Decarbonising process heat is not only essential for businesses, industry and government to achieve net-zero targets, but it will also be key to maintaining competitiveness in a low-carbon world.
Industry is responsible for around 44 per cent of Australia’s final energy consumption, with 52 per cent of that being used for process heat (ITP Thermal 2019).
Given 70 per cent of that is sourced from fossil fuels, the decarbonisation of industrial process heat presents both a major challenge and opportunity.
Australian Alliance for Energy Productivity (A2EP) CEO, Jarrod Leak, said traditionally many options for decarbonising industry process heat have been unable to compete on financial terms.
To address this issue, the Australian Renewable Energy Agency (ARENA) engaged the Australian Alliance for Energy Productivity (A2EP) to conduct studies identifying opportunities to accelerate the adoption of renewable energy in industrial and commercial process heating.
Twenty pre-feasibility studies and seven feasibility studies were completed covering a wide range of food, beverage and industrial processes to consider the suitability of renewable energy options for these applications, giving particular consideration to industrial heat pumps.
The pre-feasibility and feasibility studies demonstrated that industrial heat pumps are economically and technically feasible for low temperature ((<90 ˚C) heating applications.
A higher capital cost per thermal kilowatt (compared to traditional boilers) to install a heat pump has been a key impediment to heat pump adoption in Australia.
As part of the studies undertaken by A2EP, Leak assessed the financial performance of different heat pumps applications.
“For heat demands below 90 ˚C, heat pumps were determined to be technically feasible, provided that the right site-specific factors were in place, such as sufficient space for the heat pump and thermal battery and sufficient electrical capacity at the site,” he said.
“Poor cost comparison between heat pumps and conventional boilers is often due to the boilers historically being sized for peak demand with much higher rates of heat loss.
“Then there is often an assumption that a heat pump will need to have the same capacity as the boilers being replaced.
“Combine these assumptions with the higher cost per kilowatt of capacity of heat pumps and they are quickly a distant second (or third) choice for replacing existing equipment,” he said.
“We found that a heat pump with as little as 50 per cent capacity of the conventional boiler it is replacing can often perform the same services while offering additional benefits and delivering payback in less than three years.”
Leak said there is a serious lack of energy and heat data available. For example, with natural gas consumption this information is only available in monthly bills.
“Steam consumption was often only available for the entire boiler not for the individual processes that used the steam. Similarly, data for hot water consumption was often not available at a granular enough level,” he said.
“Good energy data that shows the daily heating demand peaks across all heat demands, allows for accurate mapping of heating needs which gives optimal sizing of the heat pump and thermal battery.”
Leak said there is also a lack of waste heat mapping which can identify opportunities to reduce the size of the heat pump.
He said a typical process plant will have a single, centralised boiler system supplying heat at one temperature ( e.g. steam at 185 °C).
“However, that approach is not optimal when considering heat pumps. A process plant with heat demands ranging from 60 °C to 150 °C may best be served by a range of smaller solutions,” Leak said.
“For example, an air-sourced heat pump may be best to serve the 65 °C heating needed for hot water washing, then a water-source heat pump using waste heat from a refrigeration plant may be best to serve the 85 °C heating needed for a pasteurisation process, and then another technology may be best to serve a need for 150 °C heating in a cooking process.
“Using a combination of heating solutions can provide the lowest overall energy demand and the best utilisation of renewable energy sources.”
For sites with historically large natural gas usage relative to electrical consumption, it is likely that moving from solely natural gas for heat to a heat pump may create capacity constraints which would incur high upgrade costs.
Leak said this can be mitigated with a thermal battery to reduce peak loads as well as on-site solar PV production.
With the increasing penetration of renewable electricity in the National Electricity Market, Leak said technologies that are capable of demand flexibility will become increasingly important.
While a heat pump is not capable of being turned on and off like a light switch, it can be scheduled to come on during times of low (or negative) electricity tariffs or high solar PV production to soak up renewable electricity in a thermal battery which can then be despatched as it is needed.
“The heat pump can also be turned off if needed to help provide electrical grid resilience and stability as well as optimising on-site electricity costs,” Leak said.
The necessary transition to non-fossil fuel process heating technologies is still in its infancy.
While heat pump technology is very mature for space heating and domestic hot water heating, it has not been thoroughly developed for other sectors and applications.
“These studies have shown the technical and economic viability of heat pumps for renewable process heating across a range of manufacturing sectors,” Leak said.
“The lessons learned from these process heat studies will help reduce barriers for adoption of heat pumps and help to guide the suitability of different renewable process heating technologies.
“The main barriers identified to adoption relate to replacing the traditional approach to sizing of heating utilities with a data-driven, integrated approach which utilises a thermal battery to minimise the heat pump CapEx and utilises waste heat to minimise the operating costs. “
In the absence of decarbonisation commitments, Leak said the economic performance of a heat pump investment will slow the adoption of the technology, unless existing white certificate schemes or new ones are utilised.
There is a long journey ahead before heat pumps are fully accepted as a viable process heating alternative.
“Energy users are yet to fully understand heat pump technology across the entire asset life cycle, from installation and commissioning to operation, optimisation and maintenance,” Leak said.
“For many companies, the installation of a heat pump will be a one in 10-year event so they may not have past experience to guide them.
“They will rely heavily on publicly available information, training courses, skillful advisors and a competitive market of heat pump suppliers.”
To support ongoing improvement across the entire technology life cycle it will be essential to create and support networks that foster continuous improvement for the technology.
Leak said these networks can also support the development of heat pumps that operate at higher temperatures (>100 °C) which are currently in the pilot and demonstration stages.
“To support the ongoing adoption of the technology, the development of white certificate schemes to reward businesses for decarbonising will likely be needed to accelerate the adoption of the technology. Further investigation is required for the optimal intervention and incentives needed from such schemes,” he said.
Note: Jarrod Leak joined the Australian Alliance for Energy Productivity (A2EP) as Chief Executive Officer in 2020 after a long career with Swedish engineering company, Alfa Laval. Leak has a great depth of experience across a range of industries, with significant expertise in implementing innovative technology-based sustainability and energy productivity solutions.
(This is an edited version of a paper presented by Jarrod Leak at the EnergyNext conference in Sydney).