Powering industry to net zero

POWERING INDUSTRY TOWARDS NET ZERO

Our vision on anchoring industry in Europe

Dear reader,

European industry is undergoing an immense transfor mation. Over the past few years, industry’s approach to the climate crisis has become a combative urge to invest in sustainable practices and processes. Electricity will play a key role in this transformation, as confirmed in the present study. By 2030, industrial electricity consump tion is expected to grow by 40% and 50% in the 50Hertz area and Belgium respectively.

Interestingly, as we discovered over the course of our research, this transformation will not only be good for the climate: companies that have made the most progress on their transition to carbon-free processes have been the least affected by the energy crisis. Together, electrification and access to renewable energy through long-term commitments (via power purchase agreements or their own renewable energy production) offer companies long-term price stability and protection against price inflation in the gas and electricity markets.

The current crisis has further highlighted how society could benefit from accelerating the energy transition. The energy transition will not only reduce our dependence on fossil fuels, it will also ensure more stable and affordable prices. It will grant industry an opportunity to make its business processes more sustainable and will anchor important businesses in Europe, directly contributing to employment and prosperity.

Industry will apply different methods to decarbonise, such as electrification, carbon capture, utilisation and storage (CCUS) and hydrogen. Its demand for electricity will increase significantly. What’s more, its production processes are also changing and many opportunities for more flexible consumption are emerging.

Today, most industries have a rather straightforward rela tionship with our grids: we provide them with a stable source of supply. However, that relationship will rapidly change and become increasingly complex. Compa nies will start to use our network in a more intense and dynamic way. Therefore, it is important to better under stand what changes will happen as a consequence of this industrial transformation. How much electricity will industry need and by when? To what extent are the load profiles of companies that are connected to our grids changing? What potential is held in more flexible consumption?

We have been able to produce this study by relying on the cooperation with over 50 large industrial consumers and federations from Belgium and Germany (50Hertz area). We modelled in detail the most energy- and emissions-intensive industrial sectors. These sectors represent 70% of the total industrial energy consumption. The conclusion we came to is clear: electrification combined with the accelerated expansion of low-carbon electrons will be the main lever for industry’s decarbonisation over the next 10 to 20 years, and will contribute to both climate objectives and the anchoring of industry in Europe.

While the conclusion might sound straightforward, its implementation will be a Herculean task.

It will mean putting in maximum effort at a time of rising interest rates and inflation. In addition to major investments in industrial electrification and renewable generation, important ‘leading’ investments in grid infrastructure and digitalisation will be needed to make this industrial transformation a success. More coopera tion between industry, the electricity sector and public authorities will therefore be needed, including with regulators and local authorities.

If, together, we succeed in addressing both the climate crisis and the competitive pressures felt by European industry which are being caused by high fossil fuel prices, we will be helping to anchor sustainable indus tries in Europe and will be contributing to the formation of a prosperous society.

I believe this is both a challenging and hopeful message. Enjoy the read!

Chris Peeters, CEO of Elia Group

→ If, together, we succeed in addressing both the climate crisis and the competitive pressures felt by European industry which are being caused by high fossil fuel prices, we will be helping to anchor sustainable industries in Europe and will be contributing to the formation of a prosperous society.

CHRIS PEETERS, CEO OF ELIA GROUP

IN SHORT

The results obtained as part of this study rely on a bottom-up model of the most energy-intensive indus tries in Belgium and the 50Hertz area (north and east of Germany). Over the past year, Elia Group has worked very closely with over 50 industrial stakeholders to sketch out possible pathways to net zero.

In all considered scenarios, access to affordable low-carbon electrons is crucial for accelerating the elec trification of industry, since this makes it more resilient and sustainable. The rapid expansion of renewable energy therefore occupies a crucial position in industrial decision-making.

Industrial electrification is at risk of slowing down or even coming to a halt if electricity prices continue to follow the marginal cost of gas production units in the longer run. Access to low-carbon electrons at stable and affordable prices is a prerequisite for long-term electrifi cation investments.

A strong electricity grid is key for facilitating the electri fication of industry with renewables. Proactive planning and the accelerated construction of this infrastructure will therefore be crucial for the successful decarbonisa tion of industry.

Industrial flexibility optimises future energy costs and benefits the power system in multiple ways. It will there fore become an inherent part of future business cases.

In addition to ramping up electrification, the full decar bonisation of industry will only happen through carbon capture, utilisation and storage (CCUS) and access to low-carbon molecules such as green hydrogen and ammonia.

Industrial electricity consumption will increase by 40-50% in the run-up to 2030. Electrification and the accelerated development of renewables is our main tool for reducing our exposure to fossil fuels over the next two decades.

In all investigated scenarios, electrification will play a major role in industry’s journey to net zero. Building out leading grid infrastructure is therefore critical for keeping pace with industry’s electrification ambitions, attracting new innovation projects and anchoring industry in Europe.

Carbon capture, utilisation and storage will be essential for dealing with unavoidable process emissions and will have an important effect on power consumption.

Favourable policy and regulatory frameworks to kick-start electrification.

There will be a gradual shift towards low-carbon (green) molecules in heavy industry with an increase in volume demand beyond 2030. A vast amount of green molecules will need to be imported.

Speeding up the development of RES to drive prices down for society and industry.

Industrial flexibility optimises future energy costs and benefits the power system in multiple ways, meaning that it will become an inherent part of future business cases.

Accelerating the build-out of the grid as an enabler for the industrial transition.

Fostering flexibility as a double accelerator for industrial electrification.

The results of this study can be grouped together under 5 key findings:

Four key levers for enabling industrial decarbonisation and anchoring industry in Europe

The current energy crisis, following the war in Ukraine, has switched our economy to survival mode. Short-term measures are being taken to protect households and businesses. However, structural changes are needed to anchor our industry in Europe by making it less dependent on fossil fuels.

This study explores the changing needs of industry and its relationship with the electricity grid. Based on close work undertaken with over 50 companies and associa tions in Belgium and Germany (from the 50Hertz control area, located in the north and east of the country), it outlines different pathways for industry as it moves towards net zero.

ONE ENDURING DEMAND FROM INDUSTRY: ELECTRIFICATION COMBINED WITH ACCESS TO AFFORDABLE, LOW-CARBON ELECTRONS ENERGY POLICY

The one enduring demand from industry that our study notes is electrification combined with access to low-carbon electrons at stable and affordable prices. The rapid expansion of renewable energy therefore occupies a crucial position in industrial decision-making. In addition to ramped-up electrification, the full decarbonisation of industry will only happen through carbon capture, utilisation and storage (CCUS) and access to low carbon molecules such as green hydrogen and ammonia.

THE IMPORTANCE OF INDUSTRY IN 2021

In 2021, industry represented 15% and 24% of Belgium and Germany’s gross domestic product (GDP) respectively and employed 21% and 18% of each country’s working age population [NBB-1, SBA-1, SBA-2].

AFFORDABILITY: soaring natural gas prices, which have a direct impact on electricity prices, have plunged Europe’s economy into crisis.

RELIABILITY: possible gas scarcity, low hydropower availability across Europe and low nuclear availability (particularly in France) are putting pressure on the energy system.

SUSTAINABILITY: whilst the climate crisis requires unprecedented investments for Europe to reach net zero, gas scarcity is pushing some industries to switch to oil and coal.

ALL THREE PILLARS OF THE ENERGY TRILEMMA ARE UNDER PRESSURE

THE ENERGY TRANSITION HAS BECOME A MATTER OF SOCIOECONOMIC PROTECTION

Accelerating the energy transition has never been more relevant than today. In May 2022, the European Commis sion published its REPowerEU Plan [EC-1], which aims to rapidly reduce the Union’s dependence on Russian fossil fuels. Besides energy savings, the plan covers measures relating to the diversification of energy sources and an accelerated rollout of renewable energy. These measures cannot be carried out overnight.

The current situation is strongly affecting industries throughout Europe. Some industries are reducing their output, temporarily halting their production or consid ering turning to offshore production outside of Europe. Industries with a high share of energy costs in their cost of goods sold (COGS) and those that cannot pass price increases onto their consumers have been most affected.

The current energy crisis has made it clear that the role that natural gas has to play as a transition fuel may be more limited than originally anticipated (in terms of energy volumes). The accelerated development of low-carbon generation in the form of renewable energy will be the main tool for reducing Europe’s exposure to fossil fuels over the next 10 to 20 years. This will increase Europe’s energy independence and make European economies more resilient and sustainable.

“→ Net zero in 2045 is only 22 years from now. This equals about one investment cycle for many industrial plants. So net zero in 2045 has an immediate impact on companies’ decisions today as these investments have to be in line with climate neutrality.

JULIA METZ, LEAD INDUSTRY POLICY AT AGORA INDUSTRY (DE)

CRISIS MEASURES TO PROTECT OUR ECONOMIES

To ease the impact of high energy prices on European industry, crisis measures are being rolled out and ideas to support industry are being discussed.

These include revenue caps on infra-marginal electricity production, a dynamic price corridor for natural gas and schemes for (partial) joint gas procurement, as well as targeted support for end consumers and industry.

As an example, in Germany, at the time of writing, the Federal Govern ment is finalising a legislative proposal to introduce a price freeze on gas and electricity for all categories of consumers. For industry, this proposal sets a fixed gas/electricity price that applies to 70% of historical consump tion. These support measures, which are due to be applied between January 2023 and April 2024, are to be partly financed by the introduc tion of a technology-specific cap on market revenues, as prescribed by the EU regulation on an emergency intervention to address high energy prices [EC-2].

DR.

CREATING THE RIGHT CONDITIONS FOR STRUCTURAL CHANGES TO ANCHOR INDUSTRY IN EUROPE

While short-term measures are essential for getting industry through the next few winters, the anchoring of industrial players in Europe will only be secured if the right conditions are created for longer-term, structural changes to occur, such as:

▶ creating favourable economic conditions to reduce the use of fossil fuels;

▶ scaling up the development of renewable energy sources (RES);

▶ developing infrastructure to bring clean energy to industry; and

▶ creating the supply chain for a sustainable economy.

These measures need current political and regulatory frameworks to be urgently adapted.

For industrial players to meet the net zero targets in Germany (2045) and Belgium (2050), companies need access to stable and affordable climate-neutral energy supplies and feedstock. The right infrastructure will need to be realised accordingly. A strong electricity grid infrastructure is key for facilitating the electrification of industry on the basis of low-carbon electrons (like renewables), which is one of the main levers for industry to reach net zero. Proactive planning and the accelerated construction of this infrastructure will therefore be crucial for the successful transition of industry towards net zero.

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→ Due to the long lead times for infrastructure projects, the further development of the power grid must be planned in a timely manner. We have to take developments into account that you cannot fully assess today. A year ago, there was no mention of the REPowerEU Plan to decouple Europe from Russian fossil fuels. However, the continued scaling up of renewable energy targets and rampant electrification are creating urgencies that are requiring fast and additional investments.

FREDERIC DUNON, DEPUTY CEO OF ELIA TRANSMISSION BELGIUM

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→ There is a growing understanding that integrating more renewables into the system and connecting markets are flattening price curves.

Given that Europe still is dependent on energy imports, each interconnector that is built and every common project that is completed - like the energy islands that have been planned - are important steps forward in strengthening European energy sovereignty.

STEFAN KAPFERER, CEO OF 50HERTZ TRANSMISSION

THIS STUDY EXPLORES INDUSTRIAL PROCESSES THAT MAKE UP 70% OF INDUSTRIAL ENERGY CONSUMPTION IN

BELGIUM AND GERMANY (50HERTZ AREA)

Over the past year, Elia Group has been in discussions with over 50 industrial companies, associations and think tanks in Belgium and Germany to sketch out the possible pathways to net zero for industrial players in their control areas. The insights gathered have been verified against decarbonisation options outlined in European research and macroeconomic developments.

TotalEnergies Raffinerie Mitteldeutschland GmbH

This study covers in-depth industrial processes that are responsible for over 70% of Belgium’s and Germany’s (50Hertz area) industrial energy consumption and CO2 emissions.

In addition to heavy industry, other sectors like data centres and other companies (such as those belonging to the food and drink industry) were modelled. Some industrial sectors are not covered in detail. For these sectors, high-level analyses were performed and the results were included in the industrial energy demand projections. The impact of logistic services companies on electricity consumption was considered for some of the cluster analyses (Annex B). Information on the assumptions taken for the different sectors can be found in Annex A.

The results obtained were cross-checked against macro economic statistical datasets like those provided by Eurostat [EUR-1], Statbel [STA-1], Destatis [DES-1], the European Environment Agency [EEA-1], and Bref [BRE1]. They were also discussed with industrial stakeholders, associations and research centres.

The results obtained in this study rely on a bottom-up model of most of the energy-intensive industries in Belgium and in the 50Hertz area. The production processes for each of these industries were modelled: for each product and each variant of the production process (business as usual, climate-neutral variants...), the model determined the required feedstock (such as fossil fuels, molecules (H2 and derivatives) and biofuels) and energy carriers needs (electricity, fossil fuels and molecules) based on the volumes of final products.

Cement

Petro chemical final products (80%)

High-Value Chemicals (80%)

Steel Machinery

Food and Drink (80%)

Paper Glass

Transport equipment

Wood and wood products Construction Textile and Leather Mining and quarrying Others

Non-ferrous metals (50%)

Data centres Non-metallic minerals (60%)

Fossil Fuels Electricity

Molecules (H2 and derivatives)

Figure 1 outlines the industry model that was developed for this study. Three different scenarios were investigated; these scenarios are based on information received from industry on the options they identified to move towards net zero (complemented with options identified in the literature where relevant). Hence, each scenario involves different process variants that industrial players might employ as they work towards net zero (for example, more or less business as usual, different decarbonisation options such as electrification or carbon capture, utilisa tion and storage, etc.). These scenarios are explained in more detail below (see Figure 2 under “Pathways to net zero”).

This study is not a one-shot exercise. Close collabora tion with industry is needed to update these bottom-up scenarios regularly, as they will be subject to change.

Molecules (H2 and derivatives)

Fossil fuels Biofuels

FIGURE 1 – SCHEMATIC REPRESENTATION OF THE INDUSTRY MODEL DEVELOPED FOR THE STUDY

FOUR FOCUS AREAS

The investigations in this study focus on four main areas:

1. Pathways to net zero, 2. System impact and flexibility, 3. Grid impact, and

4. Elia’s and 50Hertz’s commitments as facilitators of the energy and industrial transition.

1. Pathways to net zero

The pathways to net zero, or scenarios, are models of the different options being considered by industry to move towards net zero. The pathways provide a holistic view of the industrial transition by considering aspects such as energy efficiency, products, process variants, energy carriers and feedstock.

A CLEAR VIEW ON 2030, MORE UNCERTAINTY REGARDING LONGER TIME HORIZONS

The geographical scope of this study comprises Belgium and the north and east of Germany (the 50Hertz control area). The study also explores several industrial clusters in more detail (see Annex B).

Industry’s transition to net zero is explored in line with three different time frames: 2030, 2040 and 2045/2050 (climate neutrality target dates in Germany/Belgium).

For 2030, one central scenario was established based on input from industrial players on their - in most cases concrete - short- to mid-term plans to reduce emissions.

After 2030, the pathways leading industry to net zero are more uncertain. Based on interviews with industry, academic research, exchanges with Bloomberg New Energy Finance (BNEF) and more in-depth investiga tions of the (petro)chemical sector undertaken with Accenture, three different scenarios were established for 2040 and 2045/2050. The scenarios differ in assumptions for sectors where uncertainty remains on the pathways to net zero.

Except for some specific sectors, the model assumed in both Belgium and the 50Hertz area a slight increase in production volumes (0.05% to 1%). The study considers that all existing industry will remain in Belgium and Germany. The results must therefore be interpreted in terms of what needs to be done in order to maintain industry in Belgium and Germany. This also means that regular updates are needed to keep track of the latest evolutions (e.g. industries leaving, new industries arriving etc.). Some exceptions apply to this principle, as outlined in the next paragraphs.

→ Having worked with the main chemical players throughout Europe, we were able to provide insights to Elia Group covering twenty of the most energyintensive processes in refineries and (petro)chemical industries. With Accenture’s insights into industry players’ decarbonisation roadmaps and detailed understanding of the production processes, we focused on developing plausible pathways for these industries towards net zero. As an example, we observed a strong electrification potential for low temperature heat and steam in these processes.

TINA PIGA, MANAGING DIRECTOR UTILITIES & ENERGY BELUX AT ACCENTURE

Exceptions applicable in Belgium:

▶ a reduction of oil refining capacity by 2050 in line with [CON-1];

▶ a growth ambition for the food and drink industry focused on exports [STT-1];

▶ a yearly growth rate of 11% is expected in the digital sector in the lead-up to 2040. This increase is based on historical observed growth and includes effi ciency improvements. Uncertainty surrounding the exact evolution of this sector remains high.

Exceptions applicable in the 50Hertz area:

▶ a decrease in the oil refining capacity is envisaged by 2045 in line with [CON-1];

▶ a strong increase is expected in the digital sector: with more than 2 GW of connection requests for data centres by 2030, the yearly growth of this sector’s power demand is estimated to be around 7% (but uncertainty remains high);

▶ due to its high levels of green electricity supply and the availability of land for new industrial sites, the 50Hertz area (the Berlin-Brandenburg region in particular) is attracting new industrial settlements, mainly in the manufacturing and digital sectors.

A VAST AMOUNT OF GREEN MOLECULES TO BE IMPORTED

Results regarding the demand for low-carbon molecules were reported separately by the model. The reason for this is that the production locations of low-carbon mole cules (e.g. hydrogen, ammonia or methanol) are not yet fully clear. The hydrogen strategy of Belgium and Germany focuses on importing a large share of the needs for green hydrogen and derivatives. If part of the green molecules are produced locally using the electrolysis process, Belgium and Germany will need additional amounts of renewable electrons. These volumes then need to be added to the volumes reported in Key Finding 1 (next chapter). This approach allows an easy calculation of the effect of different shares of domestic production of low-carbon molecules. To illustrate the possible impacts on the grid, the cluster analyses do take into account projects considered by industry to produce low-carbon molecules or e-fuels (see Annex B).

TRANSITION PATHWAYS ALSO CONSIDER A SWITCH IN FEEDSTOCK

Next to switching to a carbon-neutral energy supply, a switch in feedstock is part of the transition pathway. For example, primary steelmaking processes will reduce their use of coal to cut their greenhouse gas (GHG) emis sions. This can be achieved e.g. by using innovative direct reduced iron (DRI) technology alongside an electric arc furnace (EAF). In an initial phase, this technology will be powered by natural gas (as it is already in place in a steel plant in Hamburg and will be in Ghent); a later shift towards low-carbon hydrogen can be considered (once available at affordable prices).

Different examples of industrial symbiosis exist to decarbonise raw materials: waste wood and plastics can replace a part of fossil carbon in blast furnaces for iron production, and waste materials and by-products from other industries can be substitutes for limestone in cement kilns. Other examples can be found in the chemical recycling of plastics, which is a rather ener

gy-intensive process as plastics are broken down into their initial components (like naphtha,…), which are then used as feedstock for rebuilding these plastics. The Flan ders ‘VLAIO’ study emphasises this process of plastic recycling as a potential solution that allows fossil feed stock to be reduced whilst at the same time securing the future of the high-value (petro)chemical sector in Belgium [VLA-1].

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→ Indaver’s Plastics-to-Chemicals (P2C) depolymerisation technology allows the recycling of end-of-life plastics such as polyolefins and polystyrene by converting them into a petrochemical feedstock that can be used for the production of high-demand packaging materials. With P2C, we are significantly expanding the possibilities for recycling of endof-life plastics waste that could previously not be recycled or only be used for conversion into low-value applications.

ERIK MOERMAN, DIRECTOR SALES AND DEVELOPMENT AT INDAVER PLASTICS2CHEMICALS (BE)

2. System impact and flexibility

In order to model the impact of future industrial processes on the power system, it is important to under stand their power consumption profiles. These profiles can differ from historic profiles. Therefore, new power profiles were elaborated for some processes based on different inputs like type of process (batch or continuous), working schedules, available flexibility, etc. This is shown in Figure 3. The learning gained from these profiles can be integrated into future exercises e.g. to calculate the required grid infrastructure.

Flexibility plays a significant role both in the integration of renewables and in optimising the use of the existing grid infrastructure. Following the analyses performed for the ‘Roadmap to Net Zero’ study [ELI1], this study highlights the value that can come from optimising industrial flexibility on day-ahead market prices via several use cases. In addition, an illustrative case was developed to show the impact of flexibility on the grid infrastructure (see Key Finding 5).

3. Grid impact

Based on findings from the first two focus areas, this section identifies some of the actions needed to prepare the power grid to accommodate industry’s transition to net zero. It confirms the findings of the Federal Develop ment plan (FDP) in Belgium and Netzentwicklungsplan (NEP) in Germany, which approach the planning of the electricity grid in a holistic manner.

The electrification of industry requires the accel erated development of grid infrastructure. Several clusters were investigated in more detail in order to get a better understanding of the infrastructurerelated challenges and needs to enable the industrial transition (see Annex B).

→ In our challenge to achieve a climate-neutral Belgian economy by 2050, all sectors will have to make the necessary efforts to reduce their CO 2 emissions. A future-proof infrastructure is key to allow access to cost-competitive renewable energy. A first step has been taken by carrying out this study. That is why the reinforcement of our power grids is a first priority in the transition towards a robust energy system, hand in hand with pipelines and port facilities for green molecules and carbon capture and storage.

JACQUES VANDERMEIREN, CEO PORT OF ANTWERP-BRUGES (BE)

FIGURE 3 – SCHEMATIC REPRESENTATION OF THE INDUSTRY MODEL DEVELOPED FOR THE STUDY

4. Elia’s and Hertz’s commitment as facilitators of the energy and industrial transitions

Elia and 50Hertz want to facilitate industry’s journey to net zero by providing industrial stakeholders with infor mation and services.

This includes:

▶ providing them with insights into their real-time offtake;

▶ better information about the origin of the energy they consume;

▶ insights into the impact of flexibility;

▶ and enabling industrial players to move (excess) solar energy produced in one of their sites to another.

A successful industrial transformation involves more than simply switching to low-carbon energy sources. The transition must be approached in a holistic way, including adopting measures and practices such as: climate-neutral feedstock; new processes and products, circularity, energy efficiency, and offsetting/ capturing remaining emissions. The current study combines these different elements and then focuses on their impact on the power system.

THE RESULTS OF THIS STUDY CAN BE GROUPED UNDER

FIVE KEY FINDINGS

Industrial electricity consumption will increase by 40-50% in the run-up to 2030. Electrification and the accelerated development of renewables is our main tool for reducing our exposure to fossil fuels over the next two decades.

These key findings are based on extensive data analyses and interviews with different industrial players. Elia and 50Hertz always handle connection requests and bilateral discussions with the utmost discretion and confidenti ality. Our priviliged position allows us to share some key, aggregated insights into how industry is expected to evolve in the coming decades.

In all investigated scenarios, electrification will play a major role in industry’s journey to net zero. Building out leading grid infrastructure is therefore critical for keeping pace with industry’s electrification ambitions, attracting new innovation projects and anchoring industry in Europe.

More information on the assumptions and performed analyses for the different sectors can be found in Annex A. The results for the investigated industrial clusters in the Elia and 50Hertz area are provided in Annex B.

Carbon capture, utilisation and storage (CCUS) will be essential for dealing with unavoidable process emissions and will have an important effect on power consumption.

There will be a gradual shift towards low-carbon (green) molecules in heavy industry with an increase in volume demand beyond 2030. A vast amount of green molecules will need to be imported.

