration energy storage technologies require policy support to ensure that industrial users capture the full value of these resources1.The appropriate policy solution for LDES technologies to decarbonize industry varies by industry sector.Solutions fall into three cat
259、egories:long-term market signals;revenue mechanisms;and technology support and enabling measures2.Off-grid applications are already cost effective and require the least support relative to other applications3.On-grid heat applications that can be electrified today and hard-to-electrify sectors requi
260、re policies that incentivize industrial customers to electrify their fossil-fueled heat processes and ensure that electric grids can support larger electricity loadsDriving to Net Zero Industry Through Long Duration Energy Storage46 POLICY SOLUTIONSAccelerating the adoption of LDES technologies for
261、industrial decarbonization requires a broad range of policy solutions.To reflect this,the Long Duration Energy Storage Council has developed a policy framework.It consists of three policy enabling tiers covering long-term market signals,revenue mechanisms and direct technology support and enabling m
262、easures.FIG.29Each of the three policy enablers contains a subset of levers that will support industrial decarbonization applications.Their relative importance to individual sectors and regions depends on decarbonization ambitions,market conditions,barriers to adoption and technology readiness.FIG.3
263、0FIGURE 29Overview of LDES policy framework42Source:LDES CouncilLong-term market signalsInform the trajectory of the energy systemCarbon pricing&green-house gas reduction targetsProcurement targetsGrid planningRenewable energy targetsPhase-out of fossil fuel subsidiesStorage capacity targetsRevenue
264、mechanismsCap and floorCapacity marketNodal&location pricingRegulated asset baseHourly energy attribute certificates24/7 clean PPAContract for differenceLong term bilateral contract for balancing/ancillary servicesEnhance the viability of projectsTechnology support and enabling measuresGrants and in
265、centivesInvestment de-risk mechanismsSandboxesMarket rulesTargeted tendersTechnology standardsCreate pathways for access and uptake42 For further detail,see LDES Councils“Journey to Net Zero”report:https:/ Driving to Net Zero Industry Through Long Duration Energy StorageOFF-GRID ELECTRICLDES is alre
266、ady an economically attractive decarbonization solution for off-grid industry that faces few barriers.Savings are achieved by substituting renewables and LDES technologies for diesel fuel.Policy support in this sector should therefore be related to long-term market signals,specifically to eliminate
267、government support for fossil fuels.Fossil fuel subsidies undermine the case for LDES because the cost-benefit analysis is highly sensitive to the price of diesel.GRID-CONNECTED ELECTRICThe most important levers for on-grid electricity applications are revenue mechanisms,as well as technology suppor
268、t and enabling mechanisms.Grid-connected electricity customers already respond to long-term price signals for the lowest cost electricity they can find.However,policy support is still needed to ensure access to cheap,decarbonized electricity,which is where nodal and locational pricing can be helpful
269、.FIGURE 30Relative importance of LDES policy enablers by sectorSource:Roland BergerLong-term market signalsRevenue mechanismsTechnology supportDetailLDES policy enablersOff-grid electric Elimination of government support for fossil fuels Fossil fuel support undermines decarbonization and LDES econom
270、icsHard-to-electrify heat Support enabling development and demonstration of LDES technologies for high-temperature processesGrid-connected electric Wholesale market access with nodal&locational pricing Contract for differences renewable PPAs Market revenue streams to improve LDES economicsEasy-to-el
271、ectrify heat Transparent electricity price signals for load shifting Contract for differences renewable PPAs Emissions reduction mandates and carbon prices Market revenue streams to improve LDES economics Grid planning to support large,newly-electrified loadsRelative importanceHighLow48 Driving to N
272、et Zero Industry Through Long Duration Energy StorageEASY-TO-ELECTRIFY HEAT AND HARD-TO-ELECTRIFY HEATPolicy support could be most impactful in enabling LDES to support heat decarbonization.Policies can address industrial customers propensity to electrify process heat and ensure that electric grids
