Accelerating Decarbonisation: NESO's urgent call for action and the role of energy-intensive industries

The UK’s national energy system operator NESO articulated the need for pace in every aspect of its mission to decarbonise power by 2030: a welcome acknowledgement accompanied by recommendations for implementation that would ramp up the build and connections rate of energy generation and infrastructure.

Energy intensive industries will also be pivotal to reaching the UK’s net zero targets, and the technologies and energy system developed over the next six years will inform the ease, cost and feasibility of industry to rapidly reduce emissions and maintain a balance between the dual priorities of commercial growth and decarbonisation. Whilst the electricity grid and wider Industrial Strategy will create the framework for industry, identifying the best routes to net zero industry is vital to inform both business plans and system delivery.

In 2023 AtkinsRéalis delivered the Industry of Future Programme Scoping Study (IFP) for the Department of Energy Security and Net Zero (DESNZ). The £1.58m IFP study was a government initiative, funded by the £1bn Net Zero Innovation Portfolio (NZIP), aimed at spearheading decarbonisation of UK industry by investigating the commercialisation of deep decarbonisation and energy efficiency technologies. The purpose of the study was to work closely with Industrial companies to produce decarbonisation roadmaps for dispersed industrial sites to achieve net zero by 2050.

The 15 industrial sites that participated in the programme were selected via an open competition. The sites were split between seven sectors: chemicals, paper, minerals, food, water, transport, and pharmaceuticals. The IFP focused on sites with carbon emissions above 10 ktCO₂/y that were located outside of industrial clusters, known as dispersed sites.  Through site visits and close analysis of site emission data, different potential roadmaps were produced for each site using energy efficiency technologies, electrification of key processes, heat and energy and use of hydrogen or carbon capture technologies.  The roadmaps considered factors including CCUS and hydrogen cluster access, electrical grid constraints, site location, planning constraints, impact on local communities and site preference.

Of the 49 roadmaps produced for the 15 sites, 39 met the ultimate 2050 emissions target of 90% reduction in CO₂ emissions. A considerable number did not meet the interim targets, with 20 roadmap options missing the 2035 target, primarily due to low technology readiness levels (TRLs) of certain deep decarbonisation measures and constraints around external infrastructure, primarily for the electricity grid, hydrogen and captured CO₂.

With considerations to the assumptions and constraints used in the study, the financial cases for the roadmaps are generally unfavourable within the current economic climate. Only 14 of the 49 roadmaps are expected to payback by 2050. Within the study a fixed cost was applied to each tonne of CO₂ produced by sites which fall under the current UK Emissions Trading Scheme (ETS), however no further financial incentives such as Contract for Difference (CfD) were applied.

Beyond the challenges identified in the report for each individual site, there have been several other important findings and subsequent recommendations identified throughout this study:

• The existing electricity grid is not currently considered fit for achieving net zero by 2050 – the efforts by NESO, Government and industry to address this at pace are welcome.
• Dispersed sites face challenges that sites within industrial clusters are more likely to be insulated against, primarily infrastructure access to the electricity grid, hydrogen and captured CO₂.
• In the case of hydrogen versus electrification for dispersed sites, electrification was more consistently found to be the attractive option when considering cost and practicality of implementation. Generally, electrification technologies are better developed (higher TRLs), cheaper to run, easier to integrate on-site and present fewer safety concerns. Hydrogen could in many instances achieve a deeper level of decarbonisation, although these gains were often marginal and abatement costs were far greater. To offset the advantages of electrification, the future cost of hydrogen would have to be far more competitive than what is currently forecast. Of the 15 sites in this study only 3 found hydrogen solutions preferable to electrification.
• Sites with carbon emissions or CO₂ equivalent emissions inherent to their process (e.g. wastewater, steel, cement/concrete) will require a different approach to achieve zero emissions than those sites which primarily require fuel or electricity for heat, calcining processes, operation of machinery and plant operations.

The IFP report provides a basis for the Government to collaborate with dispersed sites, allowing a deeper understanding of what the key barriers are to decarbonising dispersed sites.

As the national pathway to net zero is cemented, it will be vital that short term decisions made to 2030 ensure the right frameworks, funding and wider infrastructure and technologies are developed to ensure the most efficient roadmap to industrial decarbonisation by 2050 and beyond

For more information, read the full Industry of Future Programmes report.