Industrial flexibility optimises future energy costs and benefits the power system in multiple ways, meaning that it will become an inherent part of future business cases.

INDUSTRIAL ELECTRICITY CONSUMPTION WILL INCREASE BY 40-50% IN THE RUN-UP TO 2030. ELECTRIFICATION AND THE ACCELERATED DEVELOPMENT OF RENEWABLES IS OUR MAIN OPTION FOR REDUCING OUR EXPOSURE TO FOSSIL FUELS OVER THE NEXT TWO DECADES.

Elia Group is convinced that industry’s transition to net zero is about to accelerate, given the increase in connec tion requests in recent year(s). Elia and 50Hertz began collaborating more closely with industrial companies in their control areas to better capture their changing needs. This resulted in a thorough comprehension of the industrial processes and their technology readiness. These insights are important for a proactive and holistic grid and system development.

Coupled with scientific research, these exchanges resulted in a projected increase in electricity consump tion of up to 50% and 40% in the Elia and 50Hertz control areas respectively by 2030. In Belgium, more than two thirds of this projected increase is underway or in study phase today. For 50Hertz, an increase of 3.5 GW (of which 2 GW will come from data centres) in industrial connec tion capacity is due over the coming decade.

Electrification will take place both in energy-intensive sectors, often located in industrial clusters, and other more decentralised companies (such as food and drinks). A large share of the latter uses natural gas for the supply of low- to mid-temperature heat. The majority of these processes will be electrified over the coming decades. Investments in electrification are clearly advantageous: even if gas prices return to lower levels, electrification will make our industry more resilient in face of future crises, and will constitute a major step forward in terms of industry reaching climate neutrality on top of the associated efficiency gains.

In all considered scenarios, access to affordable low-carbon electrons is crucial for accelerating the electrification of industry, making it more resilient and sustainable. Industrial electrification is at risk of slowing down or even coming to a halt if electricity prices continue to structurally follow the marginal cost of gas production units on the longer run. In order to avoid this, we need to go all out on the development of infra-marginal (i.e. cheaper) low-carbon electrons. An accelerated build-out of RES capacity will be the main lever for doing so in the coming 10 to 20 years. A larger share of RES generation will reduce the amount of hours where gas (or other fossil fuels) set the electricity price, leading to lower power prices. Accelerating renewable development not only reduces emissions, but also makes Europe more energy independent and resilient.

“→ As ArcelorMittal in Belgium, we are a very energy-intensive company. By investing €1.1 billion by 2026, we will triple the use of electrical energy between now and 2026. The availability and the stability of the grid is of utmost importance for us to realise our ‘Decarb’ roadmap, and it has even been a criterion used to invest here in Belgium.

“→ The transition from “grey to green” power sourcing, the direct electrification of rotating equipment, “power to steam” via e-boilers and carbon capture technologies will lead to a significant increase in our power demand by 2030. Therefore, we need the implementation of offshore wind and onshore high-voltage grid projects in Belgium to be accelerated.

“→ Agoria is deeply convinced that digital technologies can offer an answer to the climate challenge. The digital and green transitions (“twin transition”) can reinforce each other, support sustainable growth and maintain our economic and social welfare.

PIERRE MARTENS, SENIOR BUSINESS GROUP LEADER AT AGORIA (BE)

“→ The electricity demand of the chemical park in Leuna is expected to grow by 1 GW in the next 10 years, mainly driven by electrolyser projects. The sustainability of the chemical park will strongly depend on the grid connection and the availability of green electricity. This is why we need a 380 kV line as soon as possible.

MARC PECQUET, BUSINESS DEVELOPER SUSTAINABILITY PROJECTS AT TOTALENERGIES RAFFINERIE MITTELDEUTSCHLAND GMBH (DE)

MARC VAN BREDA, VICE PRESIDENT SENIOR PROJECT CCS, ENERGY & CLIMATE POLICY AT BASF (BE)

MANFRED VAN VLIERBERGHE, CEO AT ARCELORMITTAL BELGIUM (BE)

2030 PROJECTION: ALL SECTORS ARE PREPARING FOR ELECTRIFICATION ON A LARGE SCALE.

The highest increases in electricity consumption by 2030 will occur in the following sectors: steel, (petro)chemical, paper and pulp, food and drink, and digital (see Figure 4).

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In the steel sector, some initial projects have been launched to replace traditional blast furnaces with a combination of direct reduction (DR) and electric arc furnaces EAF (+2.5 TWh and +1.2 TWh in the Belgian and 50Hertz areas respectively).

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In the (petro)chemical sector, electric drives, carbon capture techniques, electric boilers and heat pumps are driving these significant increases (+5.3 TWh and +3.4 TWh in the Belgian and 50Hertz areas respec tively).

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The electricity consumption will more than double in the cement industry when carbon capture techniques are employed (+1 TWh and +0.6 TWh in the Belgian and 50Hertz areas respectively).

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In the paper and pulp industry (+0.8 TWh and +2.4 TWh in the Belgian and 50Hertz areas respectively) as well as in the food and drink sector (+4 TWh and +1.7 TWh in the Belgian and 50Hertz areas respectively), both heat pumps and electric boilers are replacing conventional gas boilers.

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The continued digitalisation of society will have a major impact on the usage of data, thereby exponen tially increasing electricity consumption. Based on connection requests and input from sector experts, Elia Group assumes there will be significant growth in this area in the coming decade, with a power consumption increase of 2.7 TWh and 3.6 TWh by 2030 in the Belgian and 50Hertz control areas respectively. However, the growth of the digital sector remains difficult to predict as limited information is available. Additional efforts to improve power usage effectiveness could lower the overall impact on the energy demand. Heat recuper ation to other sectors is another important lever for further optimisation, providing that sufficient demand for low-grade heat is present in the close vicinity. Finally, the movement of remote servers to clouds in data centres increases the efficiency as hyperscale clouds are more efficient.

The annual power consumption volumes in Figure 4 focus on gross power consumption. In Belgium, approxi mately 2.4 GW of local production in the form of combined heat and power installations (CHPs) are installed behind industrial access points. With a higher penetration of renewables in the system, the running hours of these units will gradually decrease over time, adding up to their net offtake from the grid. An increase in on-site renew able production would result in an opposite effect.

As noted from the interviews that we undertook for this study, it is clear that industry is ready to shift to the electrification of its processes. The technology needed for this is mature in most cases and if certain barriers are removed (see Lever 1), electrification will be the most impactful method for reducing Belgium’s and Germany’s CO2 emissions and their dependence on fossil fuels.

→ Currently we use natural gas to melt glass. We have the vision to become carbon net zero by 2050. On the roadmap to get there, we have an objective for 2030 to reduce carbon emissions by 30%. Therefore, we need to do electrification.

NIELS SCHREUDER, DIRECTOR PUBLIC AFFAIRS & COMMUNICATION, AGC GLASS EUROPE (BE)

→ Reducing net carbon emissions in industry will require a substantial increase in carbonneutral electricity generation in the coming decades. Therefore, all technological options need to be kept open, including renewable energy (in combination with storage and energy conversion), carbon capture and storage/usage and nuclear. Energy policy must be technology neutral and strive for the best balance between system costs (including grid infrastructure), security of supply and environmental impact.

PETER CLAES, DIRECTOR AT FEDERATION OF INDUSTRIAL ENERGY CONSUMERS FEBELIEC (BE)

2045/2050 PROJECTION

Figure 5 shows the projected industrial electricity consumption in the run-up to 2045/2050 (excluding power consumption for the production of green mole cules). It will increase by a factor of 2.4-2.5 compared with today’s values under the FOS & CCUS and the MOL scenario and by a factor of 2.8-3 in the ELEC scenario.

This increase will be driven by the same sectors as mentioned in the 2030 projection, with additional increases noted in the non-metallic minerals (cement, glass, lime…), non-ferrous metals and the paper and pulp sectors. This clear trend has been confirmed by other studies, including Febeliec-Energyville [FEB], DENA Leit studie [DENA], and the study commissioned by BMWK on the energy transition in industry [BMWK].

In addition, new industrial processes like waste plastic pyrolysis and e-cracking, if implemented on large scale, will also be important drivers behind the increase in electricity consumption.

Finally, the further increase for data storage and compu tation power across society will have a major impact, exponentially increasing electricity consumption by +15 TWh (Belgium) and +15.6 TWh (50Hertz area) by 2045/2050. Further efforts to optimise effective power usage and heat recuperation methods to other sectors (greenhouses, district heating, etc.) could lower the impact on the overall energy demand.

FIGURE 5 – EVOLUTION OF THE ANNUAL INDUSTRIAL CONSUMPTION IN BELGIUM AND THE 50HERTZ AREA IN THE LEAD-UP TO 2045/2050

→ Different, independent research shows converging projected transition paths for industry to reach net zero by 2050. The electrification of processes and having access to reliable electricity supply will be crucial to reach this target.

PIETER LODEWIJKS, PROGRAM MANAGER AT VITO/ENERGYVILLE (BE)

* Machinery, transport equipment ** Wood and wood products, textile and leather, mining and quarrying, other non-metallic minerals, other industrial sectors

CO2 REDUCTION TARGETS FOR INDUSTRY ON TRACK IN RUN-UP TO 2030

As shown in Figure 6, there is a clear correlation between the increasing industrial decarbonisation efforts and the decreasing emissions. Projected industrial GHG emis sions in 2030 for the modelled sectors are compared with the ambition of -55% reduction of the EU Fit for 55 package for Belgium and the -58% reduction target for Germany (as defined in the German Climate Change Act [BMU-1]). Beyond 2030, further measures are needed to reach net zero targets by 2045/2050, such as the use of direct air capture technologies or negative emissions via bio-energy combined with CCS (BECCS).

IN ALL INVESTIGATED SCENARIOS, ELECTRIFICATION WILL PLAY A MAJOR ROLE IN INDUSTRY’S JOURNEY TO NET ZERO. BUILDING OUT LEADING GRID INFRASTRUCTURE IS THEREFORE CRITICAL FOR KEEPING PACE WITH INDUSTRY’S ELECTRIFICATION AMBITIONS, ATTRACTING NEW INNOVATION PROJECTS AND ANCHORING INDUSTRY IN EUROPE

Many industrial players in the Elia and 50Hertz control areas are front-runners in terms of electrification and have been carrying out pilots and investments as part of their decarbonisation strategies:

▶ ArcelorMittal is already operating a direct reduction (DR) plant in Hamburg and is in the process of setting up a direct reduction - electric arc furnace (DR-EAF) project in Belgium.

▶ The Antwerp site of BASF has been identified as the first entity in the BASF group to reach net zero in the future.

▶ Holcim (cement) is considering an oxyfuel kiln to perform CCUS.

▶ Other examples are Nyrstar (virtual battery), PSA (elec trification of horizontal transport), Indaver (plastics recycling), HH2E (H2 electrolysis), along with many other examples mentioned in this study.

In addition to the transition of industries located in the Elia and 50Hertz control areas, this study also focuses on particular industrial clusters. In Belgium, the study looks at the Antwerp and Hainaut industrial clusters in more detail. In the 50Hertz area, the considered clusters are Leuna, Berlin, Hamburg and Lubmin. Other clusters in the Elia and 50Hertz control areas will be investigated in more detail in 2023. Detailed results can be found in Annex B.

Industrial clusters are typically prime locations for existing and new industries to settle in. They have access to diversified infrastructure (electricity, CO2 infrastruc ture, molecules). Additionally, industries within a cluster can implement synergies and in some cases make use of each other’s waste streams (circularity).

Our analysis confirms that most of the increase (up to 70%) in industrial power consumption by 2030 will take place in industrial clusters. Supporting this strong increase will require a switch from infrastruc ture being built following industrial electrification to leading infrastructure to keep pace with the electri fication of industry.

The precise speed of industrial decarbonisation and the exact multiplication factor of electricity consump tion as we approach 2045/2050 differ across each scenario. However, it is clear that electrification will play a major role under all investigated scenarios and that infrastructure build-out is necessary. Access to sufficient resources (in terms of financing, workforce and supply chains) is essential for building a robust and reinforced grid, anchoring industry in Europe and ensuring the energy transition is a success.

“→ There are three blocking points that need to be addressed. The first one is providing industry with planning security to make long-term investments. The second one is to provide them with a leading market to produce green products. The third one is to facilitate permitting procedures.

DIETMAR GRÜNDIG, DIRECTOR INDUSTRY AND TRADE AT DENA (DE)

“→ North Sea Port has expressed in its strategic plan ‘Connect 2025’ the intention, together with the companies based in the port, to reduce CO 2 emissions in the port area and to be a carbon-neutral port in 2050. The electrification of industry and mobility is one of the actions to achieve these goals. The availability of an extensive (high-voltage) transport network is of crucial importance.

DAAN SCHALCK, CEO OF NORTH SEA PORT (BE)

CARBON CAPTURE, UTILISATION AND STORAGE WILL BE ESSENTIAL FOR UNAVOIDABLE PROCESS EMISSIONS AND WILL HAVE AN IMPORTANT EFFECT ON POWER CONSUMPTION

The North Sea coastlines of Belgium and Germany will provide both countries with access to CO2 storage. The necessary infrastructure (such as CO2 pipelines and liquefaction infrastructure) must be developed within the current decade.

Based on input received from industry, CCUS will mostly take place in refineries and the high-value chemicals (HVC), cement, steel (potentially in transition phase) and lime sectors. CCUS will mostly deal with process emis sions: based on the input received, industries will not widely develop CCUS for capturing combustion emis sions.

By 2045/2050, our findings identify a range of carbon capture potential of 8 Mt (ELEC & MOL) to 17 Mt (FOS+CCUS) of CO2 in Belgium and 7 Mt (ELEC & MOL) to 11 Mt (FOS+CCUS) of CO2 in the 50Hertz area. The evolu tion is shown in Figure 7.

Several industrial pilot projects are focusing on the usage of captured CO2 (e.g. for production of synfuels). This has a positive effect on overall emissions, but requires correct carbon accounting. In order to reach net zero, the CO2 used for the production of synfuels needs to origi nate from direct air capture (DAC) or the combustion of biomass. Alternatively, the carbon needs to be captured again upon combustion of the synfuel.

CCUS has an important effect on power consumption, given the heat required for the capture process and the compression / liquefaction of CO2 for its trans portation. Our findings predict that there will be an offtake of 4 to 9 TWh (Belgium) and 4 to 6 TWh (50Hertz area) for CCUS by 2045/2050.

→ The decarbonisation of the cement industry is extremely challenging because of our process’ inevitable CO 2 emissions, which put us firmly in the hard-to-abate sector. CCUS is vital for Obourg to become the first net carbon neutral clinker plant in NorthWest Europe. We are working with several partners to accelerate the development of these CCUS solutions for GO4ZERO. By joining the first movers, we want to set the standards for future clinker manufacturing plants.

BART DANEELS, CEO OF HOLCIM BELGIUM (BE)

→ With Project ONE, INEOS

Olefins Belgium is building one of the most innovative, efficient steam crackers in the port of Antwerp: our ethane cracker will emit less than half as much CO 2 compared to the top ten percent cleanest plants in Europe. By fueling our cracking furnaces and steam boilers with hydrogen as a byproduct from the steam cracking process, we can already meet 60% of our heat consumption from day 1. Due to its flexible design it will be possible to fuel our installation with 100% hydrogen in the future when sufficient climate-friendly hydrogen becomes available.

JOHN MCNALLY, CEO OF INEOS PROJECT ONE (BE)

KEY FINDING

THERE WILL BE A GRADUAL SHIFT TOWARDS LOW-CARBON (GREEN) MOLECULES IN HEAVY INDUSTRY WITH AN INCREASE IN VOLUME DEMAND BEYOND 2030. A VAST AMOUNT OF GREEN MOLECULES WILL NEED TO BE IMPORTED.

Molecules (hydrogen and its derivatives) are used for two different purposes in heavy industry: as feedstock and as an energy carrier.

In 2019, almost all of the hydrogen was produced using the conventional steam methane reforming process (SMR) or came from the waste streams of other processes. The total volume is shown in Figure 8.

Over time, a gradual shift will take place to low-carbon hydrogen (and derivatives). The main routes for this are via CCUS of existing processes to produce hydrogen, or via electrolysis on the basis of green electricity (green H2). Towards 2045/2050, the Belgian and German hydrogen strategies are fully centered on a shift to green H2 (and derivatives).

FEEDSTOCK – With increasing shares of renewable energy in the system, a gradual switch will take place from grey to green hydrogen (and derivatives).

ENERGY – The projected use of low-carbon molecules as energy for industrial processes will remain limited until 2030. From that point onwards, processes like steam cracking using low-carbon molecules (for heating purposes) will start emerging. Additionally, molecules could start to play a more prominent role in the DR-EAF process, decreasing the use of natural gas. Finally, in some petrochemical production processes, hydrogen will play a role in heating under the molecule scenario (MOL).

All of our scenarios show that low-carbon molecules will have an important role to play in heavy industry by 2045/2050, mostly driven by their use as feedstock in hard-to-abate sectors and as an energy carrier in sectors where full electrification is not possible.

Approximately 33 to 62 TWh (Belgium by 2050) and 24 to 37 TWh (50Hertz area by 2045) of hydrogen (derivatives) will be needed to cover industrial needs for energy and feedstock.

The numbers reported for Belgium do not account for H2 needs for the potential production of synthetic fuels (feedstock for synthetic fuels for international aviation, shipping and long-distance trucking, amounting to 115 TWh in Belgium in 2020). The numbers for 50Hertz include one synthetic fuel project (production of e-fuels by TotalEnergies in Leuna). If more projects are realised, corresponding hydrogen (derivatives) need will have to be added to the above numbers.

Given the scarcity of domestic RES in both countries, a vast amount of green molecules will need to be imported. Nevertheless, an electrolysis capacity of 4.3 GW is being explored in the 50Hertz area to be installed by 2030 and approx. 1.8 GW of electrolysis capacity is currently being explored in Belgium.

The electricity needed for their production is not accounted for in the changes in electricity consump tion under Key Finding 1. The domestic production of some of these green molecules to kick-start the market and gain knowledge is a logical first step, but this will strongly influence the electricity demand in Belgium and Germany. Assuming that the electrolysis process has an efficiency of 70%, the required volume of elec tricity to produce the total amount of required green molecules would amount to 55 TWh (ELEC scenario) and 82 TWh (MOL scenario) in Belgium in 2050 and to 34 TWh and 53 TWh in the 50Hertz area in 2045. This is equiva lent to an annual production yield of around 13 – 19 GW of

offshore wind capacity (with a capacity factor of 50%) for Belgium and 8-12 GW for the 50Hertz area.

Given the scarcity of domestic RES in both Belgium and Germany, a large share of these green molecules will be imported. This is reflected in the hydrogen strategies of both countries. Investments in import infrastructure and pipelines leading to industrial clusters are needed under all investigated scenarios. One remaining question is the type of molecules that industry will use. As the long-dis tance transport of hydrogen is difficult, given that it only liquefies at very low temperatures and has a low energy density, other molecules like green ammonia or meth anol are also considered.

The location of domestic projects matters: if positioned close to renewable production sources (e.g. the Baltic coast in the 50Hertz area), electrolysers have positive effects on the grid and can contribute to facilitating RES integration, in particular if operated flexibly (see the Lubmin use case in Annex B). The use of synergies (waste heat, oxygen…) should also be considered, which provides some arguments for the on-site production of green molecules.

“→ As an energy-intensive sector at the base of the value chain of many sectors, the chemical sector and life sciences are a crucial link in the energy transition. With an open mind, the sector works on new processes, efficiency improvements and solutions for companies and citizens in the climate problem, driven by new energy carriers and raw materials. Without taboos and with a focus on CO2 reduction and cost efficiency, committing to the production and import of all sustainable, competitive and supply-secure energy sources is necessary for basic industry to realise the climate neutral future in Europe.

ELS BROUWERS, DIRECTOR ENERGY, CLIMATE AND ECONOMIC AFFAIRS AT ESSENSCIA (BE)

INDUSTRIAL FLEXIBILITY OPTIMISES FUTURE ENERGY COSTS AND BENEFITS

THE POWER SYSTEM IN MULTIPLE WAYS. IT WILL THEREFORE BECOME AN INHERENT PART OF FUTURE BUSINESS CASES.

Today, the business case for flexibility is mostly focused on supplying ancillary services to the power system. By supplying these services, grid users become actively involved in managing and helping to ensure the effi cient operation of the transmission grid. However, whilst the volume of ancillary services is rather limited, the flexibility needs for integrating higher shares of RES will significantly increase. In the future, the majority of flexibility needs to be optimised directly in wholesale markets (DA, intraday and more real-time markets).

Flexibility should therefore be placed in a wider context and will be an inherent part of future (industrial) busi ness cases. Sufficient flexibility is required in the power system to cope with the high volatility of RES infeed e.g. daily, weekly or seasonal fluctuations. Flexibility in industry will facilitate industry’s transition to net zero in two ways. Firstly, it will facilitate the integration of renew ables and lower the total energy cost of flexible processes. Additionally, by reducing the peak load during specific periods, industry can contribute to security of supply (moments with low RES infeed and high demand).

As we interviewed industrial stakeholders, it became clear that some of the pathways to net zero will enable new and innovative ways of flexible power consumption. These types of flexibility can be divided into four categories, which are outlined in Figure 9.

1. Additional production capacity

By carrying out additional investments in extending the production capacity of certain energy-intensive process steps, an overcapacity can be created. This capacity - combined with an intermediary storage - creates flex ibility in the process, without having an impact on the output itself. In the framework of this study, Elia Group

has worked on use cases proposed by Nyrstar and Trimet (see use cases 1 and 2).

2. Switching between energy carriers

A second form of flexibility comes from maintaining two parallel heating systems. When investing in heat pumps or electric boilers, they can be used in parallel with the current (typically gas boiler) heating system.

By switching between electric heating and fossil fuel based heating, flexibility can be provided to the power system during this transition phase. In the framework of this study, Elia Group worked on a use case proposed by BASF (see use case 3).

3. Geographical location shifting

In addition to shifting loads in time as done in the case of overcapacity, large companies – that have operations in different locations – can shift part of their load between production sites. In this case, the consumption will temporarily be shifted from a location with low renew able infeed or unfavorable grid conditions to a location where the conditions are more favorable. This type of flexibility is investigated in the data centre sector [DATA1], but can potentially be more widely implemented.

4. Battery storage, green molecule storage and heat storage

The final types of flexibility can be grouped together under the umbrella of energy storage. This energy storage can be provided in the form of electricity (batteries), molecules (H2, NH3,…) or heat. A large share of companies are considering these options in order to support their energy consuming processes or to make the most of their RES supply portfolio. In the frame work of this study, Elia Group has worked on a use case proposed by Microsoft (see use case 4).

FIGURE 9 – FLEXIBILITY OPTIONS IN INDUSTRIAL PROCESSES

PROCESS FLEXIBILITY

Fuel switch

Overcapacity

H2

Storage (H2 NH3,…)

Location shifting Heat storage

Location and/or time

Batteries (Li-ion, flow)

FIGURE 10 – MONOTONE CURVE OF THE LOADING OF A LINE WITH AND WITHOUT THE ACTIVATION OF INDUSTRIAL FLEXIBILITY TO REDUCE PEAK

LOAD

Figure 10 shows how industrial flexibility can help to solve congestions by reducing peak load over a limited number of hours or after the occurrence of a grid inci dent. The monotone curve on the left shows the loading of a line between production and consumption centres. In this illustrative example, there is high loading during approximately 400 hours, which defines the overall capacity of the line.