273、can handle the dramatically increased electrical loads from these processes.First,industrial customers need to be motivated to decarbonize,they need transparent electricity price signals to demonstrate the value of load shifting to customers,and they need proof that LDES solutions are a feasible rep
274、lacement to their incumbent(and trusted)fossil-fueled processes.Policies to support the above include carbon pricing and greenhouse gas targets,nodal and locational pricing and sandboxes,or pilots and demonstrations.Given the price pressure due to the commodity nature of their products,they will als
275、o need contracts for differences,to ensure they are made whole for differences between renewable PPA and wholesale energy prices.Policies will also need to encourage electric utilities and transmission operators to prepare for electrification of large industrial loads.They will need better grid plan
276、ning to ensure adequate network capacity and to integrate the required amount of carbon-free electricity so that industrial customers are assured of reliable supply.43 Hard-to-electrify heat will also require technology support in the form of sandboxes and standards,given that LDES technologies for
277、high-temperature cement and steel will need to be developed,demonstrated and implemented.43 LDES technologies can also support transmission network planning by reducing peak demand from large industrial load on the electric grid49 Driving to Net Zero Industry Through Long Duration Energy StorageAppe
278、ndixDriving to Net Zero Industry Through Long Duration Energy Storage50 OVERVIEW AND APPLICATIONSLDES technologies support decarbonization of already electrified grid-connected facilities in two ways.First,by providing reliability,and second,by time-shifting renewable generation to enable a decarbon
279、ized electricity supply(and even a true 24/7 decarbonized electricity supply)44,potentially also creating bill savings by capturing differences in hourly electricity prices(time-based arbitrage).This includes support for grid-connected facilities that are“islanded,”which means they can turn their gr
280、id connection on or off,functioning as microgrids.Data centers are a prime example of such electrified grid-connected facilities.They range in size from localized“edge”data centers with small electricity demands(100s of kWe)to hyperscale data centers with massive electricity demands(100s of MWe).Due
281、 to corporate commitments,data center providers will increasingly aim to not only satisfy decarbonized electricity demand but also meet true 24/7 time-matched decarbonized electricity demand.Data center deployments and their corresponding electricity load are expected to drastically rise to support
282、increasing data traffic from cloud computing,5G communications,and artificial intelligence.Overall,data centers are expected to consume nearly 1,000 TWhe by 2025,a figure which is expected to triple by 2030.This trend will be especially pronounced in developing economies as they have been slower to
283、adopt computing relative to industrialized economies.FIG.31Appendix A:Data centersKEY MESSAGE AND SUMMARYLDES enables data centers to optimize their use of renewable energy and enhance reliability1.LDES technologies enable high load factor,grid-connected electric industrial facilities,specifically d
284、ata centers,to decarbonize their electricity supply2.When LDES is deployed in this manner,such facilities also benefit from improved reliability,whose value would otherwise not be enough to justify LDES capital costs3.In geographies with very low cost renewable electricity,LDES is the lowest-cost op
285、tion for firm,decarbonized electricity at data centers 44 The heat demand sectors highlighted in Chapter 4 that have already electrified operations fall into this category.Data centers are also included in it and present large,high load factor electricity demands along as well as having extremely hi
286、gh uptime requirements.This means they place a very high value on reliability of supply.51 Driving to Net Zero Industry Through Long Duration Energy StorageFIGURE 31Overview of data center infrastructureSource:Roland BergerServersEngines of the data center includes the processing and memory used to
287、run the applicationsNetworksIncludes the cabling,switches,routers and firewalls that connect the servers to each other and to the outside worldSecurity systemsIncludes environmental control systems like fire suppression,ventilation and cooling systemsUPS45 transition systemsUPS systems are short-ter
288、m energy storage devices that are used to ensure uninterrupted data center operationBackup power generatorsProvide an emergency or alternative power source when the main power source is interruptedMedia storageSoftware designed storage technologiesUtilityGeneratorTransfer switchUPS45CoolingCritical
