India’s Next Energy Transition: To Electrify Industrial Heat

Syllabus: GS3/Economy

Context

• India’s next phase of energy transition must focus on electrifying industrial heat which can help scale the transition and strengthen manufacturing competitiveness.

About

• Renewable-powered Sectors: Electric mobility is replacing internal combustion engines, agriculture is increasingly powered by solar irrigation, and buildings are adopting smarter appliances. 
• The next phase lies in electrifying industrial heat, particularly across India’s MSMEs, to strengthen manufacturing competitiveness, energy security and decarbonisation.
• India’s solar photovoltaic revolution reduced solar tariffs by more than 85% over the past decade through a coordinated ecosystem of supportive policies both at the national and state level.
  • Now, scaling industrial heat electrification will require a similar approach.

Industrial Heat Electrification

• Industrial heat electrification is the process of replacing fossil-fuel-based heat generation in industrial processes (such as burning natural gas, coal, or oil) with technologies powered by electricity. 
• When that electricity comes from low-carbon sources like wind, solar, hydro, or nuclear power, it can significantly reduce greenhouse gas emissions.

Factors Supporting Industrial Heat Electrification

• Large Consumption of Energy: The Industrial Sector accounts for almost half of India’s final energy use. Over 40% of that energy is coal that manufacturers burn onsite, creating severe air pollution and public health impacts.
• Dependence on Imported Energy: A 27% is from petroleum and natural gas, heavily imported fuels that typically cost 4-4.5 times more than coal per unit energy, and can soar even higher in price during global supply chain shocks.
• Clean Energy Targets: India is the 7th most vulnerable country to climate change and the 3rd largest emitter of climate-warming CO2. 
  • Because of this, in 2021, India committed to reach net-zero emissions by 2070. 
  • Cleaning up India’s vast and growing industrial sector will play a major role in achieving that goal. 
• Availability of Solar Energy: India has the lowest solar prices among major economies. By switching to solar energy, and to commercially available electric technologies like heat pumps and thermal batteries, Indian industry can slash its costs, cut its energy use, and deliver clean air.
• Cost Effectiveness: Electrified heat is also cheaper than coal-based heating in three out of five temperature bands (<100°C, 100-200°C, and 1,000-1,800°C), which together account for 55% of India’s combustion-based industrial heating. 
• Reduction in Energy Use: Electrification can reduce industrial energy use by 22% and cut over half of the sector’s CO2 emissions when backed by clean energy. 
• Environmental and Health Gains: Industrial electrification can also reduce sector-wide emissions of non-GHG pollutants, cutting particulate matter (PM2.5) by 38%, sulfur dioxide (SO2) by 60%, and nitrogen oxide (NOx) by 53%.
  • By avoiding those air pollutants, electrifying all eligible industrial processes in India can save nearly 794,000 lives annually while also halving the incidence of numerous nonfatal health complications. 

How Can it be Achieved? 

• Facility-level Engineering Assessments should become the foundation of industrial heat electrification. Without robust engineering assessments, industries risk investing in technologies unsuited to their process requirements.
  • These assessments can support district-level industrial decarbonisation plans tailored to local industrial profiles, renewable resources, and infrastructure readiness.
• Technology-inclusive Approach: Industrial processes vary widely in temperature, production schedules, and thermal demand. So a single technology solution is impractical.
  • Thermal energy storage solutions can act as thermal buffers by storing surplus heat generated when renewable electricity is abundant and releasing it when process heat is required.
• Access to Capital: Reforms should focus on reducing costs by streamlining open-access procedures, rationalising banking provisions, reducing transactional complexity, and strengthening grid infrastructure. 
• Renewable electricity planning should be integrated with industrial electrification, enabling industries to align thermal demand with periods of renewable generation.
• Engineering Transition: Scaling it requires a workforce of engineers, technicians, and operators with capabilities in process integration, system design, installation, commissioning, operation, and maintenance, and digital automation and control systems.
• Demonstration Projects: India needs demonstration projects before it needs large-scale mandates. This will generate engineering evidence, validate business models, and reduce investment uncertainty. 
• National Framework: Industrial heat electrification needs a coordinated national framework supported by place-based implementation. 
  • It should establish engineering standards, designate institutional responsibility, facilitate demand aggregation, mobilise finance, and support early demonstration projects. 

Conclusion

• With its record-low solar prices and limitations on fossil fuel use, India has a unique opportunity to be a global leader in the clean industry. 
• With targeted policies and deployment efforts, India can reap the economic, environmental, and public health benefits of the solar-powered industry and set its economy up for success for decades to come. 

Source: TH