By activating industrial flexibility (in addition to other measures for solving overloads), and thus avoiding consumption during these specific hours, the average peak capacity is reduced, as shown in Figure 10. This will free up additional capacity, allowing (for example) addi tional industrial capacity to connect. Hence, flexibility has – where available – a beneficial impact. It is clear, though, that this is only possible for specific industrial processes and needs to be discussed with the industrial stakeholders in question. The right incentives must be created to unlock this industrial flexibility.

Industrial load profiles were developed as part of this study for some existing and new (carbon-neutral) production processes. The reason for doing so was that power profiles for future industrial processes can differ significantly from historic ones. These power profiles take into account available flexibility (that can be opti mised against power prices, renewable infeed, etc.).

An example of such a load profile – and the effect of flexibility - is shown in Figure 11, which depicts the load profile for a generic ‘grinding’ step in cement production. This process has the potential to temporarily increase its power consumption by 30% and can decrease it by up to 20%. Taking into account other constraints on the process, the flexibility can (for example) be opti mised against electricity prices, increasing the energy consumption at times when prices are low and lowering it when prices are high.

(ILLUSTRATIVE PURPOSES).

140 120 100 80 60 40 20 0

% loading % loading

Hourly load (MWh)

Flex activation 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

140 120 100 80 60 40 20 0

Real example Frequency of occurance Frequency of occurance

FIGURE 11 – ACTIVATION OF FLEXIBILITY IN THE CEMENT SECTOR TO AVOID HIGH PRICES (ILLUSTRATIVE PURPOSES)

Load including flexibility for the two first months of 2021

7.5 7.0 6.5 6.0 5.5 5.0 4.5 2021-01-01 2021-01-08 2021-01-15 2021-01-22 2021-02-01 2021-02-08 2021-02-15 2021-02-22 2021-03-01

ZINC SMELTER VIRTUAL BATTERY

FLEXIBILITY POTENTIAL IN THE ALUMINIUM ELECTROLYSIS PROCESS

As for many non-ferrous metals, zinc production is an elec tro-intensive industry and one of the largest industrial consumers in Belgium. The main energy consuming process in Nyrstar’s zinc production plant in Balen (BE) is the electrolysis section (ca. 80% of energy use), which has the incredible advantage of operating flexibly at very short notice. By investing in additional electrolysis capacity and intermediate storage, utilising this flexibility has no impact on the production capacity. This flexibility enables the operator of the production plant to reduce their electricity costs by using the volatility of day-ahead market prices and reacting to imbal ance prices.

Aluminium is obtained from alumina via the Hall-Héroult electrolysis (or smelting) process. This process is very electro-intensive (14 MWh of electricity is needed to produce 1 tonne of aluminium) and is carried out in continuous operation with process parameters kept as stable as possible.

In their production site in Hamburg as well as on other sites, TRIMET has upgraded their smelters to ensure thermal and electromagnetic compensation in case of flexible operation: energy balance can be kept within the electrolysis cells even with a variating power input. With this upgrade, 10% of the electrical load can be shifted within seconds and balanced out within a week while short activations can go up to 25% of the installed capacity.

CASE

The operation of this virtual battery requires a significant investment in expanding the capacity of the zinc operations in order to enable a flexibility of approximately 140 MW and a storage capacity of 7 GWh. This is comparable with the storage capacity of a larger pumped-storage power plant (e.g. Coo). When optimising these characteristics using historical day-ahead market prices with perfect foresight, this virtual battery reduces the overall electricity cost by an average of 22%.

Next to price arbitrage, operating the production plant in a flexible way can also resolve congestion issues in the adjacent transmission grid and could therefore offer the possibility of enabling a faster connection of additional customers.

1 USE CASE 2

Its fast response allows the aluminium electrolysis process to provide ancillary services, contributing to stabilising the grid (frequency containment reserve). The load shifting potential across the week offers opportunities for optimisation against electricity market prices, facilitating the integration of intermittent renewable generation, and could provide further services to the grid.

Additionally, TRIMET can quickly interrupt their processes and cut more than 90% of their power consumption for a limited period of time. This flexibility could be used by the TSO to restore system balance or solve grid constraints as part of the German “interruptible load” scheme, which expired in July 2022.

→ Typically, the production of aluminium in smelters worldwide is run as a constant process. At TRIMET, we have adapted our production process in a unique way that allows for variable energy input, which helps to stabilise the grid and to integrate more renewables into our energy system. However, to be able to fully offer our flexibility potential, we need the right regulatory framework.

DR. ANDREAS LÜTZERATH, TECHNICAL DIRECTOR AT TRIMET ALUMINIUM SE (DE)

FUEL SWITCH – E-BOILER

USE CASE: FLEXIBILITY POTENTIAL IN THE ALUMINIUM ELECTROLYSIS PROCESS

GRID-INTERACTIVE UPS: HOW DATA CENTRES CAN SUPPORT SYSTEM STABILITY AND FACILITATE THE INTEGRATION OF RENEWABLES

Today, steam is typically produced by gas boilers and cogenera tion units in industrial sites. The (partial) electrification of this steam production by e-boilers and heat pumps is an important lever on the pathway to net zero for industry.

Together with BASF, a use case was designed to investigate the financial surplus to switch from gas boilers to electric boilers during hours of excess renewable energy (low prices). The opti misation was done based on day-ahead market prices for gas and electricity and resulted in the following outcomes:

▶

E-boilers have faster ramping rates than gas boilers and have no standby losses, in contrast to gas boilers. This makes them particularly interesting for applications with a dynamic steam demand (also avoiding the blow-off of excess steam).

▶

During hours where the marginal price in the electricity market is set by a gas unit, it is not beneficial to activate the e-boilers as there is no substantial efficiency gain between electric and gas boilers (in contrast with industrial heat pumps which are more efficient).

▶

Access to affordable low-carbon energy is important for the business case for e-boilers.

In addition, some regulatory barriers discourage their current implementation. Due to the rather limited running hours in the first few years, the reservation of the necessary connection capacity is expensive - especially as, during a transition phase, it can be argued that this capacity could be used in a flexible way. An exploration of applicable tariffs is required in the future for such flexible loads.

USE CASE 3 USE CASE 4

The main goal of data centre operators is to provide their customers with highly available computing power. As financial and regulatory incentives for flexible operation have been low so far, data centres show a baseload electricity consumption profile. However, we see potential flexibility for ancillary services.

Aluminium is obtained from aluminium oxide via the Hall-Héroult electrolysis (or smelting) process. This process is very electricity intensive ( (14 MWh of powerelectricity is needed to produce 1 ton of aluminium/tAl)) and is usually carried out in contin uous operation with process parameters kept as stable as possible.

In their plant in Hamburg as well as in other sites, Trimet has upgraded their smelters to ensure thermal and electromagnetic compensation in case of flexible operation: energy balance can be kept within the electrolysis cells, even with a variating power input. With this upgrade, 10% of the electrical load (20 MW) can be shifted within seconds and balanced out within a week while short activations can go up to 25% (50 MW) of the installed capacity.

The uninterruptible power supply (UPS) is a short-term energy storage device which provides back up power and protects computing racks from damage. As UPS have a short response time but a limited storage capacity, they are well suited to providing ancillary services, compensating for shortterm frequency fluctuations.

Microsoft is developing a grid interactive UPS technology and already offers this flexibility, via the aggregator EnelX, on the balancing market in Ireland [MS2022]. The displacement of fossil fuel-fired power plants currently providing balancing services will contribute to a reduction in costs and emissions within the power system (-2 MtCO2eq in Ireland by 2025 [BAR2022]).

The project in Ireland is a blueprint for how data centres can help decar bonise electric power grids and can be rolled out to other areas across Europe.

Its fast response allows the aluminium electrolysis process to provide ancillary services, contributing to the stabilization of the grid (frequency contain ment reserve). The load shifting potential across the week offers opportunities for optimisation against electricity market prices, facilitating the integration of intermittent renewable generation, and could provide further services to the grid.

Additionally, Trimet can quickly interrupt their processes and cut more than 90% of their power consumption for a limited period of time. This flex ibility could be used by the TSO to restore system balance or solve grid constraints as part of the German “interruptible load” scheme, which expired in July 2022.

FOR ANCHORING INDUSTRY IN EUROPE FOUR LEVERS

This chapter reviews the building blocks for anchoring industry in Europe, based on the pillars of the energy trilemma: sustainability, affordability and reliability.

Four key levers have been identified to enable the necessary transformation and anchor industry in Europe.

Favourable policy and regula tory frameworks to kick-start electrification.

TO KICK-START ELECTRIFICATION, INDUSTRY NEEDS FAVOURABLE POLICY AND REGULATORY FRAMEWORKS IN PLACE

The electrification of industry ticks all the right boxes: it reduces GHG emissions and our exposure to fossil fuels. The technology required to facilitate this process is mature and ready to be rolled out at scale. However, not all investments in electrification that anticipate the future have a clear business case from the start. The right policy measures and incentives are needed to ensure that early investments in industrial electrification and flexibility will take off.

Our interactions with stakeholders show that industrial players are ready to invest in the decarbonisation of their processes. Most technologies needed to electrify indus trial processes are mature (low- and mid-temperature heat, DR-EAF for steelmaking, …) and industry is consid ering their implementation in the near future.

On the longer term

Speeding up the development of RES to drive prices down for society and industry.

On the short term

Accelerating the build-out of the grid as an enabler for the industrial transition.

Fostering flexibility as a double accelerator for industrial electrification.

The electrification of low-temperature heating and steam will be deployed in the short term across different sectors. Electric boilers have technical advantages compared to gas boilers: they have fast ramping rates, higher availability and lower standby losses. In addi tion, they bring flexibility to the electricity system. They operate during hours with high renewable energy infeed in conjunction with thermal storage or in parallel with conventional boilers. Industrial heat pumps have the potential to significantly lower energy consumption, given their coefficient of performance (COP) of 3 or more. They can currently provide heat for temperatures of up to 200°C [HP-1] and more. A good example is the implementation of industrial heat pumps in the food and drink sector, but their utilisation is also being consid ered in heavy industry.

Electrification options for other processes, like high-tem perature heating, the (partial) electrification of glass production, shore power for ships, the electrification of trucks, etc. are gradually being tested or are starting to be rolled out. The electrification of heavy transport is expected to pick up in the near future. Electric steam cracking for high-value chemicals or electrolysis tech nologies for steel are expected to develop well beyond 2030. In addition, carbon capture, utilisation and storage processes and the domestic production of green mole cules result in increased power consumption.

→ Either we impose the same rules or similar rules to installations all over the world, or we find ways to help industry to finance these huge investments.

PETER CLAES, DIRECTOR AT FEDERATION OF INDUSTRIAL ENERGY CONSUMERS FEBELIEC (BE)

Most effective methods to reduce our fossil fuel dependence

As society is currently facing both an energy crisis and a climate crisis, we at Elia Group are convinced that solu tions that tackle both crises at the same time must be prioritised and accelerated.

As shown by the sector deep dives (see Annex B) and summarised in Table 1, the electrification of industrial processes combined with access to low-carbon elec trons is the first and most important method that is mature and available at scale for industry to reduce its dependence on fossil fuels.

“

→ Demand response is very important. It needs to be publicised. In fact, right now, if we were to help stabilise the grid with our virtual battery and our peak load were to increase, we would have to pay more than we do now. That shouldn’t be allowed. There should be a system change that provides incentives for demand response.

INGE SCHILDERMANS, GENERAL MANAGER AT NYRSTAR BELGIUM (BE)

TABLE 1 - PATHWAYS TO CLIMATE NEUTRALITY AND THEIR IMPACT ON THE CURRENT CLIMATE AND ENERGY CRISES

Pathway to climate neutrality

Energy efficiency

Impact on climate crisis Impact on energy crisis Maturity Explanation

Energy efficiency is a ‘no-regret’ and a high priority area.

The combination of electrification with low-carbon electrons (mainly stemming from RES development) is the fastest and most efficient lever to reduce industry’s exposure to fossil fuels and its CO2 emissions.

“

Electrification

H2

Low-carbon molecules

Can be scaled up fast as many applications can be electrified with proven technology

Provided sufficient green electrons are available

Electrolyser technology to be scaled up. Blue H2 mature but CO2 infrastructure to be developed first

Electrification is mature for low- and medium temperature heating. However, other technologies (e.g. e-cracking, molten oxide electrolysis) are still in study or pilot phase.

Low-carbon molecules will mainly be used to replace fossil fuels as feedstock but also as an energy carrier for industrial sectors that cannot fully electrify their processes.

As green electrons will be scarce in Belgium and Germany, import infrastructure for green molecules must be developed. Imports will also speed up the reduction of industry’s exposure to fossil fuels, as more green electrons will be available locally for direct electrification.

→ Electrification is one of the key decarbonisation strategies for industry. In particular, if you look at the energy consumption of industry, 70% of the energy consumed is used to produce process heat. Today a large extent of process heat is produced by burning fossil fuels. However, a large portion of this process heat can be directly electrified by applying technologies that are already available today, such as heat pumps or electric boilers.

DR. JULIA METZ, LEAD INDUSTRY POLICY AT AGORA INDUSTRY (DE)

Enhanced circularity

CCUS

Depending on application. For example: Secondary steel making is proven technology

New processes for chemical recycling of plastics are in demonstration phase

Enhanced circularity has a positive impact on the overall carbon balance. Some processes, like the chemical recycling of plastics, are very energy intensive, leading to an increase in energy (and electricity) consumption.

Circularity reduces exposure to fossil fuels for the production of feedstock, in case sufficient renewable energy is available to avoid an increase in energy-related emissions (on the short term).

CCUS technology proven for high concentrated CO2 streams, less for lower concentrated streams.

Transport and storage to be developed

Carbon capture, utilisation and storage reduces CO2 emissions, but doesn’t reduce exposure to fossil fuels. Technology for less concentrated CO2 streams to gain maturity.

“→ The current energy crisis is a massive challenge for industry. At the same time, our planet’s boundaries have been reached and we need to transform our economy immediately to reach climate neutrality. The good thing is that the decarbonisation of industry can address both challenges and many required technologies already exist. What we need now is the right political and regulatory framework to enable this transformation.

PROF. DR. BARBARA PRAETORIUS, SUSTAINABILITY, ENVIRONMENTAL ECONOMICS AND POLICY AT HTW UNIVERSITY OF APPLIED SCIENCES IN BERLIN (DE)

SPEED UP DEVELOPMENT OF RES TO DRIVE PRICES DOWN FOR SOCIETY AND INDUSTRY

The electrification of industry requires access to affordable, low-carbon electrons. The accelerated development of renewables (both domestic and foreign, through imports) is needed to drive down electricity prices. To ensure that the benefits of renewables are felt by consumers, mechanisms like PPAs, CfDs or direct investment in RES are necessary. Barriers to participation need to be reduced. As green electrons will be scarce in Belgium and Germany, investments in import capacity for green molecules will be required.

Accelerated RES deployment as precondition for electrification

Today’s surging gas prices are mirrored in electricity prices. Industrial electrification is at risk of slowing down or coming to a halt if electricity prices continue to follow the cost of marginal gas production units most of the time.

To avoid this, we need to go all out on the development of infra-marginal (i.e. cheaper) low-carbon electrons. The main lever for doing so over the next 10-20 years will be to accelerate RES build-out. Accelerating renewable development will not only reduce emissions, but will also make Europe more energy independent and resilient.

The availability of sufficient ‘affordable’ low-carbon elec trons is key for industry to mitigate the impact of high gas prices and for taking decisions about long-term elec trification investments.

The dampening effect of RES on power prices can already be observed. Figure 12 shows the negative correlation between the share of the load covered by renewable energy in the 50Hertz area and the day-ahead electricity price in Germany: in 2021, the daily RES infeed in the 50Hertz area exceeded 90% of the local load over 42 days. On those days, the electricity spot price reached an average of €45/MWh, well below the annual average of €97/MWh.

FIGURE 12 – RES SHARE IN 50HERTZ AREA VS. GERMAN DAY-AHEAD PRICE (2021)

Daily average day-ahead price for Germany [€/MWh]

450 400 350 300 250 200 150 100 50 0 -50 Daily RES share in the 50Hertz area [%]

0% 20% 40% 60% 80% 100% 120% 140% 160%

The current energy crisis has made it clear that compa nies that committed to renewable energy (PV, onshore and offshore wind, etc.) early on are in a stronger and more resilient position today. It has made their overall business more robust, since investing in renewable energy is a long-term commitment that delivers price stability.

By investing in renewable technologies or by concluding long-term contracts (so-called Power Purchase Agree ments, or PPAs), consumers benefit from price stability in return. They hedge their risk by locking in the prices of these resources over a longer time period. In times of low gas prices, this might come at a premium cost, whilst in periods of crisis, this will result in considerable bene fits. Access to low-carbon electrons will therefore be key for keeping and attracting new industries to Europe, Belgium and Germany.

FIGURE 13 –30 24 18 12 6 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

UPTAKE OF CORPORATE PPAS IN EUROPE (LEFT) AND ACTIVITY ON COUNTRY LEVEL (RIGHT) [BNEF-1]

Annual (GW)

“

→ BASF follows a make-and-buy strategy. ‘Make’ means that we actively participate in offshore wind farms to have access to electrical power at producer economics. We also have a buy strategy meaning that we conclude long-term power purchase agreements at competitive prices.

“

to watch

It pays off to invest in renewables, both for industry and society

→ One way for industry to access affordable green energy is through long-term contracts with renewable energy providers. To make sure that all companies have the opportunity to access these long-term contracts, it’s important to improve the current regulatory framework. This will also help to safeguard investments in renewable energy projects.

JULIA METZ, LEAD INDUSTRY POLICY AT AGORA INDUSTRY (DE)

Long-term price stability at an affordable cost

This evolution can be facilitated by lowering the entry barriers for concluding these long-term contracts. This could be achieved by providing credit guarantee schemes (e.g. Spain and Norway [ACE-1]) or by brokers that set up a ‘pooling’ for PPAs, allowing also smaller players to get access to these kinds of contracts. Also, an evolution towards products with shorter tenures (i.e. contracting duration) can significantly reduce entry barriers. The standardisation and harmonisation of these market products will foster competition and add to an efficient and transparent price formation. Efficient dispatch incentives must be maintained in the system [ELI-5].

The above mechanisms deliver the benefits of RES to end consumers, while providing them with long-term price stability at an affordable cost. The cost projections for RES show a clear downward trend in the future, making the corresponding benefits for consumers even more important (See Figure 14 for projected Levelised Cost of Energy (LCOE) of new investments for different technologies [BNEF-2]).

Discussions about the market design review launched by the European Commission are expected to look into long-term contracting options for offtakers and mecha nisms providing price stability.

It is important to mention that PPAs or investments in renewables are not limited to domestic RES projects. Direct investment in (or virtual PPAs with) crossborder RES projects in markets that show similar electricity price evolutions can also provide a (finan cial) hedge against domestic price volatility.

This works well as long as the price patterns between the bidding zones of offtakers and the relevant RES projects remain similar. Generally, this is the case for strongly interconnected bidding zones. These investments or contracts do not provide a ‘perfect’ hedge (as the so-called base risk between the RES bidding zone and offtaker bidding zone persists), but can already cover a significant share of the risk (financial hedge). Sufficient interconnection is key, though, as eventually the green electrons should be able to flow physically to consump tion (physical hedge).

FIGURE 14 – LCOE OF DIFFERENT NEW-BUILD POWER GENERATION TECHNOLOGIES IN GERMANY [BNEF-2]

Combined Cycle Gas Turbines (CCGT)

Offshore wind (including platform, export cable and onshore platform) Onshore wind

Utility PV

DR.

profile

The high capacity factor of offshore wind makes it closer to baseload generation compared to PV and onshore wind 1. It is particularly interesting for indus trial loads. Even though industry has the potential to provide flexibility to the power system (see Key Finding 5), it is expected that a substantial part of its demand will remain baseload.

The development of domestic offshore wind in Belgium and Germany is a no-regret. As both countries are short on domestic RES potential, the development of offshore wind beyond their borders will be required.

This comes with some additional advantages: firstly, connecting to foreign, far offshore wind reduces fluctua tions (given the low correlation of domestic and foreign wind) and leads to a more baseload profile [ELI-1]; addi tionally, the capacity factor from these wind farms can be higher than those from domestic ones (see Figure 15 with average historic offshore wind speeds). Increased interconnection is therefore important for the future energy system.

FIGURE 15 – AVERAGE OFFSHORE WIND SPEEDS IN THE NORTH SEA AND BALTIC SEA (SOURCE DATA: RENEWABLES.NINJA [REN-1], VISUALISATION: BASEMAP, NATURAL EARTH [BAM-1])

1 Concentrated solar power, or combinations of wind and solar in favorable RES areas, might also lead to a more baseload profile and must be monitored closely.

Far offshore increases the capacity factor and leads to a more baseload

Need for accelerated RES deployment in Belgium and Germany

In Belgium, the rollout of renewables will speed up in the run-up to 2030.

In 2021, the domestic RES production of solar and wind energy amounted to 15.4 TWh in Belgium. By 2030, the volume of RES is expected to increase to approximately 45 TWh (REPowerEU scenario, 2030 in [ELI-3]).

With Triton Link, Belgium plans to build a 2 GW intercon nector to a Danish energy island that will initially have 3 GW of offshore wind (that will extend to 10 GW). As a rough estimation, this adds another 8 TWh if we assume 2 GW of offshore wind and a capacity factor of 50%. The prolongation of 2 GW of nuclear capacity, as discussed by the Belgian government, would add another 10-15 TWh of low-carbon electrons, bringing the total amount to approximately 70 TWh 2

Renewable and low-carbon electricity can also be imported (or exported) over interconnectors. The further acceleration of RES deployment can help Belgium to reduce its dependence on fossil fuels by 2030. Indeed, the total Belgian electricity demand is expected to exceed 100 TWh in 2030 (113 TWh according to [ELI-2]).

In the 50Hertz area, an ambition of 100% RES by 2032

With its “100 percent by 2032” strategy, 50Hertz aims to enable the development of an additional 75 TWh/year of renewable energy production in its area from 2019 until 2032: enough to cover 100% of the projected demand of 135 TWh over the course of a year. This will be a strong driver for industry to settle itself in this area, given the access to green electrons. At a country level, the govern ment is changing the boundary conditions for the urgently needed further acceleration.

Need for steerable capacity to complement intermittent RES

As demonstrated in Elia Group’s 2021 study ‘Roadmap to Net Zero’ [ELI-1], a system based on a high share of renewables has a need for steerable capacities to over come periods of one to three weeks with low wind and solar conditions: the so-called ‘dunkelflaute’. The ‘Roadmap to Net Zero’ study estimated a need for 7.5-15 GW of steerable capacity in Belgium and 40-70 GW in Germany by 2050.

These steerable capacities are important for industry in order to have a reliable power system that delivers in terms of their expectations, especially since a part of industry will remain baseload and cuts in power supply often result in very high costs or damages to industrial installations.

In terms of technology, these steerable capacities could be (non-exhaustive list): hydrogen fired gas turbines, small modular nuclear reactors (once available, most likely beyond 2040), biomass plants and (pumped) hydropower, gas-fired units with CCUS, long-duration demand side flexibility or batteries and others. The final choice will be decided on the basis of technological readiness, economic viability and political orientation. Additional flexibility in industrial processes has a positive impact on the amount of steerable capacity needed.

→ No energy transition without storage: in combination with demand side flexibility, stationary large-scale storage allows for a more efficient use of renewable energy and provides industrial consumers with green electricity to power their processes.