289、IT loadOther loadsComponentDATA CENTER INFRASTRUCTURE OVERVIEWDescriptionPotential LDES applications ArchitectureSupport45 Uninterruptible Power Supply52 Driving to Net Zero Industry Through Long Duration Energy StorageToday,data centers ensure reliability using diesel generators,presenting an oppor
290、tunity for LDES to store cheap renewables power and discharge when required.VALUE PROPOSITION AND FEASIBILITYThe ability of LDES to support decarbonization of grid-connected facilities depends on the availability of cheap renewables and required transmission infrastructure.In the case of reliability
291、,the economics are not yet attractive.Generation for reliability has a very low capacity factor(for example,1%capacity factor for a facility facing eight 10-hour outages per year).Given this,the volume of avoided diesel expense(purely for reliability)is lower than LDES capital costs and the costs as
292、sociated with charging the LDES system with green power.Renewable diesel and green H2(fuel cell)are technically lower-cost decarbonization alternatives for reliability only.However,both currently face feasibility roadblocks:they are scarce(due to competition with higher value transportation applicat
293、ions)and come at a significant price premium.LDES is economic for decarbonization of electricity supply,provided renewable electricity prices result in savings high enough to offset LDES capital costs.In summary,LDES is the lowest cost decarbonized solution today.However,LDES paired with renewable p
294、ower faces a future threat from SMRs given their ability to provide reliable carbon-free on-site power(although SMRs face feasibility challenges,as mentioned earlier in this report).If already installed,then the reliability benefits of LDES are a bonus and enable full decarbonization(assuming grid o
295、utages occur).GLOBAL RELEVANCEIn places where renewables costs are low,LDES is the lowest cost of abatement option overall.Data center providers already site facilities in locations with lower power prices,meaning the attractiveness of LDES to support decarbonization of electricity supply and reliab
296、ility is particularly relevant.ENABLERSLDES adoption will be in large part driven by market influences,with many data center providers having made aggressive decarbonization commitments that necessitate LDES.Additionally,increased regulation for high data center reliability in light of growing risks
297、 to grid reliability would drive LDES deployment at data centers.Policy restricting data center deployment could pose a potential risk by limiting data centers from being established in areas with low-cost renewables.53 Driving to Net Zero Industry Through Long Duration Energy StorageRoland Berger d
298、eveloped an analytical model that estimated the impact LDES technologies can have on off-grid and process heating applications.At a high level,the tool estimates customers status quo energy costs and emissions levels and compares them against energy costs and emissions levels after integrating LDES.
299、For Chapter 3,the comparison is between the cost and emissions from using diesel for plant operations and equipment,and renewable generation firmed by LDES.For Chapter 4,the comparison is between the cost and emissions of natural gas-fueled process heating,and an electrified solution supported by LD
300、ES.Roland Berger ascribed a positive cost of abatement when the cost to decarbonize is greater than the status quo,and a negative cost of abatement when the opposite is true.ANALYTICAL OVERVIEWThe analytical model used for this report evaluated customer energy needs,customer energy costs and billing
301、 factors,and the potential financial and emissions impact of utilizing LDES technologies by simulating the operation of these resources based on their unique operating parameters.FIG.32Appendix B:Analytical approachFIGURE 32Detailed schematic of analytical modelTechnoeconomic analysisLong Duration E
302、nergy Storage solutionTechnoeconomic analysisCustomer energy requirementsTechnoeconomic analysisCost of abatementSource:Roland Berger54 Driving to Net Zero Industry Through Long Duration Energy Storage1.Customer energy requirementsThe tool incorporates inputs and assumptions related to customer ener
303、gy needs including the following:Load shape Baseline demand in MW Annual energy consumption(in gallons of diesel fuel,MCF of natural gas or MWH)Required service level/load factor2.Current state energy solution:Chapter 3 Generator type and heat rate Chapter 4 Boiler type and efficiency Other fossil-f
