A while ago I had the opportunity to sit down for 90 minutes with Dilip Chandrasekaran, engineer, materials science PhD, and SVP of industrial heat leader Kanthal. That firm has electric heat products and experts who help industrial clients transform their processes to use them, resulting in decarbonization and profit gains.
But above 200° Celsius, heat pumps don’t cut it. That’s where Kanthal comes in. A core product set of theirs is resistance heating materials that go from 500° to 2,000° Celsius, well into the upper end of industrial heat requirements.
Chandrasekaran makes the point that electrification with resistance and other technologies is usually more efficient. Current processes that burn fossil fuels typically heat up a great deal more of the air and infrastructure than an electric solution. If 10 MW of heat is provided by natural gas today, often only 5 MW of electricity is required to replace it.
Much of the first half of our conversation deals with the reasons why electricity isn’t used a lot more in industrial heat given the advantages. A big reason he points to is the low price of natural gas in the 2000s and 2010s. He admits that even Kanthal converted some of its processes to gas in the early 2000s for economic reasons, and then converted it back recently.
Cognitive challenges which I highlighted in an article from a while ago get some airing as well. The first he points out is the availability bias. Many people don’t see any major industrial heating with electricity, so they don’t think of it as an option. Another we discussed is tribalism, where the industrial operations team asks their long-term gas supplier about how to decarbonize, and obviously doesn’t get an answer about electrification, and often even anti-electrification FUD.
But there are reasons that are more valid. One is that electrification often or even usually requires technical and process changes. It’s often not possible to simply swap out a fossil heating component with an electric component.
Hydrogen gets some attention as well. He sees a lot of discussion about it, but doesn’t get it from a costs and thermodynamics perspective. He’s a steel expert and sees hydrogen as having strong value for reduction of iron ore, but not process heat. He considers it very useful to ask who is pushing hydrogen heating options to find out if there are agendas unrelated to useful and economically viable decarbonization.
Chandrasekaran steps through the iron and steel making processes. He notes that the largest source of CO2 emissions is from coal and natural gas fired blast and open hearth furnaces. He comments on direct reduction of iron (DRI) using natural gas, and supplementing that with hydrogen being an emerging process. He understands that there are metallurgical concerns about the use of hydrogen that are being addressed. He’s also obviously aware of the HYBRIT process, but knows it’s not scaled yet.
In context of scrapping, he points out two concerns. The first is that scrapped steel run through electric steel minimills using electric arc furnaces (EAF) is more challenging to turn into higher quality steel and the number of specialized alloys with specific characteristics produced now. Also of concern is whether there is sufficient steel that can be scrapped to provide feedstocks for further growth.
One key thing he says about the scrap steel route is that while we have perhaps 5,000 alloys today, it’s quite probable that we can make do with fewer alloys, making tradeoffs of perfect steel characteristics for decarbonization. Thinking differently about the problem will be required.
In my subsequent projection of steel demand and processes through 2100, those insights are part of why I arrive at a maximum of 75% of steel supply coming from scrap.
Next on his list of challenges to clean steel is that scrapping and decarbonized new steel will all require a lot of low-carbon electricity. Iron and steel that isn’t from scrap is made with energy from coal or natural gas for the most part, and as we shift more to low-carbon DRI like the Midrex solution, pure hydrogen processes like HYBRIT, and molten oxide electrolysis processes like Boston Metals, electricity demand shoots up.
In Sweden, that’s not a concern as they get their electricity from hydro, nuclear, and wind power, so they have a lot of electricity and it’s low carbon. However, Germany’s electricity decarbonization is still a work in process at 349 grams of carbon dioxide per kilowatt-hour, down 40% from 2001, so while electrically powered steel processes will be lower carbon than blast furnaces, they still won’t be carbon neutral.
Steel decarbonization will be working in parallel with electricity decarbonization. He points to very efficient integrated blast furnace iron and steel processes that are currently lower carbon end-to-end than less efficient blast furnace processes in other parts of the world. He considers it reasonable to shut down the highest carbon processes, ship more lower-carbon steel to fill in the gaps and build up DRI and EAF processes over time, an approach that’s reasonable. Carbon markets like the EU’s and China’s, which is currently 5 times the size of Europe’s, and emerging carbon border adjustment mechanisms, mean that steel’s many uses will start impacting costs of the raw material, and force many of the worst offenders off the market, just as Canada’s carbon price forced Alberta’s coal generation off the market seven years earlier than planned.
We discuss the shift in processing iron ore closer to mines with electrons, either directly or via hydrogen reduction processes. Inevitably marine shipping fuel costs will go up as low-carbon energy displaces current resid bunker fuel. That will put pressure on bulk shipping. The carbon pricing efforts will hit coal shipments blast furnaces. The future will have more iron or sponge steel shipped to steel mills for manufacturing steel products instead of integrated steel mills.
One question I’m still trying to get an answer to is what percentage of the world’s steel is consumed by the fossil fuel industry. Many of the assets like pipelines are longer lifespan, but still have grown massively in the past 30 years and will see significant reduction in the next 40 years. Very large crude carriers are already seeing plummeting sales with only two scheduled for delivery in 2023-2024. What percentage is in oil refineries? What percentage in rail oil cars and road tankers? What percentage in gas stations? I’ve found data points, but still the best number I have is 55% of steel is used in building and infrastructure, with no real breakdowns. If someone has numbers, please share.
Next we pivoted to whether there were any industrial applications that he had found that couldn’t be electrified. In his experience, there are places where Kanthal’s technologies aren’t applicable, where there are a lot of watts per meter such as melting metals or radiative gases.
Between us we stepped through the heat technologies that can be applied, from heat pumps, to transmitting lower temperature heat around, to thermal storage to time shift heat for 12 or 18 hours, to resistance heating, to induction heating, to electromagnetic spectrum heating (basically industrial microwaves or infrared), to electric arcs to electric plasmas. The last solves for a problem area I didn’t have a solution in mind for, ceramics and cement, where that type of heat is required, and subsequently I found an electric plasma cement pilot plant. In many cases, a combination of different electric heat solutions will be required to create a fully electric industrial heat solutions.
For the coming decades, he leans into decarbonizing electricity as a major factor. If the electricity is fossil free, then using it for heat makes a lot of sense, especially as electricity tends to have a more predictable price. He’s concerned about variances in velocity of changes in different parts of the world. He’s expecting changes in technologies and value chains, along with potentially more distributed approaches. Regardless of what it ends up looking like, heat will still be required and a lot more of it will be electric.
He leaves us with the thought that industry is driving action more than governments right now. Industrial giants are making climate roadmaps, while governments are often focused on winning the next election. He feels countries have to set aside their narrow national interest to work together on real solutions, picking winners where there are clear ones and incentivizing industry to find new solutions.
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