Recent fossil fuel market shocks have made the case for renewable energy's resilience with a glaring clarity. Countries with higher domestic renewable power capacity have been less exposed to these shocks. Looking beyond power generation, there is also a good case for adopting renewable solutions to meet the energy demand of many industry sectors - both in longstanding sectors, and in emerging 21st century applications.
Traditional industry sectors like iron and steel, chemicals, and cement manufacture are all energy intensive. They are often described as hard-to-abate' sectors because the manufacturing processes currently usually rely on fossil fuels for the provision of chemical feedstocks and of fuel for high temperature heating.
Beyond decarbonisation, many industries are looking into other benefits of using more renewable energy, as they can offer myriad benefits to industries around the world, in the following ways:
- 1. Electrification
Thanks to technical innovations and the increasing cost-competitiveness of renewable power, it is increasingly feasible to directly electrify applications in many of these sectors. Electrification using renewables is especially competitive against the backdrop of volatile fossil fuel prices and market shocks.
For example, novel electric boilers and heat pumps are increasing the range of temperatures within which electric' heat can be produced for industrial applications. And depending on the operational parameters, heat pumps can be extremely efficient solutions. These developments mean that renewable-powered electrification of industrial processes is increasingly attractive.
The International Renewable Energy Agency (IRENA) estimates that around 34% of total final energy consumption in industry could be directly met by electricity by 2035, rising from 27% in 2023. Meeting this demand with domestically or regionally-generated renewable electricity would further reduce exposure to fossil fuel commodity markets.
- 2. As Green Fuels
Meanwhile, the use of renewable bioenergies (biofuels and biogases) and the adoption of green hydrogen and derived commodities offer other avenues for the adoption of renewable solutions in current and emerging industry sectors. Both bio- and hydrogen-derived gases and fuels can substitute fossil fuels in many processes, [NM1.1][JW1.2]including in providing chemical feedstocks.
If produced locally, renewable-based hydrogen can provide additional renewable-fuelled resilience in iron and steel value chains. The same applies for biogases used as energy carriers in chemical manufacture, for example.
- 3. Powering Digitalisation
Another key frontier in the next phase of energy transition discussions is the increasing use of artificial intelligence (AI). AI tools are expected to enhance the predictability, monitoring and control of energy systems with high shares of renewables, by aiding in forecasting weather and enhancing the responsiveness of flexible generation and demand.
Deploying these tools at scale will significantly increase the energy need of the required data centres. Data centres are energy intensive, and are already proving to be significant sources of energy demand. Many developers are struggling to secure reliable sources of power, or vital connections to power networks.
As such, data centre operators have an excellent opportunity to design their energy sourcing strategies to be sustainable right from the start, by adopting renewable electricity inputs by design. For example, they can supply their own renewable power by building renewable microgrids next to the facility, thus reducing reliance on fossil-fuelled power and the need for costly grid connections.
An interesting dynamic to watch in the coming years will be the competition between different energy-intensive industries to secure resilient energy supplies from renewables. Will data centres outcompete traditional industries? Or will there be sufficient renewable energy to go around?
This is largely a question of geography, and of the relative abundance of renewable energy sources. Regardless, one thing is certain: increasing renewable energy supply can unlock green industrialisation and industrial development in many countries, creating jobs, and holistically benefiting local economies.
Expert Insight by:
James Walker
Team Lead - Renewable Gases, IRENA
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