304、ueled processes or equipment,for example,ICE trucks that can be electrified3.Country-specific energy attributes:Retail/wholesale electricity rates(including transmission fees)PPA prices,REC prices Grid emissions factors Solar and wind generation profiles and costs(capital and operating)Fuel prices(d
305、iesel,natural gas,green hydrogen,nuclear)Outage frequency and durations Carbon prices 4.Long Duration Energy Storage solution:Financial metrics-Capital cost-Operating costs Operating parameters-Depth of discharge-MWH duration-MW power-Charge-discharge ratio-Round Trip Efficiency-Degradation-Useful l
306、ife5.Technoeconomic analysis Compared the status quo customer energy demand,emissions and cost to the decarbonized solution supported by LDES 6.Cost of abatement Calculated in USD/ton of CO2 All facilities seek to fully decarbonize(99+%reduction of scope 1 and 2 emissions)-The analysis assumes carbo
307、n accounting on a total annual basis as opposed to being time-matched Alternatives analyzed relate to the decarbonization of electric and heat demand for specific processes All projects are assumed to be brownfield,meaning the costs for existing status quo technologies are sunkAs described in Chapte
308、r 2,variations across countries depicted in this report reflect differences in country-specific:Retail and wholesale electric prices PPA prices REC prices Grid emissions factors Solar and wind generation profiles and costs (capital and operating)Fuel prices(diesel,natural gas,green hydrogen,nuclear)
309、Outage frequency and durations Subsidies Carbon prices.55 Driving to Net Zero Industry Through Long Duration Energy StorageMETHODOLOGICAL DETAILThe main assumption for this report is that facilities fully decarbonize their Scope 1 and 2 emissions.The analysis also assumes that carbon is accounted fo
310、r on an annual basis,which means it is not time-matched.An assumption underlying this entire analysis is that facilities are fully 100%decarbonizing scope 1 and 2 emissions.Decarbonization analysis assumes carbon accounting on a total annual basis as opposed to being time-matched.This is key as ther
311、e is a significant cost difference between fully decarbonizing and partially decarbonizing,e.g.,90%.The incremental cost of decarbonizing the last,e.g.,10%of emissions is significantly higher than the e.g.,first 10%.The analysis highlights decarbonization via one primary pathway for each solution,me
312、aning accomplishing e.g.,90%decarbonization via procurement of renewables and decarbonizing the remaining 10%with hydrogen or other zero carbon fuels was not modeled.Thus,decarbonization via electrification and procurement of zero carbon electricity was the pathway modeled for LDES solutions.Electri
313、fication of mining operations is highlighted in the case in Chapter 3 and decarbonization of heat(and power)is highlighted in the case in Chapter 4.All projects are assumed to be brownfield,meaning the costs for existing status quo technologies are sunk.Moreover the alternative technologies modeled
314、relate to the specific electricity and heat requirements of the existing brownfield processes and costs relating to retrofitting these existing processes and not operations as a whole are accounted for.Technologies were sized with respect to each facilitys electric and heat demand.LDES in particular
315、 was sized based on relative economics of LDES capex and opex with respect to reliability needs and cost of renewables(either procured via PPAs or RECs or via onsite renewables incurring capex and opex).For the off-grid case study in Chapter 3,LDES(and onsite renewables)were sized to yield the lowes
316、t combined capital and operating costs while meeting the facilitys electric demand.As highlighted in the previous paragraphsFor on-grid(Chapter 4),LDES was sized to yield the highest possible electricity bill savings relative to its capital and operating costs.In the aforementioned Chapter 4,a sensi
317、tivity on thermal LDES configuration with respect to charge-discharge ratio was conducted by evaluating the economics of a 3-to-1 standalone thermal LDES system,see Figure 21.Electricity expenses in this chapter stemmed from either utility rates and REC prices collected for each geography or histori
318、cal wholesale power prices and PPA prices.PPA were assumed to be renewable PPAs with a contract for differences,pay-as-produced structure.This PPA structure was selected as it allows the offtaker to take on the most price risk and,thus,have the greatest opportunity to generate savings via price arbi
