Electrification of buildings and industry in the United States: Drivers, barriers, prospects, and policy approaches

Publication Type

Report

Date Published

03/2018

LBNL Report Number

LBNL-2001133

Abstract

This study reviews the possible benefits and barriers to greater electrification in U.S. buildings and industry, the technical and economic potential for electrification, and policy and programmatic approaches for regions that may want to explore beneficial electrification.

In buildings, electrification primarily means replacing combustion fuels for space and water heating. For example, electric heat pumps are economically viable in a wide variety of buildings today. In industry, diverse processes and high levels of process integration make electrification solutions more complex.

The ultimate barriers to electrification are economic, not technical. Fuel prices and differences in the capital costs of equipment are the chief determinants of the relative economics of electric compared to non-electric technologies.

Among the promising energy system benefits from increased electrification are greater flexibility for managing loads, opportunities for customers to provide services that support grid operations, reduced air pollution, improved quality of some energy services in buildings, and better product quality in some industrial processes. At the same time, jurisdictions considering aggressive electrification policies will be interested in potential drawbacks along with possible solutions — for example, ratemaking approaches to address infrastructure costs.

Many policies, programs, and regulations affect the prospects for electrification. Emerging approaches that hold particular promise include charging lower prices for using electricity off-peak (time-varying rates) and compensating the grid services that newly-electrified end uses can offer (electricity market designs that reward flexibility).

The study includes both use cases and case studies of electrification in buildings and industry and suggests several areas for further research to better understand and advance beneficial electrification. 

Year of Publication

2018

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