BUSINESS DEVELOPMENT AT CERQ BY JENABATTERIES GMBH (DE)

2 Assuming 5 TWh of biomass and Run-of-River, source [ELI-1])

AXEL KAHL, HEAD OF

“

Green electrons will be scarce – intelligent use needed to ensure biggest benefit for society

Belgium, Germany and Europe as a whole are short on renewable potential. They will not be able to produce their combined electricity need for direct electrification and production of green molecules on the basis of their domestic RES potential alone [ELI-1].

Belgium and Germany therefore need to work together with countries that have excess RES potential. Their location in terms of the North Sea (and Baltic Sea), with a vast potential for offshore wind, provides plenty of opportunities for doing so, for example by developing hybrid interconnectors. As both countries will be short on low-carbon electrons, Belgium and Germany also need to develop import capacities for green molecules as a no-regret.

The production of the needed green molecule volumes for Belgium and the 50Hertz area will require 56 TWh (ELEC scenario) to 83 TWh (MOL scenario) of electricity in Belgium by 2050 and 34 TWh to 53 TWh in the 50Hertz area. This electricity consumption will not necessarily be located in Belgium or Germany, as green molecules can be easily imported.

Another important aspect is that green molecules are to be used primarily in applications that cannot (efficiently) electrify, like feedstock for industry, part of high-tem perature heat, or part of heavy transport. Building the infrastructure for low-carbon molecules that connects industrial clusters is therefore a no-regret. A framework needs to be created in which green molecules become competitive, for example through a strong EU ETS framework, to accelerate the reduction of our exposure to fossil fuels.

From an energy crisis perspective, the combination of an accelerated development of RES for direct electrification (leading to strong efficiency gains in transport, heating, etc.), limited domestic molecule production and the substantial import of green molecules will accelerate the reduction of fossil fuel dependency in Belgium and Germany.

→ Electrification will be the first lever in decarbonising the food and drink industry. Our companies are widely dispersed and located on lower voltage levels, adding to the challenge for future connection reinforcements. Timely anticipation and close collaboration between the sector and grid infrastructure companies is indispensable to achieve our targets. .

TOM QUINTELIER, ENVIRONMENTAL/ ENERGY ADVISOR, FEVIA (BE)

ACCELERATE THE BUILD-OUT OF THE TRANSMISSION GRID AS AN ENABLER FOR THE INDUSTRIAL TRANSITION

The regulatory framework must allow for anticipatory grid investments to keep pace with the industrial transition. Project lead times for grid infrastructure (study, permits, realisation) must be shortened significantly. An early view of the future needs of industrial clusters is key to making sure the right electricity transmission infrastructure is developed in time. Finally, an increase in a technically skilled workforce, a stable supply chain that can scale up fast and right investment framework need to be put in place to enable the successful realisation of the infrastructure projects.

Need for a clear view of the future needs of industrial clusters

A large share of the increase in industrial power consump tion will take place in industrial clusters. To anticipate the needs for infrastructure in an efficient way, close cooperation between industry, associations, system

operators and national, regional and local policymakers is required at the level of each individual cluster. Industry and related associations can provide insights into their future energy demand. Policymakers can provide more insights into industrial policy and the strategic sectors they want to develop or plans they have to attract new industries to certain areas.

For this, Elia and 50Hertz plan to set up a structured approach to continue this close collaboration with indus trial partners and associations. Existing local platforms regarding these matters will be reused to the fullest extent possible to ensure the most efficient approach.

Whilst a large share of power demand will originate from industrial clusters, also the more decentralised sectors of industry (e.g. the food and drink sector) will see its elec tricity consumption increase in the future. To capture this trend, Elia is setting up close collaborations with aassociations, e.g. like VOKA and UWE.

Elia and 50Hertz will leverage the gathered data for the industrial clusters and more decentralised industries to help refine the future Federal Development Plans (FDP) in Belgium and the Netzentwicklungsplan (NEP) in Germany (see Figure 16). These overarching plans for power infrastructure will then integrate the needs of industry with other needs (residential consumption, transport, interconnectors, RES development, etc.) to allow for an optimal planning of infrastructure.

“→ Electrification will be key in the plans of all industrial players to achieve net zero. It is therefore essential that the necessary infrastructure will be in place to meet the needs of industry. UWE is ready to support Elia in setting up close collaboration with the Walloon industry, including companies that are not part of a specific regional cluster, in order to identify their needs in terms of electrification..

PIERRE MOTTET, PRESIDENT AT UWEUNION WALLONNE DES ENTREPRISES (BE)

→ Our companies depend on adequate infrastructure in their efforts towards a climate neutral Europe by 2050. In this journey, the electricity grid will play a crucial role and may not be a bottleneck in their sustainability efforts. By executing this study, Elia takes first steps to assess the industrial needs. In addition, a collaboration on a suitable permit framework will be essential to effectively realise the necessary infrastructure.

HANS MAERTENS, MANAGING DIRECTOR AT VOKA - VLAAMS NETWERK VAN ONDERNEMINGEN (BE)

“

→ A proactive approach to grid connection and reinforcement planning is essential for realising the energy transition and full decarbonisation of industry. Such optimal planning relies on accurate forecasting of locational load, which highlights the importance of anticipatory input from industry on its needs for electrification.

FROM PROJECTED INDUSTRY NEEDS ON CLUSTER LEVEL TOWARDS A HOLISTIC GRID DEVELOPMENT PLAN

Bilateral exchange Elia and 50Hertz and industries / associations in cluster to capture future plans in an early stage

Consolidation of results by Elia and 50Hertz on cluster level

Discussion cluster results by industry/associations/policy makers/system operators

Results for cluster used as input in the Federal Development Plans by Elia and 50Hertz

Elia Key Account Managers

and 50Hertz corporate development and customer departments

Scenario building by Elia and 50Hertz teams

Discussion and fine-tuning results with industry, associations, local/ regional/national policy makers and system operators

Check against industrial policy objectives

Agreement on future industrial needs scenarios per cluster

Cluster scenarios serve as input in the Federal Development Plan exercise

Together with all other relevant data (production park, total consumption,…) the transmission grid needs are calculated

JOACHIM GOOVAERTS, EXTRA HIGH VOLTAGE SYSTEM DEVELOPER AT ELIA

FIGURE 16 – DIFFERENT STEPS FROM GATHERING INFORMATION AT AN EARLY STAGE FROM INDUSTRIES TO A HOLISTIC GRID DEVELOPMENT PLAN

Need for a regulatory framework that facilitates anticipatory investments

Industrial electricity demand is expected to increase by up to 50% (BE) and 40% (50Hertz area) towards 2030 3 (see Key finding 1). The major part of this increase will be concentrated in industrial clusters, making the launching of grid reinforcements for these clusters today a no-regret.

The precise speed of industrial decarbonisation and the exact increase in industrial electricity consumption in the lead-up to 2045/2050 differs between scenarios. However, it is clear that electrification will play a major role in all investigated scenarios – more than doubling in comparison with the level of today’s industrial electricity use - meaning that the required infrastructure must be ready. The regulatory framework must therefore allow for, and support, anticipatory investments.

Such an anticipatory approach comes with several bene fits. First, it will ensure that the grid infrastructure is developed in time and will act as an enabler for the indus trial transition towards net zero. This is key for allowing the electrification of industry in Belgium and the 50Hertz area and hence to anchor industry in both regions by making it more resilient. Second, taking a holistic approach that considers future evolutions results in a more efficient grid build-out compared to an approach that deals with (firm) industrial connection requests in an incremental way. This is especially important, as the elec tricity demand of industry will rise significantly over the next few decades. Finally, such an approach will allow the proactive development of additional hosting capacity for new industries to connect to the grid in dedicated areas. Leading infrastructure will continue to attract industrial innovation projects to Belgium and Germany.

It goes without saying that a similar approach is needed for the development of infrastructure for the transport of low-carbon molecules and CO2 from and towards industrial clusters. Having the infrastructure available on time is of utmost importance for the future of industry in Belgium and the 50Hertz area.

3 The described increases do not include any potential local hydrogen or synfuel production. If the production is carried out locally, the challenge will further increase.

“→ The decarbonisation of industry is a huge societal challenge that requires efforts from all parts of our economy. The power infrastructure is thereby a crucial element needed for a successful transformation. To develop this power infrastructure quickly and in line with industry’s demands, we need closer cooperation between industry, infrastructure providers and policymakers on a local level. Such a collaboration could take place via regional industry platforms and could allow for a proactive development of the required infrastructure.

“→ In 2018 we received ten connection requests. In 2021, this number has risen to 100 with capacities typically ranging from 200 to 2000 MW per customer. We need to rethink our processes and become faster in grid expansion: not only for building powerlines, but also for creating new substations and extending existing ones.

DR. BERND WENZEL, MANAGER OF KOMPETENZZENTRUM AT KLIMASCHUTZ IN ENERGIEINTENSIVEN INDUSTRIEN (DE)

FREDERICK JAHNS, HEAD OF REGIONAL GRID PLANNING AT 50HERTZ

A holistic grid approach for leading infrastructure

Grid infrastructure planning has to be done on a holistic level, taking the evolution of production, intercon nector capacity and all loads into account. This exercise is performed by Elia and 50Hertz in preparation for the Federal Development Plan and Netzentwicklungsplan respectively. The following paragraphs focus on Belgium and the 50Hertz area, with a specific emphasis on some of the grid planning aspects that are especially relevant for industry.

Both Elia and 50Hertz have observed a strong increase in connection requests from industry. The projected increase in electricity demand from industry, along with rising requests for battery connections, means it is a challenge to connect all these volumes in a timely way to the power grid.

It is clear that new substations and transformers are required to connect these industrial loads. Alongside infrastructure development and reinforcement, flexible connections of industrial consumers can speed up their connection and ensure a more efficient use of the grid. Flexibility in operational processes (e.g. power to heat, batch processes or electrolysis processes) can reduce the load on adjacent grid elements (lines, cables, trans formers etc.) in overload situations (see Key Finding 5 and Lever 4 for more information).

Additionally, the significant volume of battery projects in the pipeline could support the faster connection of indus trial and other loads. Putting in place a framework that incentivises batteries to charge or discharge at the right moments and in the right place can prevent overloads across the grid. Schemes for an optimised battery (and other flexibility) exploitation based on a global system level, including local congestion constraints, should be further investigated with all relevant stakeholders.

Elia Group is investigating (and, in some cases, progressively implementing) innovative solutions to further increase grid utilisation and fasten the connection of additional industrial loads. These measures are a no-regret, both in the short and long term and include:

1. Dynamic Line Rating: DLR takes local weather conditions (wind speed, ambient temperature, solar radiation…) into account to evaluate the maximum transfer capacity of overhead power lines, thus using the full potential of existing assets;

2. Curative operation: curative operation means that, after the failure of a grid element, transmis sion system operators take fast remedial actions to bring the flows back within permanent secu rity limits. By doing so, it can increase the amount of available capacity compared to a classic n-1 approach, in which flows need to remain within permanent operational limits, even after a fault occurs;

3. Direct T-connection to the EHV grid: Elia Group is investigating solutions to facilitate direct connec tion to the extra-high-voltage grid (T-connection), reducing the need for vertical reinforcements and thus speeding up the connection process.

→ The competitiveness of our industry and attractiveness of the region will be driven by the timely availability of required energy infrastructure. Our industry needs access to low-carbon electrons and molecules, as well as ways to transport captured CO 2.

FREDERICK JAHNS, HEAD OF REGIONAL GRID PLANNING AT 50HERTZ

A CLEAR NEED FOR TODAY’S CONDITIONAL GRID REINFORCEMENTS IN BELGIUM

The timely realisation of the Ventilus and Boucle du Hainaut projects is a precondition for enabling large-scale industrial electrification in Belgium. The Princess Elisabeth Island will collect green elec trons from 3.5 GW of new offshore wind, along with interconnectors to Denmark via the Triton Link (2 GW hybrid interconnectior) and the UK (Nautilus).

Ventilus and Boucle du Hainaut are essential for bringing this renewable energy to land.

The projected pace of industrial electrification in this study confirms the identified projects in the Federal Development Plan [ELI-3] and makes the realisation of some of the investments listed as ‘conditional’ for the reinforcement of the internal backbone in the Antwerp region (in particular, initi atives 39, 40, 41 in Section 4.5.1.2 of the FDP [ELI-3]) essential. A proactive approach - not one which involves waiting for concrete connection requests - is needed to provide industry with the capability to electrify its processes. These conditional invest ments only make sense after the realisation of Ventilus and Boucle du Hainaut.

It is of strategic importance to ensure the connec tion of grid users to an adequate voltage level. A holistic planning of the optimised connection of industrial grid users is required. By switching some of the large consumers (or consumers with increasing power demand) to higher voltage levels (e.g. from 150 kV to 380 kV), some margin is created for the electrification of other industries in the underlying grids.

Consequently, new 380 kV substations need to be built in the industrial clusters to increase the number of connection points to the 380 kV grid

and to connect industrial users (as outlined in Section 4.4.2 of the Federal Development Plan). This is the most realistic and economically viable pathway to allow for the upcoming electrification investments from industry.

A high-level exercise performed for the Antwerp cluster on the basis of the electrification projects identified in this study (see Annex B ) demonstrated that such an approach would reduce the need for reinforcements and the restructuring of the local 150 kV grid (compared to a situation where no change in voltage level takes place). Of course, such an approach has to be discussed with the involved industries. The same reasoning applies to hosting capacity in 36 kV and 70 kV grids. The Boucle du Hainaut project creates room for the further elec trification of the 150 kV grid and provides access to RES. The relocation of medium grid users to the 150 kV grid will allow capacity to be liberated in the underlying grids. This also applies for the 36 kV and 70 kV grids in the Antwerp cluster.

Finally, the strong projected electricity demand increases that are seen in the long term (2040, 2050) will in turn lead to the need for the integration of large amounts of additional (green) generation and the creation of additional onshore and offshore interconnection capacity. In turn, these three evolutions will lead to additional rein forcement needs for the overall Belgian backbone, potentially even to a need for new corridors. This is why different study projects have been started within Elia, targeting the long-term facilitation of the energy transition, as mentioned in Section 4.6 of the Federal Development Plan [ELI-3]:

▶ study about the further development and inte gration of a meshed offshore grid;

▶ study about the further development of onshore interconnection corridors; and

▶ study about the further reinforcement of the internal backbone.

ADDITIONAL INDUSTRIAL LOADS IN THE 50HERTZ AREA HAVE A POSITIVE EFFECT ON NATIONAL STRUCTURAL CONSTRAINTS, LOCAL REINFORCEMENTS ARE NEEDED TO ACCOMMODATE GROWTH IN CLUSTERS

Additional industrial load in the 50Hertz area tends to reduce the north-south power flows through Germany.

Thanks to its location near the Baltic Sea and its large potential for onshore wind and PV, the 50Hertz area is a large producer of green electrons: in the first half of 2022, 68% of its electricity demand was covered by renewable energy and this is set to reach 100% by 2032.

At the same time, the largest share of German industry is located in the western and southern part of the country. This has led, during the last decade, to the emergence of structural constraints on the power grid, which has to transport massive amounts of renewable energy from the generation hot spots in the north to consumers in the south of the country. Grid expansion and reinforcement projects have been realised (Southwest Inter connector) or started (SuedOstLink). Until their completion, the observed grid constraints require remedial actions like costly redispatch.

Generally, adding industrial load in the 50Hertz area has a direct positive impact on north-south power flows and can reduce the costs needed to resolve grid constraints. In that sense, the electrification of existing industries and the attraction of new industrial settlements in the 50Hertz area is a major lever for the integration of renewable energy.

The location of new loads matters

Having industrial loads developed in the vicinity of renewable generation not only provides them

with access to green electrons, it also reduces the constraints on the grid within the 50Hertz area or can lower the need for additional grid expansion (compared with having the industrial load installed in other areas). As an example, this study investigates the use case of hydrogen production in Lubmin, a coastal city on the Baltic Sea. Lubmin is a landing point for offshore wind farms and gas pipe lines and has a strong 380 kV onshore power grid. Grid simulations for a limited amount of hours with high wind situations show that the installation of a 1 GW electrolyser would reduce the average grid usage in the 50Hertz area by 4% during these hours.

The rapid growth of industrial clusters will require local grid reinforcements and a switch to higher voltage levels

The fast increase in power demand in clusters will be a major challenge. Considering industrial load growth in Leuna, Hamburg and Berlin, local grid development projects are needed, including the expansion of existing substations with additional transformation capacity between the transmission and distribution grid; the connection of the industrial cluster to higher voltage levels (110 kV to 220/380 kV); and local reinforcements of the transmission grid. As some of these developments require more time than is needed for the adaptation of industrial processes, a leading infrastructure approach will be key to delivering the infrastructure needed for the electrification of existing processes and the development of new settlements.

→ At the Lubmin site, a land-based efficient gas infrastructure meets a high availability of offshore wind power. At the site of the former nuclear power plant, suitable areas and service water are available: there is no better location for a large electrolysis plant that generates hydrogen from electricity and water for feeding into the gas grid.

HANNO BALZER, HEAD OF ENERGY MANAGEMENT AT HH2E (DE)

→ We are, for example, proposing to speed up the permitting procedures for renewables. As you might know, today, it can last six to nine years to have the permitting process ready, for a wind park, for example. We now want to define go-to areas and make sure that, there, the permitting process is down to one year. The same goes for the permitting process for associated infrastructure, like grids.

URSULA VON DER LEYEN, PRESS STATEMENT ON 18 MAY 2022 [EC-4]

→ The competitiveness of our industry and attractiveness of the region will be driven by the timely availability of required energy infrastructure. Our industry needs access to lowcarbon electrons and molecules, as well as ways to transport captured CO 2.

RENAUD MOENS, GENERAL DIRECTOR OF IGRETEC (BE)

way

PERMITTING LEAD TIMES FOR GRID INFRASTRUCTURE MUST BE SUBSTANTIALLY REDUCED

Typically, it takes 10 years (7 for permitting and 3 for construction) to realise large grid infrastructure projects, while industrial investments (like power-to-heat, etc.) or large RES projects take 2 to 4 years. Projects like Ventilus or Boucle du Hainaut, which are essential for realising the energy transition, are progressing slowly due to long permitting lead times. 50Hertz has faced similar difficul ties with the SuedOstLink project.

As part of the REPowerEU Plan [EC-1], the EC is proposing to shorten the permitting lead times for renewables and grid infrastructure to one to two years. In October 2022, the European Council asked the European Commission to investigate the ‘fast-tracking’ of the simplification of permitting procedures in order to accelerate the rollout of renewables and grids including emergency measures on the basis of Article 122 TFEU’ [LEX-1].

Both the German and Belgian (and regional) govern ments have been working on simplifying and shortening permitting procedures. Further efforts are urgently needed in order not to lose the pace required for the energy transition and the electrification of industry.

Elia and 50Hertz are committed to working with policy makers and to coming up with constructive proposals to ensure a swift, open and transparent permitting process in close consultation with all stakeholders (see Box 4).

Elia Group is also committed to better anticipating future needs (e.g. needs from industry, etc.), reducing TSO study, procurement and construction lead times.

Last year in Germany, 50Hertz proposed a package of concrete measures to accelerate permitting processes. With the implementation of these measures this year, Germany has already taken a big step in the right direc tion; further efforts and measures are to follow.

FOCUS ON SUPPLY CHAIN, RESOURCES AND INVESTMENT FRAMEWORK

The build-out of the required infrastructure over the next decade will put enormous pressure on supply chains for raw materials and grid infrastructure. European and national policymakers need to closely follow this and put forward policies that secure supply chains, especially as a lot of these raw materials and equipments stem from outside of Europe. Close cooperation with manufac turers will be needed and supply chains will need to be scaled up fast.

The development of infrastructure requires a strong increase in the amount of skilled workers and an invest ment framework that allows the required capital to be secured. Policymakers should consider how to set up a technically skilled workforce to make the energy and industrial transitions happen. Regulatory frameworks for investment in infrastructure should enable attracting sufficient capital to perform the required investments. Indeed, next to investments in crisis measures to miti gate the effects of the current crisis, large investments are required to implement long-term structural solu tions.

Making sure infrastructure is available in a timely

PROPOSALS IN BELGIUM AND GERMANY TO REDUCE PERMITTING LEAD TIMES ARE THE FOLLOWING:

Elia and 50Hertz have identified different meas ures that can help to keep the real duration of the permitting process under control while ensuring the quality and robustness of permits.

1. Elia Group is advocating for the reinforcement of the public value of the entire electricity grid in legislation (as is the case already in Germany). This recognition of the grid’s value will provide (amongst other things) the legal basis for obtaining property rights that are needed for grid extension projects.

2. A significant acceleration of permitting proce dures can be achieved if environmental and nature legislation is simplified and clarified. If climate protection is considered alongside conservation measures and is directed towards decarbonisation in environmental impact assessments, progress on both renewable energy generation and grid projects will speed up. In Germany, improvements to environmental and nature legislation concerning onshore wind have already been made; similar measures for grid development are desirable.

3. We recommend the reduction of appeals against permit decisions since official proce dures already intend to encourage public participation through consultation and informa tion sessions. As is already the case for permits in Flanders (Belgium), an appeal against a deci sion should only be made if the complainant can prove direct and personal damage linked to the project. Ideally, an appeal should also only be receivable if the complainant had already raised

their concern during previous consultation periods. Therefore, it is important to encourage public participation early on in the process.

4. Public authorities need to be empowered to speed up permitting procedures. Additional staff, IT equipment and the necessary IT-related skills could make a huge difference. This will ensure that more permits can be handled in less time.

5. More exemptions regarding the spatial planning step for grid infrastructure should be secured for specific cases. As a concrete example, the regu larisation of an existing line takes 3 years before a building permit can be requested (adding 2-3 years to the timeline). In such case, going directly to permitting could save 2-3 years on the time line.

6. In Germany, we have put forward concrete proposals such as avoiding double-checks during the various permitting stages, earlier construction starts, simplified planning when mainly current routing is used, etc.

→ Close collaboration between 50Hertz and the permitting offices has brought positive results; we have received permissions for a couple of 380 kV lines over the past few months: we have seen tangible progress. However, further efforts will be needed to align the lead times with European and national climate targets, whilst at the same time keeping interactions with society both open and transparent.

NADJA BALLAUF, HEAD OF NATURE PROTECTION AND PERMITTING AT 50HERTZ

FOSTER FLEXIBILITY AS ACCELERATOR FOR INDUSTRIAL ELECTRIFICATION

The continued development of flexibility in industrial power demand enables industrial electrification in two ways. Flexibility facilitates the integration of renewables, optimises future electricity costs for industry and eases the connection of industry to the grid by tackling potential congestions. Elia Group’s ‘Consumer-Centric Market Design’ aims to remove barriers to providing flexibility, demonstrating the need for it to be implemented.

The future power system will require more flexibility

The main sources for renewable energy are intrinsically intermittent: their infeed varies on a daily, weekly and seasonal basis. As pointed out in Elia Group’s ‘Roadmap to Net Zero’ study [ELI-1], a balanced mix of onshore wind, offshore wind and solar power, combined with a high level of interconnection in Europe, will avoid a struc tural seasonal mismatch between supply and demand. Nevertheless, in a high RES system, steerable capacities and demand side flexibility is required to compensate for weekly and daily fluctuations in energy supply.

