Bottom-Up Estimates of the Cost of Supplying High-Temperature Industrial Process Heat from Intermittent Renewable Electricity and Thermal Energy Storage in Australia

We report the upper and lower bounds for the levelized cost of high-temperature industrial process heat, supplied from electricity generated with solar-photovoltaic (PV) and wind turbines in combination with either thermal or electric battery storage using hourly typical meteorological year (TMY) data, in systems sized to supply between 80% and 100% of continuous thermal demand at a site in the northern part of Western Australia. The system is chosen to supply high-temperature air as the heat transfer media at temperatures of 1000 degrees C, which is a typical temperature for an alumina or a lime calcination plant. A simplified model of the electrical energy plant has been developed using performance characteristics of real PV and wind systems and TMY data of renewable energy resources. This was used to simulate a large sample of possible system configurations and find the optimal combination of the renewable resources and storage systems, sized to provide renewable shares (RES) of between 80% and 100% of the yearly demand. This allowed the upper and lower bounds to be determined for the cost of heat based on two scenarios in which the excess energy is either dumped (upper bound) or exported to the electricity grid (lower bound) at the average generating cost. The lower bound of the levelized cost of energy (LCOEL), which occurs for the system employing thermal storage, was estimated to range from USD 10/GJ to USD 24/GJ for RES from 80 to 100%. The corresponding upper bound (LCOEU), also estimated for the system using thermal storage, are between USD 16/GJ and USD 31/GJ, for RES between 80% and 100%. The utilization of electric battery storage instead of thermal storage was found to increase the LCOE values by a factor of two to four depending on the share of renewable energy. Compared with current Australian natural gas cost, none of the systems assessed configurations is economical without either a cost for CO2 emissions or a premium for low-carbon products. The estimated cost for CO2 emission that is needed to reach parity with current natural gas prices in Australia is also presented.