319、trage enabled by LDES.Once technologies are appropriately sized and all variables above including costs are accounted for,the decarbonized solutions were compared to the status quo via discounted cash flows(DCF).This approach accounts for all technical and economic parameters impacting the 20-year c
320、ost of energy supply for each facility and enables a like-for-like comparison between different decarbonization technologies.These DCFs were unlevered and pre-tax and were calculated on a 2023 real USD basis using a weighted average cost of capital(WACC)of 7.5%.46 As mentioned in Chapter 2,each solu
321、tions current and future economic viability was analyzed by 46 10%WACC assumed;functionally,this WACC represents the cost of debt given DCFs were unlevered;2.5%subtracted from 10%to remove the effect of inflation(DCFs calculated on a 2023 real USD basis)56 Driving to Net Zero Industry Through Long D
322、uration Energy Storagelooking across a 20-year period with project start years in 2023,2030,and 2040 across all geographies.Three DCFs were calculated for each combination of solution,year,and country:one for the facilitys status quo,one for the decarbonized solution at that facility,and one for the
323、 delta between the status quo and solution(status quo subtracted from solution).The delta between the two respective DCFs yielded a cost of decarbonization in absolute real USD terms.This cost of decarbonization was then divided by the NPV of CO2 emissions,yielding a cost of abatement in real USD/to
324、n CO2.DCF line items included both annualized expenses fuel expense,electricity expense,lost load expense,emissions,carbon tax expense(calculated based on scope 1 emissions only),and technology opex and a capex for new technologies in year 0.As highlighted in Chapter 2,variations across countries de
325、picted in this report reflect differences in country-specific input retail and wholesale electric prices,PPA prices,REC prices,grid emissions factors,solar and wind generation profiles and costs(capital and operating),fuel prices(diesel,natural gas,green hydrogen,nuclear),outage frequency and durati
326、ons,subsidies,and carbon prices.CALCULATION OF ADDRESSABLE EMISSIONSThe addressable emissions for LDES were calculated using data from the European Unions Emissions Database for Atmospheric Research,International Energy Agency,Germanys Federal Geothermal Association(Bundesverband Geothermie),and Ene
327、rgy Innovation and Policy,the San Francisco climate research firm,and Roland Berger.The Emissions Database for Atmospheric Research provided estimates of total global industrial emissions.The International Energy Agency provided estimates on the share of emissions by industrial sector.Data detailing
328、 process heat requirements for these sectors were provided by Germanys Federal Geothermal Association and Energy Innovation and Policy.The specific calculation started with total global industrial emissions which were then allocated to specific sectors.Emissions were allocate further based on proces
329、s heat temperature requirements provided by the Federal Geothermal Association and Energy Innovation and Policy.Addressable emissions include all electric consumption as well as processes requiring temperatures of 500 C and below.57 Driving to Net Zero Industry Through Long Duration Energy StorageTe
330、chnical assumptions for LDES technologies were sourced from publicly available databases and Roland Berger proprietary data,and were validated by LDES Council members who provided their own benchmarks.Roland Berger modeled the performance of LDES technologies within the families outlined below,whose
331、 specific values for capacity,round trip efficiency and cost have been aggregated to ensure confidentiality and non-attribution.Price assumptions for other technologies evaluated in this report are listed in Figure 33:Appendix C:Technologies Technical and cost assumptionsFIGURE 33Technology input as
332、sumptionsTechnical assumptions47 Cost assumptions shown here correspond to a 24-hour duration 48 Capital cost-Unit for corresponding technology indicates whether Fixed OPEX is in USD/kWe or USD/kWtSource:PNNL,NREL,Expert interviews,Roland BergerCost assumptions47EfficiencyRTE%Technology90%-96%LDES T
333、hermal50%-80%LDES Mechanical60%-85%LDES ElectrochemicalCapital cost20302040UnitOperating cost USD/kW48-year20232030204050-10030-48USD/kWht13131150-6150-61USD/kWhe161-201USD/kWhe22201857-6938-46USD/kWhe20171330%-50%LDES Chemical58 Driving to Net Zero Industry Through Long Duration Energy StorageAppendix D:Case study approach and status quo assumptionsCase studies are intended to reflec