New, climate-neutral industrial processes can offer flexibility

While most energy-intensive processes run baseload today, a lot of future industrial processes can actually deliver flexibility. This study investigates real examples of flexibility from industrial partners. As shown in Figure 9, this flexibility can stem from: the production process itself (for example, through the adjustment of power infeed in the aluminium or zinc electrolysis process, or the time shifting of batch processes such as electric arc furnaces); supporting processes (for example, fuel switch for heating processes, short-term storage using energy supply devices in data centres); or built-in energy storage capacity (for example, industrial heat buffer or batteries).

The continued electrification of industrial processes will increase the amount of available flexibility: a move towards the DR-EAF route in the steel sector, the devel opment of power-to-heat in the chemical and food and drink sector, as well as the rise of electrolysis and synthetic fuel production will result in more flexible consumption patterns.

As industrial companies are redesigning their processes to reach net zero, flexibility is a key aspect to consider and its value in a high RES system should be part of the business case for electrification.

Flexibility as an inherent part of the business case for industrial investments towards net zero

Flexibility in industrial demand benefits industry, allowing it to align its consumption with periods where electricity prices are lowest or where long-term contracted renew able electricity is available (as-produced PPAs). It also benefits the power system as a whole, by reducing indus trial offtake in periods of low RES infeed, thereby having a positive impact on the need for steerable capacities. Industrial flexibility facilitates the integration of intermit tent renewables into the system and hence speeds up the reduction of fossil fuel dependence and related GHG emissions.

Against the rapid expansion in electricity demand, flexibility can also facilitate the grid connection. By reducing synchronous demand peaks in industrial clus ters, flexibility can optimise the use of the existing grid infrastructure, allowing for an immediate increase in the connection capacity and thus offering a solution to speed up the connection of electrified industrial processes. Flexible connection contracts for (a part of the demand of) industrial clients, alongside the develop ment of the grid, are an important lever for coping with fast-increasing, concentrated power demand and must be investigated with all relevant stakeholders.

Tackle barriers and provide right incentives for industrial flexibility

To enable the full flexibility potential of industry, an attrac tive framework needs to be created by first removing regulatory and financial barriers. Only then will industry be able to provide the flexibility that is needed in a system with a high amount of renewables. These barriers include the capacity component of the grid tariffs and regulations like the 7,000 hour rule imposed in Germany: companies with an annual electricity consumption greater than 10 GWh can benefit from individual grid fees if their consumption profile exhibits 7,000 full-load hours in a year. This regulation provides companies with a financial incentive to flatten the profile of their grid withdrawal and constitutes a barrier to flexible operation.

Efforts are also needed in terms of market design to facilitate the development of industrial flexibility (see Consumer-Centric Market Design in the next section). The current energy crisis has already shown the value that flexibility could bring to the system in the next decade. With price volatility on day-ahead markets skyrocketing, price arbitrage significantly reduces overall energy costs. With increased shares of renewables being integrated into the system, the opportunities to perform this arbi trage will further increase its inherent value. Elia Group is working on the development of a new market design for Europe which fosters development and the valuation of flexibility (including industrial flexibility) in the grid. At the same time, as part of its Scientific Advisory & Project Board, 50Hertz has commissioned a study to evaluate the socioeconomic welfare gains brought by industrial flexibility and investigate a possible tender design to foster its development.

→ We believe that demand side flexibility solutions play an important role in ensuring more energy security, lowering energy bills, and enabling the zero carbon energy transition. Therefore, Microsoft is implementing grid-interactive solutions to its data centres - as recently seen in Ireland.

“→ Nyrstar’s virtual battery has the potential to match electricity demand with intermittent production and to manage congestion in the electricity grid. As such, it will enable an even higher offtake of solar and wind energy while making our industry more resilient to volatile prices. A competitive European industry that operates on low carbon, sustainable energy: that’s what we’re going for!

INGE SCHILDERMANDS, GENERAL MANAGER AT NYRSTAR BELGIUM (BE)

RON POOTERS, BELGIUM DATA CENTRE REGION LEAD AT MICROSOFT (BE)

INDUSTRY COMMITMENTS TO ELIA AND

Elia and 50Hertz will continue to strengthen their close relationship with industry and related associations. By capturing their needs at an early stage, we can better anticipate the grid reinforcement that industry requires on its pathway to net zero.

However, our commitment to industry goes further than this. In partnership with our industrial clients, we are also bringing innovations to industry like a new market model to unlock industrial flexibility or a better standard to trace the origins of sustainable energy.

1Our first commitment: DEVELOPING THE GRID INFRASTRUCTURE WHICH ENABLES INDUSTRIAL ELECTRIFICATION

In their grid development plans, Elia and 50Hertz plan and design a robust grid infrastructure that takes into account information about the future needs of industry. To keep up with the speed of the industrial transition, the regulatory framework must allow the anticipatory investments that are required.

As a next part of the challenge, we are committed to accelerating the realisation of this infrastructure. Elia and 50Hertz are dedicated to coming up with constructive proposals to shorten permitting proce dures and reviewing their internal processes to speed up the delivery of infrastructure projects (construction, purchasing,…). Innovative ways to speed up the connec tion of industrial clients will be investigated.

By accelerating infrastructure projects, we will be confronted with several challenges. First, supply chain issues must be managed together with infrastructure manufacturers. Second, there is a strong need for an increase in the number of skilled staff to realise these projects. Finally, there is the need to increase financing volumes for this infrastructure. Policymakers, regulators and Elia Group will have to identify ways to overcome these challenges to realise the industrial transition in a timely way.

2Our second commitment: CREATING THE RIGHT CONDITIONS FOR INDUSTRY TO ELECTRIFY

In their role as market facilitators, Elia and 50Hertz will investigate and propose innovative solutions that enable the electrification of industry. We will consider new (flexible) connection products to speed up the volume of industrial clients that can be connected to the grid. At the same time, an analysis of grid tariffs will be performed to make sure that they provide the right incentives for flexibility in industrial processes.

Elia Group believes that the requirement included in Europe’s Clean Energy Package to make 70% of trans mission capacity available for cross-zonal trade must be kept, but should be implemented in a more intel ligent way in order to increase overall socioeconomic welfare and provide the right incentives for further interconnector build-out and to enable electrification. Elia Group proposed its ‘Flex-In-Market’ design in 2020 and will continue to consider and discuss solutions with stakeholders.

Our third commitment: BUILDING A CONSUMER-CENTRIC MARKET DESIGN

With increasing shares of intermittent renewables in the system, our power system is shifting: increasingly, demand will have to adapt to generation. The key to this paradigm shift is fostering the development of flex ibility and, in particular, unlocking ‘behind the meter’ consumer flexibility . This will enable customers to opti mally offer and develop flexibility in their sub-processes.

This is why Elia and 50Hertz are developing their “Consumer-Centric Market Design”(see [ELI-4] for more information). This upgraded market design is based on two pillars, each of which carries major benefits, as follows:

1. The first pillar involves allowing energy to be easily exchanged, on and behind the main meter, between the consumer and any other market party, allowing them to benefit from energy-as-a-service. For this purpose, we are currently working on a dedicated Exchange of Energy Blocks (EoEB) platform that easily fits into our current market system.

2. The second pillar concerns access to the real-time price. Elia Group is engaged in the development of a new model for the imbalance price that can easily be interpreted by consumers so they can valorise their flexible assets in accordance with real-time system needs.

In close cooperation with its stakeholders, Elia and 50Hertz are building an efficient and innovative ecosystem of digital services to support this paradigm shift.

TRAXES - A ONE-STOP SHOP FOR ENERGY SERVICES OFFERED BY ELIA, 50HERTZ AND THEIR PARTNERS

traXes provides a one-stop shop for energy services, developed by Elia and 50Hertz and its partners. This developer portal makes digital resources available to facilitate the energy services market, unlock flexibility and contribute to the energy transition. TraXes stands for ‘transparent access to energy data and services’.

The traXes platform provides consumers (or their service provider(s)) with seamless access to a panel of new services to valorise flexibility. As part of a first phase, the developer portal will focus on enabling our consumer-centric vision:

1. Consumer-Centric Market Design: exchanging energy blocks between market parties (EoEB);

2. Consumer Data Access: enabling the efficient sharing of consumer data between market parties, subject to the consent of the data owner; and

3. Energy Track & Trace: tracking the origin of elec tricity generation.

All these services are provided through APIs, so that users can include these functionalities in their own solutions.

EPIC - EMPOWERING THE CUSTOMER

The Elia Portal Interface for Customers (EPIC) embodies our desire to provide our customers with high-quality and user-friendly digital services, so that they can have better control over their data, their energy consumption, and their energy strategy more generally.

Learn more: https://www.elia.be/en/customers/ customer-tools-and-extranet/epic

→ With Energy Track & Trace, energy consumers will be able to match renewable energy 24/7 on a 15-minute basis within the Microsoft Cloud for Sustainability. This enables organisations to track renewable energy commitments in a more granular fashion, allowing for a data-driven sustainability journey with clear transparency and accountability.

MATHIAS VERGAUWEN, TECHNICAL ARCHITECT DATA AND AI FOR SUSTAINABILITY AT MICROSOFT

ENERGY TRACK & TRACE - SUSTAINABLE CHOICES MAKE A REAL DIFFERENCE

Energy Track & Trace (ETT) is an ambitious coopera tion, founded by Energinet, Elering, Elia and 50Hertz, to create an international solution for tracking the origin of renewable energy from source to consumer (including across borders) on a granular basis. The solu tion provides digital proof of the fact that sustainable choices make a real difference. This service is included in the traXes platform.

Learn more: https://energytrackandtrace.com/

“→ Transparency created through granular certificates for renewable energy is the fundamental basis for driving actions towards analysing the actual energy mix of a company. In addition, transparency is critical for developing a future energy mix strategy, including sourcing strategies and the ramp-up of decentralised energy supply at sites.

CARL-LUIS RIEGER, MANAGING DIRECTOR AT WEPA VENTURES (DE)

SECTOR DEEP DIVES

This annex provides more detailed insights into the sectors that were modelled for this study. It includes for each modelled sector an overview of today’s produc tion processes, the pathways to net zero, the evolution of electricity and low-carbon molecule demand and the potential flexibility options. All of these elements were defined in close collaboration with industry and will be continuously improved upon. Lastly, the main takeaways are given for the sector. The graphs with the transition pathways show a simplified view, in order to improve readability.

Figure A.1 shows the share of GHG emissions for the Belgian and German industry per sector. The most contributing sectors are ferrous metals, cement, petro-chemistry and food and drink. All of these sectors are modelled in detail. In total, industry in Germany emits approximately 180Mt of CO2 per year and in Belgium around 35Mt [CO2-DE] [CO2-BE]. FIGURE A.1 – SHARE OF INDIVIDUAL SECTORS IN THE TOTAL INDUSTRIAL GHG EMISSIONS (2019)

A.1 FERROUS METALS

Steel is the world’s most commonly used metal, accounting for 90% of global metal production. It is a strong and durable alloy consisting of mostly iron, along with carbon and other additives. It is essential to a wide range of applications from buildings and infrastructure to vehicles, tools and packaging.

A.1.1 Significance and contribution to GHG emissions

Primary steel-making is a carbon and energy intensive process. It is responsible for respectively 29% and 20% of national greenhouse gas emissions for the industry in Belgium and Germany [CO2-DE] [CO2-BE]. The emis sion intensity differs between the two main production processes:

1. Via the Blast Furnace - Basic Oxygen Furnace (BF-BOF) route, i.e. today’s most common production process for primary steel, the emissions are mainly linked to three process steps; i) the coking, sintering and lime making step, ii) the blast furnace and iii) the general heat production.

2. Via the Direct Reduction - Electric Arc Furnace (DR-EAF) route, the emission intensity is approx. 35% [BNEF-6] lower and mainly concentrated in one single process step: the reduction of the iron.

The energy intensity and carbon intensity of the secondary steel production process are approx. 85% [BNEF-9] lower than the traditional BF-BOF route since the most carbon intensive process step (reduction of the iron) is avoided and the steel making is done using an electric arc furnace.

A.1.2 Current production processes for steel

BF-BOF (PRIMARY STEEL)

Today, the majority of primary steel production is fuelled by coal, which is used in blast furnaces coupled with basic oxygen furnaces (BF-BOF), that reduce iron ores to iron and then iron into steel. The process relies heavily on coal acting as heating source and reducing agent, which makes it a very carbon intensive process.

DRI-EAF (PRIMARY STEEL)

A smaller amount is fuelled by natural gas, which is used in the direct reduction process that is usually combined with an electric arc furnace (DR-EAF). DR-EAF comple ments scrap-based EAFs, which can use direct reduced iron as a supplementary feedstock when scrap availa bility drops.

EAF (SECONDARY STEEL)

Secondary steel is produced based on scrap that’s fed into electric arc furnaces (EAF).

A.1.3 Evolution of production volumes

Production of primary steel is expected to slightly increase compared to 2019 levels in the Elia and 50Hertz areas.

The assumed increase in secondary steel is slightly higher thanks to an expected further increase in scrap recycling. However, changes remain limited since recy cling rates for secondary steel production are already very high in our regions and given the limited availability of scrap metal.

A.1.4 Pathways to net zero

On the short term, the most important step towards climate neutrality for the production of primary steel consists in avoiding the emissions from the use of coal in the BF-BOF route. This can be done by either performing CCUS or by going for a DR-EAF process. In case of the latter, to go towards full carbon neutrality, the natural gas in the process can be replaced by climate neutral hydrogen. On the longer term, full electrification using an electrolysis process is also a potential pathway: Molten Oxide Electrolysis (MOE) and Alkaline Electrolysis (AEL) [BNEF-5] [BNEF-6]. The latter are very electricity inten sive processes.

These changes would represent a significant shift in production methods for the steel industry. Investment decisions this decade will determine if a pathway to hydrogen conversion is established or a retrofit with CCUS. The considered pathways for Belgium and the 50Hertz control area are shown in Figure A.2 and A.3. These figures show the assumed relative share per tech nology.

CCUS

Existing fossil-fuelled processes can be blended with a mixture of alternative inputs (e.g. torrefied wood as a biomass, use of plastics or waste and hydrogen) to replace a significant portion of fossil fuels and reduce the GHG emissions. An example is the Torero project [ACM-1] which processes wood waste into bio-carbon suitable as input for blast furnaces. These projects boost circularity: it offers an alternative to the current incineration of the wood waste stream.

The addition of carbon capture, utilisation and storage (CCUS) systems can further reduce the GHG emissions of existing blast furnaces: promising technologies are currently being tested in pilot projects (e.g. Steelanol [ACM-2]) to boost the production of low-carbon steel by capturing carbon-rich industrial waste gases and transforming it into bio-ethanol using of a novel gas fermentation technology.

In the projected pathways, CCUS is used as a transitionary CO2 abatement option, except for in the FOS+CCUS scenario.

DR-EAF

As a first step, DR-EAF plants can be built and powered by natural gas which reduces the emissions significantly in comparison with the BF-BOF route and increases the electricity consumption. Once low-carbon hydrogen is available at affordable prices, the direct reduction furnace can be switched (partly) over to hydrogen. This technology plays a role in all scenarios, because of the high technology maturity. As the timeline for this availa bility of hydrogen is uncertain, assumptions were made in this study. A close follow-up is needed on future evolu tions.

ELECTROLYSIS FOR STEEL PRODUCTION

New ways for the production of steel are under research as well, mainly linked to electrolysis. There are two main forms of electrolysis under investigation: Molten Oxide Electrolysis (MOE) and Alkaline Electrolysis (AEL). Both are completely new production methods, with almost no shared infrastructure with BF-BOF or DR-EAF processes. It could be a promising technology, but still at a very early stage. The MOE process is very electricity intensive and flexible and will, when deployed, have a significant impact on the overall industrial electricity demand. However, because of the complexity for retrofit, it was not considered in our scenarios. A close follow-up on this technology and potential uptake is needed.

A.1.5 Evolution of the annual electricity consumption

The electricity consumption for the ferrous metals will increase over the coming decades, mainly driven by the transition towards the DR-EAF process and the possible

electrification of the casting and rolling step. This is shown in Figure A.4. The (potential) domestic production of low-carbon molecules is not included in these numbers.

A.1.7 Flexibility potential

In steel plants, electric arc furnaces are used to melt scrap to produce steel. They consume a large amount of electrical energy and the energy cost constitutes an important proportion of the total costs in making steel. Since they operate in batch mode and are rather flexible in terms of changing their electricity consump tion rate, they have a great potential for demand side management without losing efficiency or jeopardizing operational safety.

COST-EFFECTIVE STEEL MAKING WITH ELECTRICAL ARC FURNACES

Already today Steel plants in Germany and Belgium optimise their energy cost by taking into account time-based energy prices. On the one hand, by optimal scheduling of the activities based on the day-ahead market prices and on the other hand by reacting on system imbalances in real-time.

A.1.6 Evolution of the low-carbon molecule demand

The DR-EAF process will also create an additional demand for low-carbon molecules for the steel sector.

The increase in demand for these molecules is shown in Figure A.5.

A.1.8 Key messages

▶

The technology to make the primary steel production net zero is mature. Moving from the BF-BOF process to the DR-EAF process using natural gas mitigates a large part of the emissions. Next gradually replacing the natural gas by low-carbon hydrogen will allow for full carbon neutrality.

▶

The carbon intensity of the secondary steel production is already very low. Most of the emissions come from the final process steps, rolling and finishing. Research is currently ongoing to either electrify these steps or to replace the fossil fuels by climate neutral alternatives. ▶

The EAF-route will also increase the level of flexibility in the steel sector. The total amount of flexibility depends on the load factor of the furnace. ▶

The electricity and hydrogen consumption for primary steel production will significantly increase (see Figures A.4 and A.5).

FIGURE A.5 – PROJECTION OF THE LOW-CARBON MOLECULES DEMAND IN THE STEEL SECTOR

A.2 REFINERIES AND (PETRO)CHEMISTRY

The refining, petrochemical and chemical sector are closely interrelated. The refining step produces feedstock (naphtha, etc.) for the petrochemical industry, which in turn produces basic building blocks (high-value chem icals like ethylene, propylene, benzene and aromatics) that are used in the downstream chemical sector (next to other feedstocks).

Over the past years, a lot of efficiency measures were implemented in these sectors. Nevertheless, reaching climate neutrality requires a radical shift in produc tion processes, feedstock and energy carriers. Options range from electrification (e-boilers, heat pumps, elec tric cracking, etc.) to pyrolysis of plastic waste, use of carbon-neutral feedstock like H2 (or H2-derivatives such as ammonia, e-methanol,…) or biofuels, etc. In this study, the refineries and (petro)chemical sector are investi gated in three different categories:

A.2.1 Significance and contribution to GHG emissions

The refining and petrochemical sectors are both carbon intensive. The carbon emissions stem from the use of fossil fuels (both as feedstock and energy carrier) in the refining process and the process of cracking of naphtha and ethane into high-value chemicals. With the advent of carbon-neutral feedstock, stemming from increased (chemical) plastic waste recycling [IND], low-carbon H2 (and H2-derivatives) and biofuels, emissions will decrease. The deployment of these technologies is still in an early stage, but they have already proven the impact that they can have. Carbon-capture, utilisation and storage will nevertheless be the main driver for emission reduction in refineries and petro-chemistry.

Next to these high temperature and energy intensive processes, these sectors heavily rely on steam for the production of the final products. Using carbon-neutral technologies, like power-to-heat, has the potential to further drive down emissions.

A.2.2 Current production processes

The current production processes can be split up into the three aforementioned categories: production of feedstock, production of high-value chemicals and the production of final products. This study has modelled in detail over twenty of the most energy intensive processes in the refineries and (petro)chemical sector. For this a cooperation with Accenture was set up as well as close interaction with involved industries.

Today, a large share of the feedstock for the petro-chem istry and chemistry stems from refining crude oil. In this step, crude oil is heated and separated into its different fractions. The largest part of the output is diesel, gaso line and jet fuel, whilst the rest consists of products like naphtha, propane and ethane. Other feedstock for this step can come from waste plastics, H2-derivatives and biofuels.

Production of feedstock

Including refineries, ammonia, hydrogen, waste recycling, methanol, etc.

Production of HVC Production of final products

For the production of HVCs, the produced feedstock, ethane, propane and naphtha is cracked in order to produce ethylene, propylene and aromatics. This is a very carbon and energy intensive process.

These products are then finally further processed into a myriad of final products (chemical sector). The processes can be both endo- as well as exothermic, with steam providing most of the heat (where needed).

All steps face very different challenges to reach net zero and hence need different solutions.

A.2.3 Evolution of production volumes

Production of the final products are assumed to remain stable or to slightly increase. The feedstock on the other hand is expected to undergo some changes. Refinement of crude oil is expected to decrease over the coming decades because of a decreasing demand for diesel and gasoline. In our scenarios the capacity is almost halved, with 70% of the capacity remaining by 2045 (Germany) and 57% by 2050 (Belgium) [CCW]. This will reduce the amount of feedstock available to the (petro)chemistry. This gap needs to be filled by other types of feedstock (biofuels, naphtha stemming from chemical recycling of plastics into naphtha or directly into high-value chemi cals, etc.).

A.2.4 Pathways to net zero

There are many different pathways to net zero that will be employed in the refinery and (petro)chemical sector given the broad range of products. In this section, the focus is on some general transition pathways (Electrifi cation, Low-carbon molecules and CCUS) for the most energy intense processes. A general overview of the relative share of the current (Fossil fuels) and future production options (Electrification, Low-carbon mole cules and CCUS) can be found in Figure A.6, A.7 and A.8. [BNEF-3]. The graphs below show a simplified view on the transition of the (petro)chemical sector. The rela tive shares shown on the right focus on the transition of the different processes, without taking their respective energy intensity or production volume into account.

FIGURE A.6 – EVOLUTION OF THE FEEDSTOCK PRODUCTION TECHNOLOGIES FOR 50HERTZ/BELGIUM

FIGURE A.7 – EVOLUTION OF THE HVC PRODUCTION TECHNOLOGIES FOR 50HERTZ/BELGIUM

FIGURE A.8 – EVOLUTION OF THE FINAL CHEMICAL PRODUCTS

FOR 50HERTZ/BELGIUM

USING CCUS

CCUS has multiple uses in the petrochemical and refining sector. Since the refining process has inherent CO2 emissions that come from the distillation, the only way to make this process carbon-neutral (in terms of scope 1 and 2 emissions) is to use carbon capture, utili sation and storage. Next to uses for refineries, CCUS can also help making the cracking process carbon-neutral (see below), as well as traditional production of hydrogen (via SMR, ATR) and several carbon intensive final prod ucts (e.g. carbon black). This option is predominately applied in the FOS+CCUS pathway, but also plays a major role in the other pathways.

CRACKING PROCESS

Requiring high temperatures, the cracking process is one of the most carbon and energy intensive processes in these sectors. In order to mitigate its emissions, several alternatives are under investigation. First and foremost, CCUS can be used to reduce the total emissions coming from the process. This technology is already available and could eliminate up to 90% of the scope 1 emissions. However, this does increase the overall energy use. Other alternatives include electric cracking, where electricity is used instead of fossil fuels to provide the heat for the process. This technology is still in the development phase. From 2040 onwards a part of the cracking process is electrified in the ELEC scenario, taking up a larger share from 2045/2050. This electrification option leaves open the question of the flue gases of the process, which in today’s processes are re-used as energy carrier for the heating process. The final option is to use low-carbon (or bio-)molecules (H2 and derivatives) as process fuel. This technology is already mature, but still needs to scale up. Availability of biomass will be limited. In a MOL scenario an increasing share of the fossil fuels are replaced with these low-carbon molecules.

