ET23SWE0036 - Industrial Heat Pump Market Study
This project involves a market characterization study for Industrial Heat Pumps. Industrial Heat pumps are heat pumps that are used in large-scale industrial processes. Standard heat pumps are generally used for residential and small-scale commercial applications. Industrial heat pumps, on the other hand, are typically designed to handle much larger heating loads, temperatures, and pressures and overall more robust to meet the demands of industrial processes. Available studies suggest that industrial heat pumps are an underserved sector mostly due to the critical roles the incumbent technology plays within existing processes. End users are generally hesitant to embrace technology that is less common/mature and ones they are less familiar with. Existing studies indicate that there are significant energy and greenhouse gas savings potential by replacing more common natural gas heating technologies with industrial heat pumps. For example, an ACEEE study notes a savings of up to 32% of source energy. The IEA report suggests a savings of up to 10% of global emissions if fossil fuel boilers were replaced by heat pumps in these applications.
This study will serve to provide additional context as to how this technology can play a role in decarbonization and reducing energy usage within California. The study will include the following: 1) size the potential market of industrial heat pumps in CA, 2) identify the highest benefit applications and locations, 3) identify commercial and pre-commercial technologies and manufacturers, 4) identify technology feasibility including technology and market barriers and opportunities, and 5) recommend utility interventions to support market adoption.
To date, less than five percent of process heat uses electricity, generally relying more on fossil fuels (Rightor et al., 2022). The industrial sector, which includes process heat, accounts for more than 25 percent of greenhouse gas (GHG) emissions in the United Sates (U.S.) with 50 percent of thermal energy being produced on-site (U.S. EIA, 2021a). This report outlines the findings for a market study on industrial heat pumps (IHP). Although IHP installations are growing around the world, especially in Europe, Japan, and Australia, there are few installations in the U.S. This presents a large growth opportunity for this technology across multiple industries and applications as proliferation of IHPs can directly impact GHG emissions.
Heat pumps have wide applicability to industrial process loads. However, the efficiency of heat pumps declines as temperature lift increases thereby limiting target industries for IHPs because of the high process temperature requirements. Currently, commercially available IHPs can supply temperatures up to 165°C (329°F) and approximately 35 percent of industrial heat processes fall within this range (Arpagaus et al., 2017) (Rissman, 2022).
This study investigated IHP applications for eleven industrial subsectors including meat processing, dairy, beer, canned vegetable and fruit processing, cane sugar refining, beet sugar, corn wet-milling, soybean oil, textiles, pulp and paper, and automotive industries. The evaluation was performed based on the Lawrence Berkeley National Laboratory’s analysis, which estimated IHP potentials using two scenarios: a conservative use case and aggressive use case (Zuberi et al., 2022). The conservative case considered only high temperature heat pump (HTHP) applications, requiring process temperatures less than 100°C (212°F) and boiler pre-feed. The aggressive case considered both HTHPs and steam generating heat pumps (SGHPs).
The total U.S. potential IHP heating capacity was found to be 9,870 MW and 21,726 MW for HTHP and SGHP, respectively. (Zuberi et al., 2022) From the industries analyzed, California contributes approximately seven percent of the total potential IHP heating capacity of the U.S. with a total potential IHP heating capacity of 1,051 MW and 1,069 MW for HTHPs and SGHPs, respectively.
As California continues to decarbonize its grid, both HTHPs and SGHPs have the potential to be part of the industrial sector electrification solution to meet net-zero emissions goals. Furthermore, if electricity is supplied to IHPs from zero-emissions sources, a significant amount of heat can be considered emissions-free.
This report reviewed the status of the technology by identifying current demonstrations and IHP manufacturers. Industry experts and manufacturers were interviewed to obtain additional information about the market, high value applications, market adoption drivers, market challenges and barriers, and future developments. Additionally, recommendations for utility program pathways were summarized from the findings. IHP technology and industrial markets are both evolving at a rapid pace, so this report may not address all current issues or opportunities in the marketplace.
