In view of ambitious climate protection targets set both on the European level and national level in Germany, sector coupling will play a particularly important role with regards to future electricity consumption.
In order to achieve the goals set by the EC:
- at least part of the final energy demand must be switched from fossil energy sources such as gases and liquid fuels to electricity (direct use of electricity in the industrial, transport and heating sectors); and
- the remaining production of gases and liquid fuels must be created using renewable electricity or other CO2-neutral processes. - more specifically, the indirect use of electricity for the production of hydrogen and other derivatives (synthetic paraffin, methanol, petrol, etc.).
Possible drivers of future electricity consumption, especially in the industrial sector, include automation and digitalisation processes, as well as new energy-intensive industries such as data centres and battery factories.
Grid expansion must keep up the pace
Meeting these goals following the steps above will not be a problem, so long as the grid expansion keeps pace with these trends in electricity consumption. This presupposes a reliable electricity demand forecast that reveals impending grid bottlenecks at an early stage and a suitable grid development plan to address and remedy these bottlenecks. Consequently, developing realistic regionalised electricity consumption forecasts is vital.
Analysing regional electricity consumption
With that in mind, Frontier Economics and FICHTNER have been commissioned by VfEW, the Association for Energy and Water Management Baden-Württemberg e.V., to analyse regional electricity consumption trends with a focus on the industrial sector. Whilst working on this study, we contacted several industrial companies to get their views. The discussions we had revealed a number of interesting points, e.g:
- electrification measures are already being implemented or planned in some sectors;
- although a further electrification is technically possible in many industrial sectors, the future of different decarbonisation measures largely depends on what the single options cost, which in turn depends on the respective regulatory framework.
Our indicative scenario-based estimate shows that industrial electricity consumption in Baden-Württemberg may well increase by about 60 - 70 percent by 2045, provided that both market and regulatory framework conditions and the technical progress for the use of green electricity in the industry sector develop comparatively favourably in future.
Figure 1 Roughly estimated electricity consumption of the industrial sector in Baden-Württemberg for the years 2030 and 2045 in different scenarios
Source: Frontier Economics/FICHTNER
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