CARBON NEUTRALITY OF LOW TO MEDIUM TEMPERATURE HEAT

The low to medium temperature steam for the produc tion of final products is currently often provided by natural gas boilers. The technology to replace these boilers by carbon-neutral alternatives is available under the form of industrial heat pumps (low temperature heat) and electric boilers (up to medium tempera ture heat). From 2030 onwards, these technologies will replace a significant part of the gas boilers, with some projects being already executed today [BAS]. The uptake will increase further towards 2040 and 2045/2050. This switch to power-to-heat is retained in all three consid ered pathways.

ALTERNATIVE FEEDSTOCK

A final option for carbon neutrality is to replace a part of the fossil fuel feedstock with feedstock stemming from recycled plastics, biofuels or hydrogen derivatives. Both the recycling process and the creation of hydrogen deriv atives are energy intensive processes and are expected to become more present starting from 2030. This switch in feedstock is present in all three pathways.

A.2.5 Evolution of the electricity consumption

The electricity consumption in both the refinery and (petro)chemical sector will also increase. This is mainly driven by the electrification of heating and the usage of carbon capture. Beyond 2030, electric cracking also comes into play, which further increases the electricity consumption in the ELEC scenario.

Figure A.9 – Projection of the electricity demand for refineries and (petro)chemistry

A.2.6 Evolution of the low-carbon molecule demand

There is a strong increase in low-carbon molecule demand in the MOL scenario. This is driven by heating processes and hydrogen based cracking. In the other

two scenarios (FOS+CCUS and ELEC), the consumption slightly increases.

FIGURE A.10 – PROJECTION OF THE (LOW-CARBON) MOLECULES DEMAND FOR REFINERIES AND (PETRO)CHEMISTRY

A.2.7 Flexibility potential

Even with a high level of electrification, the flexibility potential in the refining and (petro)chemical sectors is expected to remain limited, unless energy storages are implemented. The biggest potential comes from the production of low to medium temperature steam where gas and electricity boilers can operate in parallel in the run-up towards 2045/2050. Subject to some process constraints, this would allow to switch between the energy carriers depending on market and grid situations. An example of this is shown in USE CASE 3 in the main section of the document.

A.2.8 Key takeaways

CCUS will play an essential role in mitigating emissions.

The electrification of low and medium temperature steam will happen in the coming decade.

Increased circularity will be essential in order to reduce the amount of fossil fuels needed for the production of plastics. ▶ Hydrogen combined with captured CO2 (synfuel) can be used as alternative feedstock.

The carbon neutrality of the cracking process is a large challenge, but is essential for the energy transition.

A.3 CEMENT

The cement and concrete industry plays an important role to help Europe achieve its strategic objective to build a climate neutral Europe. The product is used in foundations of wind turbines, passive housing, transport infrastructure, etc. The limited transport ranges for the industry’s end-product, concrete, anchor the cement industry to Europe.

A.3.1 Significance and contribution to GHG emissions

The cement sector is responsible for an important share of industrial GHG emissions. Unlike most other sectors, combustion of fossil fuels is not the main driver causing these emissions. During the production process, the calcination step is responsible for over 85% of all green house gas emissions. Around 35-40% of these emissions come from fossil fuel use for heating and can be abated by the use of a climate neutral alternative. The remaining 60-65% of these emissions are coming from the process itself [MCK-1] [CEM-1]. This means that avoiding emis sions per ton of product is very difficult. Therefore the main option to fully abate emissions is to capture the CO2 and either store or re-use it (CCUS).

Figure A.11 shows the different levers that Cembureau has identified over the complete value chain to mitigate the CO2 emissions from the cement and concrete sector. These include fuel substitution, efficiency measures, circularity, material mix, etc.

A.3.2 Current production processes

Today, most of the cement factories apply a similar production process. It consists of 5 steps. It starts with quarrying the raw materials. These are then transported to the crusher and followed by the raw meal grinder. The goal of these two steps is to decrease the size of the quarried material and to mix them. These materials are then transported through the preheater to the kiln. In this step, the carbon atoms are eliminated from the intermediary product after which they bind to oxygen, causing process emissions. The resulting material is then again grinded and finally stored.

A.3.3 Evolution of production volumes

For this study, the production of cement is assumed to increase towards 2030 after which the increase starts to flatten out. This is in part due to a reducing building area and on the other hand of improved material use in the production process.

A.3.4 Pathways to net zero

As mentioned before, one of the challenges for the cement production process are the emissions coming from the process itself. This means that carbon capture is needed in order to become fully carbon neutral.

For the remaining emissions, mainly coming from the kiln, there are two options to avoid the emissions: CCUS (Cement - CCUS) or electrification (Cement - CCUS & electrification). The assumed share per timeframe for both Belgium and Germany in this study can be found in Figure A.12.

USING CCUS FOR PROCESS EMISSIONS AND FOSSIL FUELS

Since both the required infrastructure and process tech nology will be available to capture process emissions, using carbon capture and storage can also play a role for the remaining emissions (kiln heating,…). The share of this option is assumed higher in the FOS+CCUS and MOL scenario.

USING CCUS IN COMBINATION WITH ELECTRIFICATION

The other option to reduce the remaining emissions is to electrify part of the heating of the kiln. This would essen tially eliminate all the non-process emissions. However, the technology development for this process is still in its early stages and needs to be proven, as temperatures of up to 1700°C [CMX] are required. This makes that the technology is not considered in the coming decade and only starts to play a role from 2040 onwards in the ELEC scenario.

FIGURE A.12 – EVOLUTION OF THE CEMENT PRODUCTION TECHNOLOGIES FOR 50HERTZ/BELGIUM

A.3.5 Evolution of the electricity consumption

With the transition towards carbon neutrality for the cement sector, there is also an increase in electricity consumption, shown in Figure A.13. This increase is

driven by CCUS, which is an electricity intensive process. In the ELEC scenario, there is an additional increase due to the (partial) electrification of the heating.

A.3.6 Flexibility potential

Today, the cement production process already offers some flexibility to balance the power system. This capacity is mainly coming from the grinding process step which is slightly overdimensioned and thus allows some shift in its consumption. The other process steps are currently not flexible and are likely to remain so when moving towards net zero alternatives.

A.3.7 Key takeaways

▶ CCUS is essential to render cement carbon neutral, so the necessary infrastructure needs to be available as well. The CCUS process itself will more than double electricity consumption of the sector.

▶ The potential for direct electrification is limited, however, if the kiln process is electrified, the energy intensity of the process would more than triple.

▶ An additional measure that can be taken to reduce the carbon intensity is to limit the amount of clinker used for concrete, whilst safeguarding product quality.

A.4 GLASS

The glass industry comprises five subsectors: container glass, flat glass, domestic glass, fibres and special glass.

It belongs to the energy intensive industries. The sector improved its energy efficiency over the last decades. The dependency on high temperatures in the production process poses boundaries to further progress with given technologies. Pilot projects test hybrid furnaces that could be heated with higher shares of electricity and studies explore the use of hydrogen [F4F].

A.4.1 Significance and contribution to GHG emissions

The glass sector emits less GHG compared to other sectors like ferrous metals, cement or petro-chemistry. The major emission source stems from the required heat to melt the glass within furnaces. These furnaces are operated on medium to high temperatures provided (partly) by combustion of fossil fuels. For both Belgium and the 50Hertz area, three subsectors where investi gated in more detail: flat glass, container glass and fiber glass. The transition towards carbon neutrality slightly differs between these three sectors with one constant element: increased electrification. Investigations on the use of hydrogen are ongoing.

The glass sector represents 0.5-0.7 Mt of CO2 emissions in Belgium and around 0.8 Mt in the control area of 50Hertz.

A.4.2 Current production processes

The current process for producing glass follows similar process steps for the three investigated subsectors. It starts with mixing the raw materials. These are then transported to the furnace where they are melted. The next steps to form the molten glass differ for the investi gated subsectors:

▶ In the case of flat glass, the molten mixture is put into a float bath and cooled steadily. After the forming step, the glass is annealed to reduce internal stress. Finally, the glass is cut to size and transported.

▶ In case of container glass, instead of a float bath, a blowing method is used.

▶ In case of fiber glass, an extruder is used in order to create the individual strands.

A.4.3 Evolution of production volumes

The production volumes of glass are expected to increase in this study, mainly driven by construction and the tran sition towards more circular solutions (e.g. glass bottles).

A.4.4 Pathways to net zero

The most carbon intensive step is the glass melting, requiring medium to high temperature heat. In order to render this process climate neutral, two technology pathways are investigated: full electrification or partial electrification in combination with carbon-neutral fuels. Capturing emissions could be an option as well, however the sector is relatively dispersed, hence not neces sarily having an efficient access to CO2 infrastructure. However, given the (limited) process emissions, some measures will need to be taken as a final step towards net zero. The same limitations apply for the access to hydrogen infrastructure.

Because of the differences in the forming step, the path ways to carbon neutrality differ between the subsectors. The main driver is the size of the furnace, which can be smaller for container glass. Thanks to this smaller size, the limited heat conductivity of glass is less important and thus a higher level of electrification is possible, even reaching 100% in some applications. For both fiber and flat glass this is not the case, but can reach up to 60% electrification via electric boosting using current tech nologies. The pathways for the different products are shown in Figures A.14, A.15 and A.16.

FIGURE A.14 – EVOLUTION OF THE FLAT GLASS PRODUCTION TECHNOLOGIES FOR 50HERTZ/BELGIUM

FIGURE A.15 – EVOLUTION OF THE CONTAINER GLASS PRODUCTION TECHNOLOGIES FOR 50HERTZ/BELGIUM

FULL ELECTRIFICATION

Under this option, all energy required to heat the raw materials is provided by electricity. Pilot projects on full electrification are operational and show promising results. However, the size of these furnaces is relatively small, which currently limits the types of glass that can be produced (mainly container glass) [PBL-1]. Full electri fication is assumed available from 2030 onwards.

PARTIAL ELECTRIFICATION

Partial electrification is already widely used in the glass industry. This is typically under the form of an electro booster which provides the first heating stage for the melting of the raw materials. The share of electrification can further increase with improved technologies. The remainder of the required heat is provided by combus tion of molecules. Reaching net zero therefore depends on the carbon intensity of these molecules. In order to achieve this, the molecules shift towards a carbon-neu tral variant towards 2045/2050.

RECYCLING OF GLASS

Just like metals, glass is an inherently permanent mate rial, maintaining its properties after recycling. This means that it can be recycled endlessly. The recycling of glass has a positive impact on the total energy need of the process, estimated to be around 13% [NREL].

A.4.5 Evolution of the electricity consumption

The electricity demand in the glass sector is set to increase, linked to the (partial) electrification of its processes. The increase is shown in Figure A.17.

FIGURE A.17 – PROJECTION OF THE ELECTRICITY DEMAND OF THE GLASS SECTOR

A.4.7 Flexibility potential

The electrification of the melting furnaces enables the provision of flexibility to the power system. This flexibility comes at a relatively high cost and can only be activated for short periods (15 minutes) to avoid impacts on the product and production facility.

A.4.8 Key takeaways

▶

Full electrification is the most promising pathway for the glass industry towards net zero, but is not neces sarily feasible in all subsectors.

▶

In the case of partial electrification, biofuels or low-carbon molecules will need to be used to reach net zero.

▶ The dispersed character of the industry might lead to limited access to H2 and CO2 infrastructure. Glass - BE Glass - 50Hertz

A.4.6 Evolution of the low-carbon molecule demand

Towards 2040 the hydrogen the demand in the glass sector starts to increase in order to eliminate the emis sions coming from natural gas. The uptake of these low-carbon molecules is shown in Figure A.18.

FIGURE A.18 – PROJECTION OF THE LOW-CARBON MOLECULES DEMAND IN THE GLASS SECTOR

A.5 NON-FERROUS METALS

Non-ferrous metals are essential building blocks to decarbonise and digitalize our society. They are used in electric vehicles, solar PVs, wind turbines, battery storage, IT devices, etc. Europe imports the vast majority of non-ferrous metal ores. The non-ferrous metals industry itself is currently the most electrified of all energy-inten sive industries, with a high reliance on electrolysis [EUM].

A.5.1 Significance and contribution to GHG emissions

Because of the high rate of electrification in most non-ferrous metals production processes, the scope 1 CO2 emissions are limited. The most important emis sions come from the roasting/melting processes of the raw input materials, linked to both the fossil fuels as well as to process emissions. Low-carbon electrons are important to reduce scope 2 emissions.

A.5.2 Current production processes

The non-ferrous metal sector includes the production and recycling of Aluminium, Copper, Zinc, Nickel, Silicon, Ferro-Silicon and Ferro-Manganese. In this study, the focus is put on the first three, Aluminium, Copper and Zinc, since these have the highest impact on the Belgian and German energy systems.

All of these processes are very similar: a first step to process and melt/roast the raw materials, followed by electrolysis (or smelting) and finally casting and finishing. The first step, including the melting and roasting, is typi cally done using fossil fuels and has the highest CO2 intensity.

A.5.3 Evolution of production volumes

Production volumes of non-ferrous metals are expected to slightly increase in Belgium and remain stable in the 50Hertz area over the coming decades.

6.5.4 Pathways to net zero

The non-ferrous metals industry will implement a combination of following options on its pathway to net zero: electrification, energy efficiency improvements, new processes in primary Aluminium production, use of low-carbon hydrogen as a smelting reducing agent, bio-based carbon as a smelting reducing agent, carbon

capture and utilisation and/or storage (CCUS), enhanced metals recovery from raw materials. A high-level over view is given in Figure A.19 and A.20. Because of the high level of electrification of the production processes themselves, the main focus of the transition pathways is on process heating, which is still fossil fuel based (Fossil fuels) at this time [BNEF-7] [BNEF-8]. The high level options to net zero for these heating processes are CCUS, electrification and low-carbon molecules.

FIGURE A.19 – EVOLUTION OF THE PROCESS HEAT TECHNOLOGIES FOR NON FERROUS METALS IN BELGIUM FIGURE A.20 – EVOLUTION OF THE PROCESS HEAT TECHNOLOGIES FOR NON FERROUS METALS IN THE 50HERTZ AREA

CCUS

Metals’ smelting processes operating in a high oxygen environment have flue gases with high CO2 concen tration (after cleaning) and are therefore suitable for applying CCUS. CCUS could also be applied to capture the CO2 emissions from embedded carbon in concen trates and secondary raw materials and from the treatment of slag and leaching residues.

However, the business case for applying carbon capture, utilisation and storage in the non-ferrous metals sector is difficult given the substantial capital cost vis-à-vis the relatively low emissions compared to other sectors. There might however be the opportunity for some producers to apply CCUS if they have a favourable location (e.g. in the vicinity of steel, cement or chemicals producer) to make use of (forthcoming) existing CO2 transport and storage infrastructure. [EUM]

ELECTRIFICATION

Additional electrification for medium and high temper ature heating are being investigated. Their technology readiness is still relatively low and thus potential applica tion can happen from 2040 onwards.

LOW-CARBON MOLECULES

A final option to remove (a part of) the emissions from the production processes is to replace the current fossil fuels with a low-carbon alternative. This would not require a change in technology.

CIRCULARITY

Metals are inherently permanent materials, which keep their properties after recycling. Strategically, metal recy cling is an essential route for Europe to support a more secure domestic supply of the non-ferrous metals (along side existing levels of primary production) required for the energy transition. While non-ferrous metals produc tion already processes a significant amount of secondary raw materials (e.g. metal scrap), a significant potential still exists to increase the recovery of metals from e.g. low-grade ores, sludges and slags from metals produc tion and post-consumer metals scrap.

A.5.5 Evolution of the electricity consumption

Because of the high level of electrification that is already present in the non-ferrous metal sector, the increase in comparison with today remains relatively limited. The evolution of the electricity consumption is shown in Figure A.21.

FIGURE A.21 – PROJECTION OF THE ELECTRICITY DEMAND OF THE NON-FERROUS SECTOR

A.5.6 Evolution of the low-carbon molecule demand

In the non-ferrous metals, there is also an uptake of carbon-neutral molecule demand beyond 2030. This is mainly used for heating purposes. The evolution of the demand is shown in Figure A.22.

Non-ferrous metals - BE Non-ferrous metals - 50 Hertz

A.5.7 Flexibility potential

Non-ferrous metal production has a significant poten tial to offer high levels of demand response to the power system with very fast reaction times. This is in particular the case for primary aluminium, zinc and copper produc tion thanks to their electrolysis step. A detailed use case for both zinc and aluminium can be found in USE CASE 1 and USE CASE 2 in the main section of the document.

A.5.8 Key messages

▶ The non-ferrous metals sector is already highly electri fied, which makes the use of green electricity one of the most important levers for carbon neutrality.

▶ Rendering the roasting/melting step climate neutral is the biggest challenge for the non-ferrous metals sector. Either electrification or low-carbon mole cules are required to replace the use of fossil fuels for heating purposes. This combined with carbon capture, utilisation and storage for the process emissions and inert anodes will enable the sector to become climate neutral.

▶ The sector can offer large amounts of flexibility to the power system given the different electrolysis processes and load shifting potential of these processes, charac terised with very fast response times.

FIGURE A.22 – PROJECTION OF THE LOW-CARBON MOLECULES DEMAND IN THE NON-FERROUS SECTOR

A.6 PULP AND PAPER

The pulp and paper industry uses wood as feedstock and produces pulp, paper, paperboard and other cellu lose-based products. The overall energy intensity of the sector is relatively high, mainly coming from the low temperature heat required during the production process. It also depends on the applied process: recy cling, kraft, chemi-thermomechanical pulping, etc.

A.6.1 Significance and contribution to GHG emissions

Even though the energy intensity of the pulp and paper sector is considerable, the use of bio-energy and heat recuperation in the production process limits the overall CO2 emissions. Bio-energy is a natural by-product of the pulp making process step. Nevertheless, the sector still relies on a significant use of fossil fuels throughout the production process, requiring further action on the pathway towards net zero.

A.6.2 Current production processes

In this study, three different production methods have been analysed for the production of pulp and paper. They comprise the kraft process, the chemi-thermo mechanical pulping (CTMP) and recycling of paper. The main difference between the different processes comes from the way pulp is produced:

1. In the kraft process, a mixture of chemicals is used in order to break the bonds that link the milled wood chips together. The process has a yield of around 50%, with the other 50% being re-used as biofuel.

2. The CTMP process relies on the combination of heat and mechanical energy to produce the pulp. The yield of this process is significantly higher than the kraft process (80%-90%), but results in a different type of pulp which makes it mainly suitable for products with a shorter life span.

3. The recycling of paper replaces the traditional pulp with pulp from recycled paper. This reduces the energy intensity of the production process.

A.6.3 Evolution of production volumes

Production of paper is expected to remain stable in the coming decades in both Belgium and the 50Hertz area.

A.6.4 Pathways to net zero

The pathway towards net zero of the paper sector is based on two pillars. On the one hand the continued use of bio-fuels in the production process and on the other hand the electrification of heat (power-to-heat). The pathways to net zero for the different options are high lighted in Figure A.23.

FIGURE A.23 – EVOLUTION OF THE PULP AND PAPER HEATING TECHNOLOGIES FOR 50HERTZ/BELGIUM

ELECTRIFICATION OF HEATING

The heat used in the production processes of paper is low temperature heat (60°C-140°C) [PAP]. This makes the process a very good candidate for electrification, with heat pumps already being competitive now. These heat pumps can be complemented with electric boilers in order to provide some specific heating demands (high temperature/fluctuating demand).

A.6.5 Evolution of the electricity consumption

Electrification will play an important role in the energy transition of the pulp and paper sector. The increase in overall electricity consumption is shown in Figure A.24.

A.6.6 Flexibility potential

Like the cement production, the paper production also has flexibility potential in the grinding process for pulp production. In addition, factories typically have some overcapacity (paper machinery), which allows for the shifting of electricity consumption.

A.6.7 Key takeaways

▶ The use of bio-energy (as a natural by-product) is an important lever to reduce the carbon intensity of the paper production process.

▶ Increased electrification of the production process of pulp and paper will remove the remaining emissions. This will enable the sector to reach net zero.

FIGURE A.24 – PROJECTION OF THE ELECTRICITY DEMAND OF THE PULP AND PAPER SECTOR

A.7 FOOD AND DRINK

The food and drink sector is a very diverse sector. Its decentralised character often limits the access to infra structure options for implementing net zero solutions. This study investigates in detail a substantial share (approx. 70%) of the overall energy consumption of the food and drink sector in Belgium and the 50Hertz area. The non-modelled part the food and drink sectors is then added via a high-level ‘top-down’ approach in order to capture as well its transition needs to net zero.

A.7.1 Significance and contribution to GHG emissions

The sector has a relatively low-carbon and energy inten sity excluding some specific products like coffee and spirits. The main emissions come from burning fossil fuels to provide the heat for the processes.

A.7.2 Current production processes

Almost all production processes in the food and drink industry rely on the usage of steam, which is currently produced using fossil fuels. The temperature of this steam strongly varies between different processes and requires different decarbonisation methods.

A.7.3 Evolution of production volumes

Production of the food and drinks sector is expected to have a steady increase (in particular in Belgium), linked to increased food export.

A.7.4 Pathways to net zero

The main focus of the transition to net zero of the food and drink sector will be the electrification of its heating needs. Biofuels can also play a role, but the potential is limited. Increased heat recovery decreases the energy need. The evolution of the production technologies is shown in Figure A.25.

ELECTRIFICATION OF HEATING

The heat used in the production processes of the food and drink sector is typically low temperature heat, with medium temperature heat for some process steps. Like in the pulp and paper sector, this makes the process a good candidate for electrification, with heat pumps already being competitive today. These heat pumps can be complemented with electric boilers in order to provide the specific heating demands for medium temperature heating.

FIGURE A.25 – EVOLUTION OF THE FOOD AND DRINK HEATING TECHNOLOGIES FOR 50HERTZ/BELGIUM

USING BIOFUELS

Biofuels based on the waste of food could also provide a part of the heating demand for the processes, replacing the fossil fuels in the current production process. However, waste food is currently (partly) used as feed for farm animals and pets.

FUEL SWITCH - HEAT PUMP

Warm water and steam are essential parts of the production processes for the food & drink sector. At this time, the water/steam is typically produced using gas boilers. However new, carbon-neutral technologies are becoming mature to replace these gas boilers under the form of heat pumps and E-boilers.

In a transition phase, when both the gas boilers and electricity-based heating systems are in place, there is a potential to switch between the energy carriers and perform day-ahead market price arbitrage. An anal ysis was performed for a specific use case of Callebaut, whom are researching the installation of a new heat pump for the production of their warm water. In their setup, waste heat would be fed into this heat pump and heated up to the desired temperature. Because of the re-use of heat and the low desired temperature, a COP of up to 8 is achievable. Thanks to this high efficiency and some prices arbitrage, a significant reduction in fuel cost would be feasible.

A.7.5 Evolution of the electricity consumption

Since electrification will play a large role in the carbon neutrality of the food and drinks sector, the electricity

consumption of the sector will increase. This is shown in Figure A.26. FIGURE A.26 – PROJECTION OF THE ELECTRICITY DEMAND OF THE FOOD AND DRINK SECTOR

A.7.6 Flexibility potential

Like in the chemical sector, parallel heating systems can provide flexibility in the transition period. By switching between heat pumps/electric boilers and gas boilers depending on the situation on the day ahead market, price arbitrage is possible.

A.7.7 Key takeaways

The most important lever for the carbon neutrality of the food and drink sector is the electrification of its heat requirements. ▶ The use of bio-energy (as a natural by-product) can support the carbon neutrality of some heating processes. ▶ The sector is strongly decentralised, which complicates the anticipation of future infrastructure needs.

A.8 DATA CENTRES

A.8.1 Introduction

Aside from the delivery of back-up power (often by diesel generators), data centres are fully electrified. The majority of the data centre players have committed (or plan to commit) to either Science-Based-Targets (SBTi) or the Climate Neutral Data Centre Pact, aiming for an overall carbon emissions reduction for data centres by 2030.

A.8.2 Evolution of the electricity consumption

The digitalisation of society has a major impact on the usage of data and hence on the electricity consumption of the whole digital infrastructure. However, little infor mation on the sector’s perspectives is publicly available and long-term forecasts are difficult to make. Uncertainty concerning the exact evolution of this sector remains high. The growth rate is therefore based on historical observed growth and includes efficiency improvements.

In Belgium, current offtake of data sector is estimated at approximately 1 TWh in 2019, which is about 1,20% of the total load. This percentage is in line with the trends on global data centre electricity use report by IEA [IEA-1]. The province Hainaut is home to several hyperscale data centres. In November 2021, Google announced to invest in its fifth data centre in St. Ghislain and the purchase of land in Ecopôle near Charleroi for a potential future data centre [GOO-2]. In October 2022, Google announced they acquired land in Ecausinnes for a potential seventh data centre [GOO-1]. Besides this, several colocation data centres are located in the vicinity of the capital. A yearly growth rate of 11% is assumed until 2040. This increase is based on historical observed growth and includes effi ciency improvements.

In Germany, the market is more fragmented and domi nated by colocation data centres, mainly concentrated

in the Frankfurt area [BNEF-4]. The current electricity offtake is estimated at 16 TWh and has increased by around 7%/year over the last 4 years [BIT-1]. Hyperscal er-cloud providers are gradually entering the market: e.g., Microsoft launched in 2019 cloud-services hosted in Germany [MS-1] and Google announced the creation of a new Berlin cloud region [GOL-1]. In the 50Hertz area, a survey conducted in the context of the NEP shows more than 2 GW of additional connection capacity needed for new data centre locations until 2030, almost entirely located in Berlin and Brandenburg. Based on the sector’s growth at German level and the connection capacity needs reported at 50Hertz level, the study assumes a 7% yearly increase for the electricity consumption of the data centres sector in the 50Hertz area.

There are some elements that could mitigate this further increase:

▶ Further efforts (such as liquid cooling) to lower power usage effectiveness (PUE), which is the ratio of the total power demand of a data centre and the power demand used for IT equipment, and heat recuperation to other sectors could reduce overall energy demand. Depending on the location, waste heat of data centres can be used in other sectors, e.g. greenhouse horticul ture [IEA-1].

▶ The movement of remote servers to clouds in data centers reduces the overall energy demand of the data sector as hyperscale clouds are more efficient.

A.8.3 Evolution of the electricity consumption

There is a sharp increase in electricity consumption in the digital sector. This is mainly driven by the increase in data centres in both Belgium and the 50Hertz area. The total increase is shown in Figure A.27.

A.8.4 Flexibility potential

The digital sector is currently running as baseload. The financial surplus to valorise flexibility of data centres is today too limited to consider. However, a more flexible operation can be an important lever to ease the integra tion of renewables in the power system and to improve carbon emission indicators. Experimentation and pilot projects are needed to better understand the full poten tial of flexibility.

Data centres’ main sources of flexibility are the uninter ruptible power supply (UPS), back-up generation and location and/or time shifting of computational tasks.

▶ More information on the flexibility from the UPS can be found in USE CASE 4 in the main section.

▶

On-site generators can be used in the medium term as they switch to batteries or hydrogen. However current installed diesel generators are too emissions-intense to run except for power interruptions.

▶

Longer duration flexibility can be considered through shifting computational tasks in time or location, aligning with renewable generation.

Different contractual changes are necessary to unlock this potential: aligning service level agreements (SLAs). Laying out performance expectations considering climate goals might accelerate the development of flex ibility in data centres. For example, charging varying energy prices throughout the day to reflect power market conditions is another mean to unlock further flexibility [BNEF-6].

A.8.5 Key takeways

▶

The largest share of the capacity growth is expected in the FLAP region (meaning Frankfurt, London, Amsterdam and Paris) which benefits of high connec tivity and concentrates international companies. A revenue growth of 10-15% is realistic. However, as new technologies and larger scale assets are being built, energy demand growth may be lower.

▶

The digital sector is very electro-intensive and runs as baseload today. The financial incentives to unlock flexibility are limited. However, carbon emission indi cators and stringent emissions reduction targets can accelerate the development of the sector’s flexibility potential.

CLUSTER DEEP DIVES

The majority of the increase in industrial power demand will occur in industrial clusters. A more detailed focus on the projected evolutions in those clusters is there fore essential to better understand industries’ journey towards net zero. These clusters will gain importance because of the availability of necessary infrastructure (such as electricity grid, CO2 pipelines, hydrogen pipe lines, heat networks etc.) providing industry all options to develop the most interesting techno-economic pathway to reach net zero. Circularity in which waste streams are re-used within the cluster adds to their attractiveness. Gathering an early view on the future needs of industrial clusters is of utmost importance for Elia and 50Hertz to anticipate required grid reinforcements.

In Belgium, multiple industrial clusters exist. The main ones are located in the port of Antwerp and Ghent, along the Albert Canal and in the provinces Hainaut and Liège:

▶ The Antwerp cluster (port of Antwerp) consists mainly of refineries, (petro)chemical and logistics companies. The refining and (petro)chemical sector are directly connected to the Elia grid. Only the largest terminal operators in the logistics sector have a direct connec tion to the Elia grid. Other logistics companies are connected to the distribution grid.

▶ In the province Hainaut, different industrial sectors like data centers, cement, glass, steel and chemistry are represented, making it an interesting cluster for a deep dive of future industrial needs.

▶ The Albert Canal is an important shipping route from the port of Antwerp to the hinterland, along which many industrial sectors, like ferrous and non-ferrous metals, (petro)chemical companies, non-metallic minerals, textile industry and others are located.

▶

The Ghent cluster is located along the Canal Ghent –Terneuzen with the presence of primary steelmaking,

paper industry, manufacturing companies and logis tics sector.

▶ Along the Meuse in the province Liège, there are not only several large production units to be found, but also companies from the steel, chemical and cement sectors are present.

Other coa stal locations, such as the Port of Bruges, might face some future growth as it is located at the crossroads of energy infrastructures: it acts as the connection point for offshore wind energy from the North Sea, gas pipelines and a planned hydrogen grid.

This study focuses on the clusters in the port of Antwerp and the Hainaut region. The detailed cluster analysis is a continuous work and will be expanded to other Belgian industrial clusters after this study. Due to the investment decision of ArcelorMittal Belgium last year, a first highlevel cluster analysis was already performed for the port of Ghent [ARC-1]. This will be updated next year with the input of the detailed sector analysis for other sectors.

The timely realisation of the Ventilus and Boucle du Hainaut projects is a precondition for enabling large-scale industrial electrification in Belgium. It is a precondition for all industrial clusters and in particular for the Hainaut region.

2 Antwerp

Canal

Primary steel making, paper industry, manufac turing companies and logistics sector

Largest integrated chemical cluster in Europe and logistics sector

Ferrous and non-ferrous metals, (petro)chemical companies, non-metallic minerals, textile industry and others

5 Liège 4 Hainaut

Data centres, cement, glass, steel and chemical sector

Steel, chemical and cement sectors

In the 50Hertz area, the study focuses on clusters with different profiles, both in terms of sectors represented and access to energy infrastructure, to provide a good overview of the large spectrum of load and grid situa tions in the area:

▶ Berlin is the main electrical load center in the 50Hertz area. It combines a significant development of data centres and manufacturing industries with a growing residential and SME demand driven by population growth and e-mobility.

▶ The chemical park Leuna is located in the so-called middle-German chemical triangle, near the city of Leipzig, and concentrates petrochemical activities, making use of synergies within the park and with neighboring chemical settlements in Böhlen (naphtha cracking), Schkopau (polymers) and Piesteritz (ammonia).

▶ Hamburg represents the second German metropol itan area and hosts the third largest container port in Europe. Its industrial energy demand is driven mainly by the production of steel and non-ferrous metals, refinery, food and drink, machine building and manufacturing. It is located near renewable energy production centers: offshore wind in the North Sea and onshore wind in Schleswig-Holstein.

▶ While not being an industrial centre as such, Lubmin is located at the crossroads of energy infrastructures: connection point for offshore wind energy from the Baltic Sea, gas pipelines and planned H2 grid. It consti tutes a good candidate for domestic green molecules production, serving the growing industry needs.

The performed cluster analyses show that a large share of the increase in industrial power consumption will be concentrated in industrial clusters. To anticipate the needs for leading infrastructure in a holistic way, a close cooperation with all stakeholders is required as explained in Lever 3 in the main body of this study.

1 Hamburg 2 Lubmin

Steel, non-ferrous metals, refinery, food and drinks, machine/ transport equipment manufacturing, logistics

2 1

Large potential for electrolysers for green hydrogen production

3

3 Berlin 4 Leuna 4

(Petro)chemical companies

Numerous new settlements: manu facturing, logistics and data centres

B.1 BELGIUM: ZOOM IN ON INDUSTRIAL CLUSTERS IN PORT OF ANTWERP AND THE PROVINCE HAINAUT

B.1.1 Port of Antwerp industrial cluster

CLUSTERS ANALYSIS CONFIRMS AND REINFORCES THE AGGREGATED ANALYSIS

The Port of Antwerp is located right in the center of Europe, with good connections via rail, road and inland waterways throughout Europe. The port is home to the largest integrated chemical cluster in Europe. The refineries of TotalEnergies and ExxonMobil, and the three steam crackers in the port ensure the stable local

availability of raw materials. In addition, several lubri cant production sites are based in the port area. Various global players in the chemical production sector are based in Antwerp, either logistically or with a production unit [POA-1].

→ Over & beyond, we continue to cocreate and deploy innovative solutions that improve efficiency and resiliency, which support decarbonisation across supply chains. To this end, we are working towards a PSA Green Corridor, where carbon-neutral maritime routes connecting through PSA terminals globally are supported by a suite of value-added green services, generating carbon abatement values across the entire ecosystem.

PSA, TERMINAL OPERATOR (BE)

For 2030, we expect an increase in electricity consumption of 65% (Figure B.1). This increase includes the following assumptions:

▶ No (significant) change in production volumes of current processes;

▶ The planned investments of Ineos Olefins [INE-1] and Borealis [BOR-1];

▶ The development of common CO2 infrastructure within the Antwerp@C project.

With the announced pilot project of PlugPower for local green hydrogen production, the expected consump tion increases further with 72% [PLU-1]. From this latter increase, confirmed projects and study requests account for 70%, where potential projects mentioned

during client discussions account for the remaining 30%. In terms of capacity expansion, it is expected that the requested capacity will increase by approximately 1-1.25 GW towards 2030. In the 2050 projection, with the assumption that for the present industrial companies there is no further change in production volumes (except refineries), the electricity consumption will increase with a factor 2-2.3 compared to today’s values under the FOS+CCUS and the MOL scenario and by a factor 3.4 in the ELEC scenario. The higher increase in elec tricity consumption (for the ELEC scenario) compared to the aggregated model (see Key Finding 1) has different drivers. Firstly, the overall increase in industrial electricity consumption will mainly be concentrated in indus trial clusters, especially under the ELEC scenario with the electrification of cracking processes and chemical

recycling of plastics. Secondly, the increased electricity demand in the logistics sector is included in the cluster analysis to assess local impact, however it is excluded in the aggregated model.

The hydrogen demand in the industrial cluster remains almost constant towards 2030. Green molecules (H2, NH3,…) will gradually scale after 2030. In 2040 and 2050, our cluster analysis shows a hydrogen demand (excluding hydrogen need to produce synthetic fuels in maritime and aviation) of approximately 4.5 TWh and 12 TWh respectively.

The performed Antwerp cluster analysis estimates a total amount of approx. 3-4 million tons (Mt) CO2 abatement via CCUS in 2030. For 2040 and 2050, the total captured volumes of CO2 increases further to a range of 4 to 6.5 Mt and 4-7 Mt respectively.

COMBINATION OF DIFFERENT TECHNOLOGIES IS NECESSARY TO ACHIEVE NET ZERO

The decarbonisation projects behind this increase in power consumption are diverse: it consists of CCUS projects, power to heat projects (mainly e-boilers and to a smaller extent heat pumps), electrification of rotating equipment and drives, chemical recycling, electrification of transport in the logistics sector (e.g. shore power, truck charging, inland shipping, electric cranes and straddle carriers).

REFINING SECTOR

Looking further into the future, a demand reduction of all refinery products is assumed in Antwerp. The Antwerp refineries are well located and a remaining capacity of 57% is assumed by 2050 [CON-1]. Due to inevitable process emissions during the refining process, carbon capture techniques will be installed. Some electrification projects are expected for cooling processes, whilst for most heating processes CCUS or low-carbon hydrogen are considered.

A bigger impact could come from a new refinery model integrating an on-site electrolyser to produce green hydrogen. Combined with local captured CO2, it is the feed stock for e-fuels used in aviation and maritime transport.

(PETRO)CHEMICAL SECTOR

For the (petro)chemical sector, the challenges are twofold: firstly, a shift towards low-carbon feedstock and secondly, finding technologies to make production processes carbon neutral.

The coming decade, the electrification of processes will mainly focus on direct electrification of rotating equip ment and drives, and heat and steam production by installing e-boilers and heat pumps. The main advantage of e-boilers is their fast ramping rates and the absence of standby losses. This makes e-boilers perfectly suited to cover volatile steam peaks, especially during hours with high renewable infeed in the system resulting in low electricity prices.

Industrial heat pumps lead to strong efficiency gains, given their high Coefficient of Performance (COP) and are considered as a heating solution in the (petro)chem ical [BAS-1]. They currently compete with CHP plants at industrial sites. Today, approximately 1 GW of combined heat and power units (CHPs) are installed in the Antwerp cluster: a higher penetration of renewables in the elec tricity system will gradually decrease their running hours leading to an increase in the observed ‘net’ offtake from the grid. Onsite renewables have an opposite effect.

Carbon capture techniques are investigated broadly throughout the refining and (petro)chemical sector. They play an important role in processes with non-neg ligible process emissions and in the production of high-value chemicals (HVC). Based on the technology for HVC, different decarbonisation options are considered:

▶

Propane dehydrogenation, as installed by Borealis [BOR-1], does emit less CO2 than conventional naphtha cracking; fitting CCUS to the flue gas streams is a solu tion to become net zero [BNEF-3].

▶ The new ethane cracker from Ineos Olefins [INE-1] emits less CO2 than conventional crackers. Neverthe less, additional technologies like CCUS, low-carbon hydrogen or electrification are needed to make the process climate neutral [INE-2].

▶

Electric steam cracking offers a promising route for naphtha cracking, but technology readiness of this technology is still at pilot stage [BAS-2]. Even for elec tric steam crackers, a solution must be found for the flue gases containing carbon emissions.

Important changes in feedstock are expected by 2050. The conversion of plastic waste into naphtha and e-methanol offers a promising route to diversify and reduce the carbon intensity of the feedstock for (petro) chemicals. For chemical recycling, it is likely that this electricity intensive conversion will be conducted in the cluster.

LOGISTICS SECTOR

The logistics sector is not included in the aggregated model explained in Key Finding 1, but it is included in the cluster analysis to assess the local impact. Challenges for the electrification of the logistics sector will be, with regard to the grid, very different from the refining and (petro)chemical sector: many concessions are occu pied by the logistics sector and they are well-dispersed in the Antwerp cluster. Although the exact electrifi cation potential is still uncertain, recent studies point towards a strong electrification potential [TRA-1], espe cially for shore power, trucks and potentially inland shipping. As mentioned earlier, most terminal logistics operators are connected to the distribution grid. Rein forcement of their grid connection will be indispensable to enable large electrification projects. A coordinated grid planning in the cluster will be key to enable all elec trification projects as soon as the technology is mature and economically viable. In case the capacity of the local grid is exceeded, an evolution of the grid connection to higher voltage levels is required. A proactive approach supported by an overall techno-economic analysis (for both society and individual grid users) is needed for this.

LOCAL ELECTROLYSERS FOR GREEN HYDROGEN PRODUCTION

The impact of potential on-site electrolysers, i.e. approx imately 5 TWh of power consumption by 2030, is shown indicatively on Figure B.1 (red dotted line, excluded from multiplication factor). This will produce approximately 3.5 TWh of hydrogen considering an efficiency of 70% for the electrolysis process [EU-1]. Given the high uncer tainty on future evolutions of domestic electrolysers in industrial clusters, additional capacities are not consid ered in this cluster analysis and need to be added to the results once they become more concrete [FGOV-1].

Belgium (and Europe as a whole) is short on renewable potential. It will not be able to produce its combined elec tricity need for direct electrification and green molecules on the basis of domestic RES potential [ELI-1][FGO-1]. In addition to the timely development of all needed infra structure, import capabilities for low carbon molecules are therefore a no regret. Today, the requested capacity of explored electrolysers in Belgium adds up to approxi mately 1.8 GW (study phase).

A leading grid development approach is needed to timely provide the capability of electrifying industrial processes. This detailed cluster analysis confirms the need for the projects identified in the Federal Develop ment Plan in Belgium [ELI-3]. Some of the investments regarding the reinforcement of the internal backbone in the Antwerp region, which are currently listed as ‘condi tional’ (in particular initiatives 39, 40, 41 in Figure B.2 [ELI-3]), will become essential to enable the projected pace of industrial electrification (see BOX 2 in the main section).

FIGURE B.2 - FUTURE GRID DEVELOPMENT 380KV IN THE PORT OF ANTWERP [ELI-3]

Internal backbone reinforcement Antwerp region

Brabo III – Upgrade existing 150 kV connection to a new 380 kV connection 38 Yes Planned 2025 In progress

Reinforcement of transport capacity of the 380 kV line between Doel and Zandvliet 39 No Conditional 2030 In study

Reinforcement of transport capacity of the first 380 kV corridor between Doel and Mercator 40 No Conditional 2035 In study

Reinforcement of the transport capacity of the second 380 kV corridor between Doel and Mercator 41 No Conditional 2038 In study

Upgrade of the 380 kV Doel substation to a short circuit power of 63 kA 42 No For approval 2025 In progress

Upgrade of the 3880 kV Zandvliet substation to a short circuit power of 63 kA 43 No For approval 2025 In progress

Relocation of part of 2 380 kV corridors between Mercator and Doel for the construction of the Second Tidal Dock 44 Yes Conditional 2027-2030 In study

Getijdendok

PROJECT DESCRIPTION ID FDP MENTIONED IN FDP 2020? TYPE OF APPROVAL PLANNED REALISATION PROJECT STATUS

B.1.2 Hainaut

The Hainaut province is characterised by heavy industry (steel, cement, chemicals, glass) due to the historical dependence on coal mines and the presence of lime stone quarries. Since 2010, the digital sector is active in the region with the presence of hyperscale datacenters.

With the assumption that for the present industrial companies there is no change in production volumes (except for data centers), we expect that the electricity consumption more than doubles (x2.2) by 2030 (Figure

B.3). Thereof, 95% of this increase consists of confirmed projects and study requests where the other 5% consists of potential projects mentioned during client discus sions. In terms of capacity expansion, it is expected that the requested capacity will increase by approx. 1 GW towards 2030.

The current hydrogen demand in the cluster is approximately 1.5-2 TWh. In 2030, the cluster has a projected increase of approximately 200 GWh, mainly coming

from secondary steel. In 2040 and 2050, our analysis shows a hydrogen demand within a range of 1.8-2.5 TWh and 2-3 TWh respectively.

The cluster analysis estimates approximately 1.5-2 Mt CO2 abatement via CCUS in 2030. For 2040 and 2050, the total captured volumes of CO2 increase further to a range of 2-2.5 Mt and 3-3.5 Mt respectively.

The results of the cluster analysis show a faster increase (x2.2) compared to the aggregated results (x0.5). Data centres are the main driver for this faster uptake. Different hyperscale data centers are located in the cluster and are responsible for the fast rise. Informa tion on future growth of data center consumption in Belgium is limited. Hence, the projected growth in this sector needs to be followed carefully. A yearly growth rate of 11% is assumed until 2040. This increase is based on historically observed growth and includes efficiency improvements. There are some elements that could mitigate this further increase:

▶ Additional efforts to lower power usage effectiveness (PUE), which is the ratio of the total power demand of a data centre and the power demand used for IT equipment, and heat recuperation to other sectors could reduce overall energy demand. Depending on the location, waste heat of data centers can be used in other sectors, e.g. greenhouse horticulture.

▶ The movement of remote servers to clouds in data centres reduces the overall energy demand of the data sector as hyperscale clouds are more efficient. .

The decarbonisation efforts of other sectors (secondary steel, glass, cement and chemistry) adds up to the rising electricity needs of the clusters. The low-carbon industry framework of the Walloon Recovery Plan allows, with the support of research institutions, for a strong crosssector cooperation between different companies in their pathway towards a low-carbon and circular industry [ULI-1].

FIGURE B.3 - EVOLUTION OF ELECTRICITY CONSUMPTION IN THE HAINAUT INDUSTRIAL CLUSTER.

Secondary steelmaking is strongly represented in the region with the presence of several electric arc furnaces. There remains a high potential to further electrify other production steps of the secondary steelmaking process – especially the rolling and casting step. Some first pilot projects are being implemented to research the possi bilities to replace the gas-fired ovens by a zero carbon substitute.

Due to the calcination process for cement making, process emissions are inevitable and responsible for 35-40% of the total emissions [CEM-1]. Carbon capture techniques are required to reach climate neutrality and means the electricity consumption will more than double if CO2 capture is employed. Towards 2040 and 2050 different options are still open: the heating step can be electrified in case technology becomes mature, or can continue to rely on fossil fuels, of which the emis sions are captured.

Different manufacturing companies of glass (flat and container glass) are located in the Hainaut region. For glass manufacturing, electrification is the main lever for decarbonisation. Hybrid furnaces will be installed with an increasing shares of electrification in the coming decades. The maximal contribution of electrification in hybrid furnaces is still under research and differs for the different glass types. Hydrogen or biogas are the main carbon neutral options to fuel the remaining part of the process that cannot be electrified.

Several chemical companies indicate electrification projects (e.g. direct electrification in rotating equipment and heat and steam production by installing e-boilers and heat pumps) reducing the use of fossil fuels in their production processes.

Due to the presence of carbon capture projects, pilot methanation or e-fuels projects (combining captured CO2 with green hydrogen) are under consideration in the region (e.g. Columbus project [ENG-1] or study solutions of TotalEnergies and Holcim [HOL-1]). These projects require a significant amount of electricity to generate

green hydrogen (if not imported). Like the Antwerp cluster, the impact of on-site electrolysers is shown indic atively on Figure B.3.

The new Boucle du Hainaut axis strengthens the supply to the adjacent 150kV grid in Wallonia, and more specif ically in Hainaut (Figure B.4). It is the vital link to create the necessary hosting capacity for new and reinforced connections. Therefore, it ensures the economic attrac tiveness of the province and the region.

FIGURE B.4 - OVERVIEW OF THE DEVELOPMENTS IN THE BELGIAN

In addition, connection capacities should be connected to the right voltage level to make optimal use of the existing infrastructure, with an emphasis on the use of the 150kV grid and the phasing out of the 70kV voltage level in the area.

B.2 50HERTZ REGION: ZOOM IN ON CLUSTERS OF

LEUNA, HAMBURG, BERLIN AND LUBMIN

MATERIAL REGIONAL NETWORK [INF-1]

B.2.1 Leuna

The Leuna chemical complex, located in Saxony-Anhalt, is part of the middle-German chemical triangle. With 2 TWh of electricity, 5 TWh of natural gas and up to 12 million tons of crude oil consumed every year [BRA-1], it is one of the largest (petro)chemical clusters in Germany. It hosts a refinery operated by TotalEnergies (which is also one of the largest methanol production sites in Europe), base chemicals production companies (Arkema, Domo, Dow, LCP, Xentrys…) and a large spectrum of specialty chemicals. The cluster is also well connected to the regional raw material network, as shown on Figure B.5.

The required grid connection capacity in Leuna is expected to grow by more than 1 GW in the upcoming ten years. This growth is mainly driven by:

▶ Green hydrogen production. Several large scale elec trolyser projects are planned / in realization within the cluster to cover the local feedstock needs with green hydrogen, among which:

• the GreenHydroChem pilot project, led by Linde, Siemens and the Fraunhofer Institute, aims at building a 100 MW electrolyser by 2024 and demonstrate the entire value chain of green hydrogen (production, transport, storage and usage) [FRA-1].

• TotalEnergies is planning industrial scale e-fuel production as part of the LeunaPower2Fuels project. In the next ten years, up to 120 kt/year of sustainable electricity-based liquid fuels could be produced via methanol synthesis [SUE-1].

▶ New settlements. The Finnish company UPM is investing in a large bio-refinery project producing bio-chemicals from sustainably sourced hardwood [UPM-1].

▶ Replacement of on-site fossil-fueled power production. A power plant burning refinery residues will be replaced by a 90 MW additional grid withdrawal.

Although a local solar energy production of 45 MW [CHE-1] is planned, the grid connection capacity needs to increase. To provide the required amounts of renewable electricity, the current 110 kV connection of the chem ical complex has to be upgraded to extra-high voltage. The strengthening of the existing grid infrastructure is already taken into account in the NEP 2021 (project P528) [NEP-1] and includes two steps: the construction of a new 220 kV substation and the upgrade to 380 kV (substation and overhead line). Due to lengthy permit ting processes, the realisation can take up to 6 years. Therefore, it is key to start the construction as early as possible to avoid bottlenecks for the industrial transition projects in the area.

B.2.2 Hamburg

Hamburg is the second biggest city of Germany and hosts the third largest container port in Europe. It is also a significant industry location with production of steel and non-ferrous metals, refinery, food and drink companies and machine/transport equipment manufacturing. As shown on Figure B.6, its industrial electricity consump tion is expected to increase by more than 30% until 2030 and 60% by 2045 (excluding electrolyser projects).

FIGURE B.6 – INDUSTRIAL ELECTRICITY CONSUMPTION IN HAMBURG. → The electricity demand of the chemical park in Leuna is expected to grow by 1 GW in the next 10 years, mainly driven by electrolyser projects. The sustainability of the chemical park will strongly depend on the grid connection and the availability of green electricity. This is why we need a 380 kV line as soon as possible.

Steelmaking constitutes the largest energy consumer in the cluster. ArcelorMittal operates in Hamburg a natural gas-based direct reduction plant supplying 45% of the iron charge to an electric arc furnace [ARC-2]. The steel is then processed in two ladle furnaces and a continuous casting plant, both mainly gas-fired. One key aspect of ArcelorMittal decarbonisation plan in Hamburg consists in experimenting industrial scale H2-based direct reduc tion and then adapting the existing reduction installation

Hydrogen (electrolysis) Others Logistics Food and drink Manufacturing Refinery HVC Non-ferrous metals Steel

AT TOTALENERGIES RAFFINERIE MITTELDEUTSCHLAND GMBH (DE)

PROJECTS

MARC PECQUET, BUSINESS DEVELOPER SUSTAINABILITY

to hydrogen by 2030 [ARC-1]. This change has a low direct impact on power consumption but creates a demand for (green) hydrogen of approx. 1.7 TWh, which may be covered by local electrolyser projects (like the Hamburg Green Hydrogen Hub [HGH-1]) or imports via the harbor.

Representing the second largest energy consumption in the area (and first electricity consumption), the production of non-ferrous metals is divided into primary aluminum (Trimet) and copper (Aurubis) production:

▶

The Trimet plant in Hamburg performs the electrolysis of alumina and produces the carbon anodes needed for the process. The main decarbonisation options envisaged by Trimet are a switch from natural gas to hydrogen to cover process heat needs by 2040 and the replacement of carbon anodes by inert ones by 2045, thereby avoiding process emissions stemming from existing anodes. This technology is not mature yet and uncertainty persists around the feasibility.

▶ Aurubis Hamburg experiments with the use of ammonia in replacement of natural gas for copper rod production [AUR-1]. The import of green mole cules is facilitated by the proximity to the harbor. This decarbonisation option has a negligible impact on the power demand.

The two refineries (Nynas and Holborn) see their power consumption double by 2045 due to the implementation of CCUS (mainly developed between 2040 and 2045). It is assumed that the processed oil volumes (currently 7 Mt/ year) will be reduced by 30% towards 2045 [CON-1].

Within the Port of Hamburg, the logistics sector plays an important role. Although the logistics sector analysis conducted in this study is not exhaustive, 50Hertz esti mates a consumption increase 0.4 TWh until 2030 due to the development of shore-power by the Hamburg Port Authority and the electrification of road freights (see the road freight electrification use case in BOX B.1). It should be noted that these energy volumes are not reflected in the 50Hertz area aggregated results (as they do not include the logistics sector).

Due to the former power plant connections in Brunsbüttel and Moorburg, the transmission grid around Hamburg is strong. Existing phase shift transformers allow 50Hertz to control the power flows. As shown on Figure B.7, Hamburg is also close to the connection point of offshore wind energy from the North Sea, with currently 2.1 GW offshore wind in operation.

Due to the proximity of RES generation and the robust inland EHV grid, the industrial load increase in the Hamburg cluster is not expected to require long-distance horizontal grid reinforcements but it will cause vertical grid development needs between the distribution grid, where most of the industrial load is currently connected, and the transmission grid. Existing substations will have to be extended with additional transformation capaci ties. Early exchanges with the industry on electrification plans are necessary to initiate the network reinforce ments in time.

to Lubmin

Offshore power grid Gas pipelines

Existing wind farms with grid connection

Future wind farms with planned grid connection Existing interconnector

Existing natural gas pipeline

Onshore power grid

Existing 380 kV Planned DC Data: Openinfrastructure map, Openstreetmap Contributors 2022

FIGURE B.7 – ENERGY INFRASTRUCTURE AROUND HAMBURG [OPE-1, NET-1]

to DE EEZ

Emden Ost

Brunsbüttel/Büttel

Wilster

Hamburg

Heide West

to DE EEZ to Norway

ELECTRIFYING ROAD FREIGHT TRANSPORT IN THE PORT OF HAMBURG: A NEW FLEXIBILITY POTENTIAL

To reach a net zero economy, not only must the production of goods be decarbonised, but also the transport of raw materials and finished products. In Germany, nearly three quarters of the freight volumes are transported by road using almost exclusively diesel-fueled heavy duty vehicles (HDVs) [UBA-1]. These are responsible for approxi mately 56 MtCO2 emissions annually [UBA-2].

LONG-HAUL BEV HEAVY DUTY TRUCKS CAN HAVE A STRONG BUSINESS CASE AND YIELD SIGNIFICANT REDUCTIONS IN CO2 EMISSIONS

The primary options to decarbonise road freight transport include hydrogen fuel-cell vehicles (FCEVs) and battery electric vehicles (BEVs). Both of them are still in an early stage of development and could have different application spaces, with BEVs being closer to mainstream adoption. The biggest advantage of BEV lies in its potential to drastically lower energy cost due to the high efficiency of direct usage of electricity. Since long haul heavy duty applications are strongly dominated by operational expenses, especially fuel costs, these make for an interesting business case for BEV. Further more, BEVs have a large GHG emission reduction potential, as already the first 10,000 long-haul BE HDVs can save up to 1 MtCO2 per year.

Rapid deployment of large scale, standardised charging infrastructure along main corridors, industrial clusters and logistics hubs is a prerequisite for the development of BEVs in long haulage. The scaling of the BEV market will raise the elec tricity demand while smart charging can provide the flexibility necessary to match this demand with renewable energy production, reduce the energy costs and minimize the impact on the grid.

A COMMON STUDY ON THE IMPACT OF ROAD TRANSPORT ELECTRIFICATION IN CENTRAL EUROPE

Elia Group and the truck manufacturer Traton Group are commonly analysing consumption patterns, infrastructure and grid reinforcement needs related to the electrification of the heavy mid- and long-haul transportation sector in Germany and Benelux.

FOCUS ON THE PORT OF HAMBURG

To illustrate the impact of road freight electrification, Elia Group, together with Traton Group and the Hamburg Port Authority (HPA), have investi gated future HDV charging patterns in the Port of Hamburg and the related flexibility potential.

PRODUCTION

With a seaborne cargo throughput of 129 million tons per year, from which 92 million tons are trans ported beyond the confines of the harbor itself [HPA-1], Hamburg is the third-largest container port in Europe. Truck transports representing 40% of the hinterland traffic, approx. 17,100 HDVs enter the port area every work day [HPA-2].

Time schedules for loading containers and bulk cargo on trucks are designed to minimise the time spent by HDVs in the port area. Nevertheless, the port includes official parking lots used for the compulsory 9-hour overnight rests and side parking spaces for the 45-minute mid-day breaks. Both of these parking slot types can be equipped with slow and fast charging stations respectively.

From a grid perspective, these time schedules are of great interest, as it matters how fast and when HDVs are being charged. Considering both indic ative traffic data (based on qualitative input from local freight companies) and the available charging spots, the power profile resulting from “organic” charging (Figure B.8) shows little demand during the night and weekend, and a peak (approx. 47 MW in 2045) at around 12:00-13:00 on weekdays for a yearly consumption of 176 GWh. This peak coin cides with the mid-day peak of solar generation. Therefore, combining the charging infrastructure with local or regional PV production could reduce strain on the grid.

IT MATTERS WHEN TRUCKS ARE CHARGING: NATURAL CHARGING PATTERNS IN LARGE LOGISTIC HUBS GENERATE SIGNIFICANT MID-DAY PEAK LOADS, INCREASINGLY WELLALIGNED WITH SPIKES IN SOLAR ENERGY

FLEXIBILITY OF OVERNIGHT CHARGING: A POTENTIAL FOR REDUCING ENERGY PROCUREMENT COSTS AND FACILITATE RES INTEGRATION

The midday charging patterns offer low flexi bility potential: as breaks are generally short and their duration is close to the time needed for fast charging, there is little room to shift the load. This is different for the overnight stops where e.g. 2 to 3 hours of charging can be sufficient in many cases and be moved around freely within the 9-hour rest period.

If used to optimise the consumption profile against day-ahead market prices (2021 prices taken as an example), smart overnight charging reduces the charging costs by 21%.

As shown in Figure B.9, the optimization against market prices generates peaks at night, in the hours where the electricity prices are the lowest, i.e., the residual RES infeed (wind) is the highest. However, these peaks remain generally lower than the midday peak and might not drive additional grid investment needs.

→ TRATON’s purpose is to drive the shift to a sustainable transport system heading for 100% electric transport. Together with HPA and Elia Group, we are happy to show that BEV trucks are part of a realistic, decarbonised future. It is now key to build an advanced, comprehensive and high-performance charging infrastructure across Europe.

CHRISTIAN LEVIN, CEO OF TRATON SE

→ The Hamburg Port Authority (HPA) aspires to make Hamburg a zeroemission port. As part of its efforts it will earmark charging infrastructure sites to house future vehicle propulsion technologies as provided for in the European Green Deal and national requirements.

AND SCANIA

DAVID SCHNABEL, PROJECT MANAGER LANDSIDE PUBLIC INFRASTRUCTURE AT HAMBURG PORT AUTHORITY (DE)

FIGURE B.9 – WEEKLY POWER CONSUMPTION PROFILE RESULTING FROM “SMART” BEV HDVS OVERNIGHT CHARGING IN PORT OF HAMBURG (2045,

B.2.3 Berlin

Berlin, together with its surroundings, is the main load center in eastern Germany. In recent years, the region attracted numerous new businesses seeking grid connection in the high voltage (110 kV and below) and extra high voltage levels (220 kV and 380 kV). Next to the high share of green electricity supply, a large employee market, good IT infrastructure and accessibility are factors attracting new companies. Grid connection requests concern mostly data centres as well as large stationary battery storages. Most requests are around 100 MW and therefore connected to the distribution grid (110 kV and below). But connection requests of 500 to 1 000 MW, requiring direct connection to the transmission grid, become more common.

Towards 2030, the picture looks as follows (based on current insights): in the regions located south and east of Berlin, a load increase of 1.5 - 2 GW is expected, on top of a load increase of approx. 1.2 GW in Berlin itself. This increase is mainly driven by new industry such as manu facturing, logistics and data centres, as wells as large scale electrical heating.

50Hertz meets this trend with numerous infrastructure projects in the metropolitan area to serve new customers and unlock their flexibility potentials. This concerns upgrades of 220 kV overhead lines to 380 kV to increase transmission capacities both in north and south of Berlin (c.f. NEP projects “Nordring Berlin” and “Thyrow-Berlin Südost” [NEP-2]) as well as new transmission corridors such as the cable tunnel (Kabeldiagonale Berlin) in the western part of the city. DSO reinforcement measures are also reflecting this load increase. Both trends are shown in Figure B.10.

FIGURE B.10 – OVERVIEW OF LARGE SCALE GRID CONNECTION REQUESTS IN THE BERLIN METROPOLITAN AREA [OPE-1]

B.2.4 Lubmin

Lubmin is located at the crossroads of energy infrastruc tures: it acts as a connection point for offshore wind energy from the Baltic Sea, has a strong inland power grid, gas pipelines and a planned H2 grid. This is shown on Figure B.11. While not being an industrial cluster as such, it is a good candidate for domestic green mole cules production, serving the growing industry needs in the 50Hertz area.

As Lubmin hosted a nuclear power plant, it benefits from a well-developed 380kV transmission grid which also facilitates integration of large amounts of offshore wind energy (additional 1.5 GW planned by 2025 and additional 1.3 GW by 2030 [NET-1]). The Bornholm Energy Island is planned to be connected in Lubmin with a capacity of 2 GW [NEP-3].

Due to the grid capacity, available space and access to wind energy, Lubmin is a prime location for large scale electrolyser projects. One of these projects is led by HH2E and aims at an installed electrolysis capacity of 50 MW by 2025, complemented by a 50 MW battery storage, and a planned extension up to 1 GW by 2030 [HH2E]. The coupling of electrolysers with battery storage allows a higher load factor while reducing the electricity procure ment costs. The produced hydrogen can be injected in dedicated (repurposed) infrastructure. In the long run, the majority of the produced hydrogen is to be trans ported via the future European hydrogen backbone.

FIGURE B.11 – ENERGY INFRASTRUCTURE AROUND LUBMIN [OPE-1]

Offshore power grid

Existing wind farms with grid connection

Future wind farms with planned grid connection

Gas pipelines

Onshore power grid

Existing natural gas 380 kV

Proposed retrofit for hydrogen 220 kV

Data: Openinfrastructure map, Openstreetmap Contributors 2022

→ At the Lubmin site, a land-based efficient gas infrastructure meets a high availability of offshore wind power. At the site of the former nuclear power plant, suitable areas and service water are available: there is no better location for a large electrolysis plant that generates hydrogen from electricity and water for feeding into the gas grid.

HANNO BALZER, HEAD OF ENERGY MANAGEMENT AT HHE (DE)

Lubmin

Bornholm Energy Island

With these assumptions, the power consumption in Lubmin could surpass 7 TWh by 2030 (see Figure B.12).

First grid simulations, based on a limited amount of situ ations of the NEP 2021 Scenario B2035, show a positive grid impact of installing 1 GW electrolyser capacity in the Lubmin region. As shown on Figure B.13, adding an elec trolyser load of 1 GW in the Lubmin area would reduce the average grid loading in the 50Hertz grid by approx. 4% during high (offshore) wind conditions. Further inves tigations would be necessary to evaluate the impact on grid congestions for a wider spectrum of scenarios.

→ Using wind power on the coast when it is available on a large scale reduces the electricity procurement costs of the electrolyser, as the installers of the offshore wind farms can transport the electricity to the wholesale market at low prices in these times or cannot produce it at all in the event of grid bottlenecks. In order to enable this electricity driven operation and to be able to operate the electrolysis with a high amount of full load hours, storage is required on site.

BALZER, HEAD OF ENERGY MANAGEMENT AT HH2E (DE)

FIGURE B.12 - EXPECTED CONSUMPTION INCREASE BY 2030 IN LUBMIN (*NEP 2021 B2035)

FIGURE B.13 - AVERAGE 50HERTZ GRID LOADING IN % FOR REPRESENTATIVE HIGH WIND AND LOW WIND SITUATIONS

HANNO

Lubmin NEP2021 Lubmin Viewpoint 1GW  NEP2021 Lubmin Viewpoint 1GW  High Wind Low Wind

REFERENCES

[AGO-1] Agora: A-EW_269_Power-2-Heat_WEB.pdf (agora-[energiewende.de])

[ACE-1] https://acer.europa.eu/Official_documents/Acts_of_the_Agency/Publication/ ACER%27s%2520Final%2520Assessment%2520of%2520the%2520EU%2520Wholesale%2520Electricity%2520Market%2520Design.pdf

[ACM-1] Torero - fueling a subtainable future [ACM-2] Home | Steelanol

[ARC-1] ArcelorMittal ondertekent intentieverklaring met de Belgische en Vlaamse regering ter ondersteuning van een investering van 1,1 miljard euro in decarbonisatietechnologieën in de toonaangevende vestiging in Gent. - ArcelorMittal in België

[BAM-1] https://matplotlib.org/basemap

[BAS-1] BASF and MAN Energy Solutions enter into partnership for construction of one of the world’s largest heat pumps in Ludwigshafen

[BIT-1] Rechenzentren in Deutschland 2021 (bitkom.org)

[BMU-1] https://www.bmuv.de/fileadmin/Daten_BMU/Download_PDF/Gesetze/ksg_final_en_bf.pdf

[BNEF-1] https://www.bnef.com/insights/28813/view

[BNEF-2] https://www.bnef.com/insights/29271/view

[BNEF-3] BNEF, Decarbonizing Petrochemicals, Technologies and Costs, 2022

[BNEF-4] BNEF, Datacenters and decarbonization, 2021

[BNEF-5] BNEF, Decarbonizing steel: a net zero pathway, 2021 [BNEF-6] BNEF, Decarbonising steel: technologies and costs, 2021

[BNEF-7] BNEF, Decarbonizing aluminium: a net zero pathway, 2021

[BNEF-8] BNEF, Decarbonising aluminium: technologies and costs, 2021

[BRE-1] https://www.eea.europa.eu/data-and-maps

[BUN-1] https://www.clearingstelle-eeg-kwkg.de/sites/default/files/2022-07/0317-22.pdf, Article 96a paragraph 1

[CCW] https://www.concawe.eu/wp-content/uploads/Rpt_18-14.pdf

[CEM-1] https://cembureau.eu/media/kuxd32gi/cembureau-2050-roadmap_final-version_web.pdf

[CMX] CEMEX and Coolbrook electrify cement production process - CEMEX and Coolbrook electrify cement production process - CEMEX

[CO2-BE] Statistics | Eurostat (europa.eu)

[CO2-DE] 2022_03_15_trendtabellen_thg_nach_sektoren_v1.0.xlsx (live.com)

[CON-1] Potential uses of effect-based tools in conjunction with passive samplers (concawe.eu)

[DATA-1] Using location to reduce our computing carbon footprint (blog.google)

[DES-1] https://www.destatis.de/EN/Themes/_node.html

[EC-1] 2022 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2022%3A230%3AFIN&qid=1653033742483, REPowerEU Plan, European Commission, May

[EC-2] https://www.consilium.europa.eu/en/policies/green-deal/fit-for-55-the-eu-plan-for-agreen-transition/#what

[EC-3] https://ec.europa.eu/commission/presscorner/detail/en/statement_22_3164

[EEA-1] https://www.eea.europa.eu/data-and-maps

[ELI-1] https://issuu.com/eliagroup/docs/20211203_roadmap-to-net-zero_

[ELI-2] Public consultation on the methodology, the basis data and scenarios used for the study regarding the adequacy and flexibility needs of the Belgian power system for the period 2022-2032 and including also the scenario parameters for the “Low Carbon Tender” 2024-25, https://www.elia.be/-/media/project/elia/elia-site/public-consultations/2022/20221028_adequacy-and-flexibility-study-2024-2034-assumptionsand-methodology-main-doc.pdf

[ELI-3] Consultation on Federal Development Plan for the Belgian transmission system (110 kV to 380 kV) over the period 2024-2034, https://www.elia.be/ en/public-consultation/20221102_public-consultation-on-the-federaldevelopment-plan-2024-2034?csrt=672270280051951439

[ELI-4] CCMD (eliagroup.eu)

[ELI-5] https://issuu.com/eliagroup/docs/20220405_elia-white-papers-hybrid-interconnectors_?fr=sNmI5MzUyNzcyMTg

[EUM] full-report-8-56-17.pdf (eurometaux.eu)

[EUR-1] https://ec.europa.eu/eurostat/data/database

[F4F] F4F-in-short-FINAL.pdf (glass-international.com)

[FEB] https://perspective2050.energyville.be/

[GOL-1] Region: Neue Google-Cloud-Anlage in Berlin-Brandenburg - Golem.de

[HPA1] Port of Hamburg | Statistics (hafen-hamburg.de)

[HPA2] https://www.hamburg-port-authority.de/fileadmin/user_upload/Strassenverkehrsbericht2018.pdf

[HP-1] https://www.wbcsd.org/contentwbc/download/14846/211001/1en_1_?fr=sYzJlZTUyNzcyMT

[IND] PRESS RELEASE: Indaver is starting to build a ground-breaking recycling plant for plastics in the Port of Antwerp. [LEX-1] https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX%3A12008E122%3AEN%3AHTML

[MS-1] Microsoft Azure available from new cloud regions in Germany | Azure updates | Microsoft Azure [NBB-1] https://stat.nbb.be/Index.aspx?DataSetCode=QNA&lang=en

[NREL] Energy Implications of Glass-Container Recycling (nrel.gov)

[PAP] Electricity Generation from Low and Medium Temperature Industrial Excess Heat in the Kraft Pulp and Paper Industry (diva-portal.org)

[PBL-1] Decarbonisation options for the Dutch container and tableware glass industry (pbl.nl)

[REN-1] https://www.renewables.ninja

[SBA-1] 2021, Source: Bruttowertschöpfung nach ausgewählten Wirtschaftsbereichen in jeweiligen Preisen - Statistisches Bundesamt (destatis.de)

[SBA-2] 2021, Source: Erwerbstätige und Arbeitnehmer nach Wirtschaftsbereichen(Inlandskonzept) 1 000 Personen - Statistisches Bundesamt (destatis. de)

[STA-1] https://statbel.fgov.be/en/open-datal

[STT-1] https://www.statista.com/outlook/cmo/food/belgium#revenue

[UBA1] Fahrleistungen, Verkehrsleistung und “Modal Split” | Umweltbundesamt

[UBA2] Emissionsdaten | Umweltbundesamt

[VLA-1] https://www.vlaio.be/nl/publicaties/naar-een-koolstofcirculaire-en-co2-arme-vlaamseindustrie

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